Co-Packaged Optics

Co-packaged optics, or CPO, moves the optics from a pluggable module on the front panel to a spot right beside the switch chip. Shortening the electrical path cuts the power needed to move each bit by roughly 30 to 40%, which is why hyperscalers see it as the next step for AI data-center networking.

What is co-packaged optics?

In today’s switches, electrical signals travel several inches from the chip to optical modules on the front panel, and at high speeds that distance wastes power and corrupts the signal. CPO closes the gap by integrating the optics into the same package as the switch silicon, so light leaves the chip almost immediately instead of fighting its way across a circuit board. Less electrical distance means less energy spent per bit and a cleaner signal, which lets each switch port carry more traffic.

The payoff shows up in shipping products. Broadcom’s first Tomahawk CPO switch (Tomahawk 5 Bailly) reported more than 30% system-level power savings versus pluggable modules, and its 102.4 Tbps Tomahawk 6 Davisson claims a 70% cut in optical interconnect power (Broadcom). NVIDIA frames the same shift as a requirement for the next scale of AI, not a nicety:

AI factories are a new class of data centers with extreme scale, and networking infrastructure must be reinvented to keep pace.

— Jensen Huang, NVIDIA, Spectrum-X Photonics announcement

NVIDIA’s silicon-photonics switches put numbers on that reinvention: by integrating the optics, they use 4 times fewer lasers and deliver 3.5 times better power efficiency and 63 times greater signal integrity than pluggable designs (NVIDIA). The market is small but set to grow fast as large-scale deployments arrive around 2028 to 2030. Analyst firm Yole Group projects CPO-driven demand climbing toward roughly $5 billion by 2031 from close to a standing start today (optics.org, on Yole Group).

How is co-packaged optics used in AI data centers?

CPO is the leading candidate for scaling network speed past the limits of pluggable optics, and it builds on silicon photonics. An AI training cluster is only as fast as the links between its accelerators, and at the densities hyperscalers are now building, the network can burn as much power as the compute. CPO attacks that bottleneck directly by cutting the energy each connection draws. For the Optical Networking & Photonics suppliers, leadership in CPO is a key battleground for the next generation of AI interconnects, which is why Broadcom and NVIDIA both rushed first-generation parts to market within months of each other.

Related terms & concepts

FAQ

Why is co-packaged optics important for AI?

As switch speeds rise, the power spent shuttling data between the chip and front-panel optics becomes a wall. CPO shortens that path and cuts interconnect power sharply: early production switches such as Broadcom's Tomahawk 5 Bailly report more than 30% system-level power savings versus pluggables, which is why hyperscalers see CPO as the next step for AI networking.

How is CPO different from pluggable transceivers?

Pluggable transceivers sit in modules on the front panel and can be swapped easily; CPO integrates the optics next to the switch silicon for lower power, at the cost of less field serviceability. Both will coexist for years.

How big is the co-packaged optics market?

It is small today but expected to grow fast as large-scale deployments arrive around 2028-2030. Analyst Yole Group projects CPO-driven demand climbing toward roughly $5 billion by 2031 from close to a standing start, tracking the build-out of AI scale-up networks.

Sources & references

  1. Broadcom Announces Tomahawk 6 - Davisson, the Industry's First 102.4-Tbps Ethernet Switch with Co-Packaged Optics · Broadcom, 2025-10-08
  2. NVIDIA Announces Spectrum-X Photonics, Co-Packaged Optics Networking Switches to Scale AI Factories to Millions of GPUs · NVIDIA, 2025-03-18
  3. Photonics packaging market to triple in value by 2031 (Yole Group CPO forecast) · optics.org (SPIE), 2026-04-01
  4. AI creates a new wave in demand for optical transceivers and accelerates LPO/CPO adoption · LightCounting, 2025-01-15