Co-Packaged Optics Market - By Component (Silicon Photonics Die, DSP Die, Optical Connector, Fiber Interface), By Application (Data Centre Switches, AI Cluster Interconnect, 5G Fronthaul, HPC), By Region

The global co-packaged optics market size was USD 1.84 Billion in 2025 and is expected to register a revenue CAGR of 17.5% during the forecast period. Co-packaged optics integrates optical transceiver silicon photonics dies and digital signal processor dies onto a common package substrate alongside network switch ASICs or AI accelerator compute dies, eliminating the copper electrical interface between switch chip and pluggable optical transceiver that becomes the primary bandwidth bottleneck at 400G and 800G port speeds. CPO packages silicon photonics modulator and photodetector arrays integrated with on-package edge-coupled or grating-coupled fiber connectors directly to the switch ASIC substrate, reducing the optical-electrical signal path from 15 to 25 centimetres for pluggable transceivers to 1 to 5 millimetres for co-packaged integration. Broadcom's co-packaged optics Ethernet switch announced in 2023, Intel's OCI co-packaged optics platform, and Marvell's CPO solutions for 400G and 800G switch ASICs represent the primary commercial CPO deployments. The IEEE 802.3 standards body completed the 800G Ethernet physical layer standard in 2023, which specified CPO as the primary electrical interface approach for 51.2 Tbps switch ASICs operating at above 100G per lane.

The co-packaged optics market is being driven by AI data centre east-west bandwidth scaling, where GPU clusters require switch interconnects at 400G to 800G per port that pluggable optical transceiver face-plate connections cannot sustain without thermal and signal integrity compromises at rack-scale deployment. Microsoft Azure, Google Cloud, and Meta have each disclosed AI cluster network architectures at 400G spine and leaf switching where CPO-enabled switch ASICs reduce power consumption by 20 to 30 percent per rack versus equivalent pluggable transceiver configurations. For instance, in April 2026, Broadcom Inc., USA, announced commercial customer deployments of its CPO-enabled Tomahawk 6 switch ASIC at 51.2 Tbps with on-package silicon photonics at three hyperscaler data centres, confirming the first production-volume CPO switch deployments at AI cluster scale and marking the transition of CPO from technology development to production deployment. These are some of the key factors driving revenue growth of the market.

However, co-packaged optics requires replacement of existing pluggable transceiver-based switch infrastructure with CPO-integrated switch systems, creating a capital expenditure replacement cycle that slows CPO revenue ramp relative to the technology's performance advantages. The serviceability challenge of CPO, where a fiber connector failure on a co-packaged port requires the entire switch unit replacement rather than a transceiver swap, creates operational risk in deployed networks that network operators are managing through redundancy design but have not fully resolved. These factors substantially limit co-packaged optics market growth over the forecast period.