The Co-Packaged Optics (CPO) sector has just hit a pivotal two-fold milestone. First, NVIDIA announced full-scale production of its Spectrum-X Ethernet silicon photonics switches, delivering on the promise of being the "world's first mass-produced CPO switch." Soon after, SK hynix highlighted that CPO is the key to scaling system-level HBM innovation, with next-generation AI infrastructure set to extend optical interconnects to memory interfaces. Within a week, CPO has vaulted from "concept" to "product" and then to "next-gen architecture blueprint." On the A-share front, names like ZJ INNOLIGHT, Eoptolink, and T&S Communications are drawing intense heat, while the high-optical ChiNext AI ETF (159363) continues to see surging attention. These two landmark events have pushed CPO from a "future narrative" to the "industry frontline." This article breaks down the investment opportunities across the CPO supply chain.
Where to begin: A five-tier opportunity framework
Tier One: NVIDIA's supply chain partners — the highest certainty
This tier likely offers the most certain opportunities, representing the only segment with visible mass-production orders today. As NVIDIA transforms CPO switches from blueprints to products, the supply chain division of labor is already clear. T&S Communications has been named a CPO optical component supplier by NVIDIA, making it the strongest earnings pillar in the entire chain and the highest-certainty link in the current CPO landscape.
Tier Two: Optical module/optical engine leaders — the battleground for identity shifts
Optical module makers like ZJ INNOLIGHT and Eoptolink still generate the bulk of their revenue from 800G/1.6T pluggable modules, but their real frontier lies in the "identity shift" of the CPO era—transitioning from selling modules to supplying optical engines and system-level packaging solutions. ZJ INNOLIGHT, the global optical module leader, has already shipped 6T modules at scale (with a rising silicon photonics mix), possesses 3.2T R&D capabilities, and is making forward-looking moves into next-gen optical interconnect technologies like NPO, CPO, and OCS. Eoptolink, a core global high-speed module player, counts 6T and 800G as its primary delivery products, with silicon photonics now a mainstream solution, and maintains technical reserves and product layouts across CPO, NPO, OCS, and XPO frontier technologies.
Tier Three: Optical chips and materials — the highest technical density
CPO drives a surge in demand for high-speed lasers (such as high-power CW lasers), and the substrates for premium optical chips are almost inseparable from Indium Phosphide (InP). This is the segment with the highest technical density and the most fragile supply chain. CW lasers are the core of CPO's external light sources, and China's domestic IDM leader in high-speed laser chips is poised to become a "sole source" in the CPO light source supply chain. Furthermore, China controls 70% of global refined indium production, and with export controls in place, the supply-demand tightness in this link could become a long-term theme.
Tier Four: Optical components and connectors — tangible incremental growth
CPO's placement of optical engines right next to chips creates a tangible boost in demand for high-density fiber connections and precision passive components. T&S Communications' MPO/MTP connectors and FAU fiber array units are essential for high-density data center interconnects and CPO optical engine coupling, and the company is a major supplier of premium MPO to Corning, indirectly tapping into NVIDIA's CPO supply chain. Guangku Technology, a fiber laser component and optical communication device maker, is China's volume leader in thin-film lithium niobate modulators and is laying out CPO application components like WDM modules and FAU fiber arrays.
Tier Five: Equipment, packaging, and domestic switches — narrative and expectations
Domestic players are largely in the technical tracking and solution pre-research phase. CPO switches demand entirely new capabilities in silicon photonics chips, light source packaging, and thermal management, and supply chain maturation plus process breakthroughs will take time, with mass-scale ramp-up expected around 2027-2028. Ruijie Networks, a domestic network equipment leader (top three in Ethernet switches in China), has already unveiled a 2T CPO switch commercial solution, developed self-researched LPO optical modules, and anticipates CPO volume growth once processes mature in 2027-2028.
Why the dual-line growth channel matters
With CPO-led optical interconnect technology officially entering commercial deployment, 2026 marks a critical inflection point for the industry—traditional pluggable optical modules are still ramping, while new tech products like CPO are simultaneously landing in production. This dual-line growth channel is set to amplify the value of optical interconnect within AI computing clusters, making the high-optical theme one to watch closely.
For those seeking a vehicle to play this trend, the ChiNext AI ETF (159363) focuses on optical module and CPO leaders while also covering AI applications. The underlying index holds nearly 40% combined weight in ZJ INNOLIGHT, Eoptolink, and T&S Communications, positioning it as a core flag-bearer for AI compute. It has averaged over 1.1 billion yuan in daily turnover this year, offering strong liquidity. Off-exchange feeder funds are available: Class A (023407) and Class C (023408).
Data as of July 31, 2026, shows the ChiNext AI index's top component weights as: ZJ INNOLIGHT (14.06%), Eoptolink (13.77%), T&S Communications (7.38%), Guangku Technology (1.85%), T&S Communications (1.26%), and Ruijie Networks (1.13%).
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