Gf Securities Co.,Ltd. released a research report stating that CPO, as the next-generation technology for optical modules, is seeing its industry trend further strengthened as AI server interconnections demand increasingly higher data transmission efficiency. Leading global manufacturers are actively exploring related technological pathways and applications. The firm recommends focusing on companies involved in key CPO processes such as packaging and testing. The main views of Gf Securities are as follows:
CPO represents the next-generation interconnect architecture for optical communication. Currently, data transmission between server racks primarily relies on optical modules for electro-optical signal conversion, while copper cables are used for signal transmission within racks. However, as efficiency requirements intensify, electrical signal transmission faces limitations in signal integrity and power consumption. This necessitates new interconnect architectures for more efficient connections. Co-packaged optics (CPO) integrates the optical engine directly with switch chips and XPUs on the same substrate or interposer, reducing the electrical signal transmission path from centimeters to millimeters. This significantly lowers signal attenuation, power consumption, and latency. As the technology matures, CPO is expected to gradually replace pluggable optical modules as the next-generation technology in optical communication.
Multiple leading overseas manufacturers are actively investing in CPO R&D, bringing commercialization closer. Although CPO technology is still in its early commercial stages, leading overseas companies such as NVIDIA, Broadcom, and Marvell have developed proprietary solutions in the CPO switch arena. According to SemiAnalysis, NVIDIA has launched CPO switches centered around its Spectrum-X and Quantum-X series to meet diverse customer needs. Broadcom's CPO switch, after two iterations, plans to release the Davisson series. Marvell has also established a full-stack CPO technology system, recently launching the TX9190 CPO switch.
CPO manufacturing involves coordination across "light source, FAB, and packaging" processes. Citing the paper "Silicon photonics CPO testing technology challenges," using NVIDIA's Quantum-X Photonic Switch as an example, CPO manufacturing involves both front-end processes like etching and thin-film deposition, and back-end processes such as bonding and dicing. The process is relatively complex and requires collaboration among FAB, optical assembly, and packaging entities.
Photoelectric testing is a major challenge in the CPO process. Due to the numerous wafer-level processing and packaging steps involved in CPO preparation, the optical/electrical testing requirements for the CPO process flow are more demanding. According to a post on ficonTEC's official LinkedIn, the company announced in March 2025 the launch of equipment co-developed with Teradyne and Femtum. This equipment combines wafer-level dual-side "photoelectric" testing, laser cleaning, and laser repair into a single unit. Such integrated testing equipment is expected to become mainstream in the future.
Risk factors include slower-than-expected CPO technology iteration, lower-than-anticipated global AI infrastructure investment, and worsening competitive dynamics.
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