Co-packaged optics modules to be $5.5B market by 2027, says CIR

May 13, 2024
The research firm’s report updates its market forecasts for co-packaged optics modules.

Bolstered by the new OIF Implementation Agreement (IA), co-packaged optics now have a much more straightforward adoption path within data centers. Additionally, this new interface standard explicitly created for the age of latency-sensitive traffic, such as that made by the burgeoning AI trend, provides an additional and crucial enabling factor.

In its latest co-packaged optics modules report, CIR forecasts that the market will reach $5.5 billion in 2027, including near-packaged optics (NPO) products. 

“CIR sees tremendous potential for co-packaged optics that can begin to be realized in the next two years,” said CIR’s President and the report’s author, Lawrence Gasman. “CPO provides a pathway to 1.6T and beyond.”

A big consumer of CPO will be data centers.

CIR predicts that data centers will generate over $19 billion in aggregate spending on CPO over the 2023-2028 period. The research firm said there will be significant deployment of CPO in the access network, reaching $323 million in access deployments in 2027.

Further, CIR noted that the emerging approach that combines CPO with chiplets represents an “inflection point in the evolution of optical integration.” While this type of optical integration does not yet have a name, CIR said it differs from the approach based on novel materials.

Initially, CPO was seen as a way to protect US firms from Chinese transceiver competitors. CIR noted that the Chinese players have set up a CPO development organization to place CPOs deep in the network. Also, the research firm’s review of technical papers suggests that some of the more prominent Chinese transceiver companies have advanced plans to offer CPO products.

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