“We expect this rapid growth to moderate in 2026-2027 as the first wave of excitement about AI subsides,” LightCounting said. “Using LPO and CPO in scale-up networks will return this market to double-digit growth in 2028-2030.”
The Nvidia factor
A significant factor in optical transceiver sales in 2023-2024 was growth in Nvidia’s business.
New designs of Nvidia’s AI clusters require a lot of transceivers.
This points to Nvidia’s shift from copper to optical pluggable transceivers. Before 2023, Nvidia’s AI cluster systems used only copper and active optical cables (AOCs).
Last March, Nvidia unveiled NVIDIA Quantum-X800 InfiniBand and NVIDIA Spectrum™-X800 Ethernet, which offer 800 Gbps throughput.
Rise of pluggables
NDR (400G) InfiniBand connections use pluggable 400/800G SR4/SR8 and DR4/DR8 transceivers instead of AOCs. Also, the latest XDR systems will use 1.6T DR8 and 2xFR4 pluggables, including some LPOs.
Nvidia is also developing CPO, which it will use to scale NVLink connectivity over fiber.
LightCounting expects “LPO and CPO to be deployed in scale-up networks starting in 2026-2027 and reaching high volumes by 2028.”
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