Development Trend of Optical Transceivers - Co-Packaged Optics (CPO)

Development Background of CPO

Driven by the development of artificial intelligence, big data, and cloud computing applications, the scale of data centers continues to expand, resulting in a significant increase in the demand for bandwidth capacity and high-speed data transmission rates.

Frequent and massive data exchanges between different servers often face limitations in overall task performance due to bandwidth constraints, making it crucial for data centers to adopt ultra-high-bandwidth silicon photonics-based data interconnects.

At the same time, current silicon photonics technology is undergoing important technological innovations. Moore’s Law is slowing down, and chip manufacturing technology is approaching physical limits. From a system perspective, performance optimization and rate improvement become essential paths to follow.

Co-Packaged Optics (CPO) is widely recognized as the future form of high-speed products and one of the optimal solutions to address the thermal and power consumption challenges of high-speed optoelectronics. It is expected to become a primary focus of industrial competition.

In the future, CPO will become the enabling technology for cloud providers’ data centers. Initially, it will be applied in hyperscale data centers, followed by the demand for low latency and high-speed applications. Artificial intelligence, machine learning, and other fields are expected to be the main driving factors.

The demand for network speeds in artificial intelligence is currently more than ten times higher. In this context, CPO is expected to reduce the power consumption of existing pluggable optical module architectures by 50%. Its competitive advantage will be even more pronounced in artificial intelligence and high-performance computing scenarios.

Overview of Co-Packaged Optics (CPO) Industry

Co-Packaged Optics (CPO) is an innovative high-density optical component technology that offers low power consumption and high bandwidth capabilities.
In simple terms, CPO involves bringing the optical transceiver closer to the switching chip, reducing the wiring distance between the chip and the module, and gradually replacing pluggable optical transceivers. Eventually, the optical engine and the electrical switching chip are integrated into a single chip.

CPO has the potential to replace traditional front-panel pluggable optical modules by tightly packaging silicon photonics transceivers with large-scale CMOS chips. This advancement enhances the optical interconnect technology in terms of cost, power consumption, and size, further improving its application in data center environments.

Co-Packaged Optics (CPO) primarily involves three core technological challenges: high-density optoelectronic (driver) chip design, high-density and high-bandwidth connector technology, and packaging and thermal management. Currently, there are two mainstream CPO technology solutions and application scenarios:

● Multi-mode solution based on VCSEL: This solution is suitable for distances of 30m and below, primarily targeting short-range optical interconnects in supercomputers and AI clusters.

● Single-mode solution based on silicon photonics integration: This solution is suitable for distances of 2 kilometers and below, primarily targeting internal optical interconnects in large-scale data centers. As data centers demand significantly increased bandwidth density and single-channel speeds exceeding 100Gbps, traditional pluggable optical transceivers and on-board optical devices will struggle to match the cost-effectiveness of CPO technology.

According to LightCounting's predictions, the shipment volume of Co-Packaged Optics (CPO) is expected to increase from 50,000 units in 2023 to 4.5 million units in 2027, with a focus on 800G and 1.6T CPO transceivers. LightCounting's latest forecasts for optical transceivers, AOCs, EOMs, and CPOs indicate that the market share of siP (silicon photonics) products has been steadily growing since 2016, with accelerated growth since 2018. It took siP products over a decade to achieve a 25% market share, and it is projected to surpass 50% by 2026. This includes the adoption of Co-Packaged Optics (CPO) technology, which is expected to reach a market size of $800 million in the next five years.

Advantages of CPO Technology

Co-Packaged Optics (CPO) is a promising trend in the development of optical transceivers, offering several technical advantages:

High Integration

CPO technology enables the direct integration of optical components into chip packaging, achieving a tight coupling between optical and electronic elements. This highly integrated design significantly reduces the length of optical connections, minimizing signal loss and latency while improving system performance.

Low Power Consumption

By integrating optical components with chip packaging, CPO technology achieves shorter electrical and optical connection distances, resulting in reduced power consumption. Additionally, CPO can employ more efficient optoelectronic transceivers and modulators, further lowering power consumption.

High Transmission Rates

CPO technology enables higher transmission rates to meet the growing demand for high bandwidth in data centers. By integrating optical components with chip packaging, it provides shorter signal paths and higher signal transmission rates.

Smaller Form Factor

CPO technology combines optical components with chip packaging, resulting in smaller-sized optical modules. This is crucial for high-density data centers and compact devices as it saves valuable space resources.

Cost-Effectiveness

While CPO technology may face some cost challenges in the initial stages, it is expected to become more cost-effective as the technology matures. Compared to traditional optical transceivers, CPO technology reduces the number and complexity of optical connections, leading to lower manufacturing and maintenance costs.

Technologies Required for Implementing CPO

Co-Packaged Optics (CPO) implementation requires the following technologies:

Optical Device Design

The core of CPO technology lies in directly packaging optical devices within the chip. Therefore, it requires the design of optical devices with high optical performance and reliability. Optical device design involves considerations such as optical performance, material selection, and fabrication processes.

Chip Fabrication Technology

Packaging optical devices within the chip necessitates the fabrication of highly precise and stable chips. Chip fabrication technology needs to address issues such as device-chip compatibility, optical paths, and coupling efficiency.

Packaging Process Technology

CPO technology requires the packaging of optical and electronic devices within the same chip. Therefore, advanced packaging process technology is needed, taking into account device reliability, size compatibility, and temperature adaptability.

Nanofabrication Technology

CPO technology aims to achieve high-density optoelectronic integration, which requires the utilization of nanofabrication technology. Nanofabrication technology enables the precise fabrication and packaging of devices.

System Integration Technology

CPO technology involves integrating multiple optical and electronic devices within the same chip. Therefore, system integration technology is necessary, considering factors such as device compatibility, signal transmission, and control.

By incorporating these technologies, CPO can achieve the desired level of integration, performance, and reliability for advanced optical transceivers.

Market Landscape and Key Players in CPO

CPO technology, recognized as the future form of high-speed optical products, is expected to bring about a transformation in the competitive landscape of optical transceivers as it matures and becomes commercialized.

Several global companies with diverse backgrounds have already begun their research and development efforts in this field.

Currently, cloud computing giants such as AWS, Microsoft, Meta, and Google, as well as network equipment leaders like Cisco, Broadcom, Marvell, IBM, Intel, NVIDIA, AMD, TSMC, Grace Semiconductor, and Ranovus, are proactively investing in CPO-related technologies and products while driving standardization efforts for CPO.

Cloud service providers Facebook and Microsoft have established the CPO Alliance, aiming to create a platform that attracts leading companies from various industries to join the alliance and promote the establishment of CPO standards and the development of products. Equipment manufacturers like Cisco and Juniper are planning to release 51.2T/s CPO switches in the future, while chip manufacturers Intel and Broadcom are developing CPO switches based on their respective switch chip offerings.

According to projections from companies like Intel and Broadcom, CPO technology is expected to be practically applied between 2023 and 2025, with corresponding chip products gradually entering the market.

Development Trends of CPO Technology

In general, the demand trends for data center optical transceivers are towards smaller form factors, higher transmission speeds, and lower costs. Currently,100G optical transceivers have been widely adopted in data centers. 400G optical transceivers have been commercially used for several years in some countries, and countries that recently entered the data center market are gradually introducing them. 800G optical transceivers are in the early stages of commercialization. As a leading provider of high-speed data transmission solutions, NADDOD offers 100G, 400G, and 800G optical transceivers.

CPO technology provides a new option for large-scale data center operators beyond pluggable transceivers. In the future, silicon photonics technology evolution will focus on higher integration. Advanced silicon photonics manufacturing processes and packaging technologies will be the core technical support for the evolution of silicon photonics technology.