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Co-Packaged Optics Markets 2022-2029

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  • 61 Pages
  • February 2022
  • Region: Global
  • CIR
  • ID: 5261766

Co-Packaged Optics Market Will Reach Almost $2.3 Billion by the End of the Decade

Co-Packaged Optics Revenues to Reach $5.4 Billion by 2027

The report focuses on the demand for CPO within data centers and says that CPO deployment will be largely driven by switching evolution, which will reach speeds of 102.4 Tbps in 2025.  Once switching reaches this level, pluggable transceivers will fade away. CPO promises to reduce the power consumption by 30 percent and the cost-per-bit by 40 percent compared to using pluggable optics.

About the Report

In 2021, the analyst produced a widely read report pointing out the advantages, disadvantages, and future applications for CPO. Much has changed since then as in 2022 optoelectronics firms have settled down to producing real-world products including a new early-stage and now available version of CPO (called NPO).  Meanwhile, the OIF has taken on the role of providing a framework for future CPO products.

This report brings the CPO story up to date and points out the growing opportunities in how CPO will be used in four kinds of data centers:  Hyperscale, Enterprise, Telephone Company, and Edge. In addition to the CPO modules themselves, this report examines the latest developments in lasers and cooling systems for CPO as well as analyzing the competition between CPO and next-generation pluggable transceivers.

The report forecasts CPO modules from 2022 to 2030 with breakouts by type of data center and location (inter-building/inter-machine or rack/server) in the data center.  Forecasts are provided both in terms of volume shipments and revenues.  These forecasts are based on an analysis of the user adoption patterns for high-speed interfaces in data centers.

In addition, this report has a strong emphasis on CPO’s impact on the optoelectronic supply chain in the wake of both technological change and geopolitical developments. Key companies discussed include AMD, Anritsu, Ayar Labs, Broadcom, Furukawa Electric, GlobalFoundries, IBM, Marvell, Lumentum, Ranovus, SENKO, TE Connectivity, Xlinx and others.

From the Report

  • CPO-based gear will initially be used in hyperscale data centers, which will account for 80 percent of CPO revenues in 2023. Hyperscalers have been driving the CPO “movement” for some years.  However, the analyst expects CPO to move into other kinds of data centers in a year or so.
  • The ultimate driver for CPO in the data center can be found in new kinds of high data-rate traffic with exceptionally low-latency requirements. This new data center traffic - notably AI and machine learning (ML) - will be the main CPO market drivers. Other kinds of traffic that will help increase demand for CPO are augmented reality (AR) and virtual reality (VR)
  • The emergence of Near-packaged optics (NPO), which has many of the advantages of CPO but is simpler to implement. NPO means that data equipment vendors and HPC firms can shift to 800G now without getting bogged down in the complexities of CPO. NPO is now an effective on-ramp for CPO and presents a viable alternative to pluggables that previously did not exist.

Who should read this report?

Whether you are an optical component manufacturer, optical equipment manufacturer, large end-user, or investor, you will gain valuable insights from this in-depth research.

Table of Contents

Chapter One: CPO in the Latency-Sensitive Data Center
1.1 Background to this report
1.1.1 The evolution of CPO in 2021 and early 2022
1.1.2 CPO and the changing nature of data centre traffic
1.1.3 Five-year forecast summary of CPO products
1.2 Objectives and scope of this report
1.3 Methodology of this report
Chapter Two: Recent Advances in CPO Products and Standards
2.1 CPO product and standards trends
2.2 The OIF Co-Packaging Framework
2.2.1 External Laser Small Form Factor Pluggable: New opportunities for the optical module industry
2.2.2 Rethinking connectors
2.2.3 Cooling options for CPO products
2.2.4 3.2T CPO modules of the future
2.3 The role of COBO: Looking for something to do?
2.4 New CPO architectures
2.5 CPO and switch design
2.6 The CPO industry
2.6.1 Emerging companies and products in 2021-2022
2.6.2 How CPO is changing the optoelectronics supply chain
2.7 Key points from this chapter
Chapter Three: Impact of Latency-Sensitive Traffic on Demand for CPO
3.1 New types of traffic as a driver for CPO
3.2 Videoconferencing and online events: CPO and emerging requirements
3.3 AI and Machine Learning in the data centre: Everyone’s favourite CPO market driver
3.4 IoT and IIoT
3.5 5G, CPO and the impact on the data centre
3.6 Key points from this chapter
Chapter Four Rebuilding the Data Center with CPO: Five-year Forecasts for CPO
4.1 From 400G to 800G and beyond
4.2 Continuing decline in the number of data centres
4.3 The future of hyperscale data centres
4.4 CPO in interbuilding links
4.4.1 Five-year deployment forecast
4.5 CPO in intermachine links
4.5.1 Five-year deployment forecast
4.6 The future of rack-based CPO
4.6.1 From TOR to MOR
4.6.2 Five-year deployment forecast
4.7 Alternatives to CPO: Next-generation pluggables
4.7.1 At what data rate will CPO become the only practical solution?
4.8 Major end-users in the data Center will shape CPO
4.8.1 Is CPO only a solution for the biggest datacom users
4.9 The impact of generational change
4.10 Key points from this chapter



Executive Summary

In 2020 this publisher became the first analysis firm to release a co-packaged optics (CPO) market report that surveyed the opportunities flowing from the development and deployment of co-packaged optics. In this new co-packaged optics market report, they bring the story up to date and focus on advances for CPO in the data centre. In the first main chapter, the report focuses on the role of the standards and IAs, especially the latest version of the OIF’s CPO Framework. In the publisher's view, the work recently presented by the OIF will lead to new product directions for laser, transceiver, and switch modules, as well as connectors.

While in the past, the drive towards high speeds in the data centre has been caused by the growing ubiquity, the data networking now believes that in the future even higher latency traffic, especially AI and machine language (ML) traffic will predominate. These and other newer kinds of traffic are now being cited as what is motivating CPO R&D. The final chapter of this report predicts how large data centres will be rearchitected with CPO to meet current demands. This chapter also includes multi-year forecasts in revenue and volume terms of CPO products for the data centre.

Along the way, this report discusses such matters as how well CPO will compete with the new breed of 800G pluggable and how far it will be able to penetrate the data centre market. In addition, the report looks at how the CPO industry sector is evolving, which companies are rising to prominence and how the optical components supply chain is coping with the new challenge of an integrated optoelectronic product.

Companies Mentioned

  • AMD
  • Anritsu
  • Ayar Labs
  • Broadcom
  • Furukawa Electric
  • GlobalFoundries
  • IBM
  • Lumentum
  • Marvell
  • Ranovus
  • TE Connectivity
  • Xlinx