Co-Packaged Optics Market by Type (CPO, NPO), Data Rates (less than 1.6 T & 1.6 T, 3.2 T, 6.4 T), Application (Data Center and High-performance Computing, and Telecommunication and Networking), Packaging Technology and Region - Global Forecast to 2028
[160 Pages Report] According to MarketsandMarkets, the co-packaged optics market is projected to grow from USD 15 million in 2023 to USD 49 million by 2028, registering a CAGR of 26.5% during the forecast period. Penetration of IoT and connected devices in education and healthcare sectors, growing investment by tech giants to develop data centers, and introduction of ultra-high-definition video streaming are expected to propel the co-packaged optics market in the next five years. However, increased network complexity is likely to pose challenges for industry players.
The objective of the report is to define, describe, and forecast the co-packaged optics market based on type, data rates, application, and region.
Co-Packaged Optics Market Forecast to 2028
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Co-packaged optics market Dynamics
Driver: Growing investment by tech giants to develop data centers
The co-packaged optics market is being driven by the growth of mega data centers, which require high-speed, reliable connections between the different components of the data center. CPO provides a more efficient and cost-effective way to connect the components of mega data centers, making it an ideal solution for meeting this demand. As the number of mega data centers continues to increase, the demand for CPO is also expected to grow, driving the growth of the CPO market in the coming years.
Tech giants such as Amazon Web Services (US), Google (US), and Microsoft (US) are investing heavily in new data center facilities. In October 2022, Google (US) announced plans to open its first data center in Japan in 2023 as part of a USD 730 million investment that includes the Topaz Subsea Cable, a fiber cable connecting Japan and Canada. Active investments in the development of new data center facilities are expected to drive the growth of the co-packaged optics (CPO) market over the forecast period. Thus, the increasing infrastructure and technology development in the data center industry is driving the co-packaged optics market.
Restraint: Complicated design and fabrication process
Co-packaged optics are optical components that are integrated with electronic components such as processors and memory. They come with the challenge of having different requirements in terms of temperature, power, and packaging for electronic and optical components. Fabrication of co-packaged optics is a complex and expensive process, as it requires precise alignment and interconnection of optical and electronic components. It also demands the use of specialized equipment and materials. Due to its complicated design and fabrication process, co-packaged optics are more expensive than traditional optical transceivers, leading to limited adoption in some applications.
Opportunities: Rising deployment of 5G network
Co-packaged optics is a promising new technology that can improve the performance of 5G networks. It can enhance the performance of fronthaul links that connect the baseband unit (BBU) to the radio unit (RU) in 5G networks. CPO can also help to improve the performance of backhaul links that connect the RUs to the core network in 5G networks. These links are short, but they require high bandwidth to support the high data rates of 5G.
Overall, co-packaged optics is a promising new technology that has the potential to improve the efficiency and cost-effectiveness of 5G networks. By reducing power consumption and increasing bandwidth density, CPO can help make 5G networks more efficient.
Challenges: Increasing fiber counts per switc
Co-packaged optics switches combine optical and electronic components on a single chip, providing higher bandwidth and lower latency than traditional optical transceivers. However, such switches increase the fiber count per unit as they have more optical ports. This makes it challenging to route all fibers compactly and efficiently. To meet the demand for higher capacity switches, CPO switch ASICs can use parallel optical engines, allowing for up to 1024 fibers (four times as many as in existing solutions). However, this requires more front panel area than a 1RU switch can accommodate if MPO-16 is used at the front plate. Additionally, an external laser source (ELS) may be required, making the face plate space requirements even more complicated.
Market Map/Ecosystem
Co-packaged optics Market: Key Trends
The prominent players in the co-packaged optics market are Broadcom (US), Molex (US), Marvell (US), RANOVUS (Canada), Ragile Networks Inc. (US), SENKO (US), Quanta Computer Inc. (Taiwan), Furukawa Electric Co., Ltd. (Japan), among others. These companies boast mixing trends with a comprehensive product portfolio and strong geographic footprint.
CP0 is expected to grow at the highest CARG in the co-packaged optics market during the forecast period.
The CPO is expected to account for a significant share and grow at the highest CAGR during the forecast period. The demand for CPOs is expected to drive market growth as organizations look for ways to improve their network performance. Additionally, the increasing deployment of mega data centers is a key driver in the co-packaged optics market, as these data centers require reliable high-speed connections to transmit data between different types of equipment. The widespread use of cloud services has raised the demand for data centers, which has further fueled the industry under study.
Less than 1.6 T & 1.6 Tis expected to grow at the highest CARG in the co-packaged optics market in 2023.
The less than 1.6 T & 1.6 T segment is expected to account for a significant share during the forecast period. The demand for less than 1.6 T data rates co-packaged optics (CPO) is expected to remain strong in the coming years. This is due to the fact that many applications, such as data centers, telecommunications, and industrial automation, will have high demand. The increasing activities by market players such as MACOM and Intel Corporation are driving the growth of this 1.6 T data range.
The co-packaged optics market is expected to grow at the highest CAGR in India from the Asia Pacific region during the forecast period.
The Asia Pacific region continues to be a significant market for co-packaged opticss. The Asia Pacific region has witnessed significant growth in data center infrastructure due to the rising demand for cloud computing, digital services, and e-commerce. With the deployment of 5G networks in the Asia- Pacific countries, high-speed, low-latency communication links are essential. In India, the data center industry is rapidly expanding as more than half a million digital users generate and consume increasing amounts of data, with a growing preference for cloud services. India is now becoming a prime global destination for data center construction as India has become a fast-growing DC hub pursuant to a massive and growing internet user base, explosion of data, and establishment of a favorable environment through the government's Digital India initiative. Moreover, the Indian government's growing support for the data center and telecommunication industry is creating new opportunities.
Co-Packaged Optics Market by Region
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Key market players
Major vendors in the co-packaged optics companies include Broadcom (US), Molex (US), Marvell (US), RANOVUS (Canada), Ragile Networks Inc. (US), SENKO (US), Quanta Computer Inc. (Taiwan), Furukawa Electric Co., Ltd. (Japan), among others.
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Report Metric |
Details |
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Market Size Available for Years |
2022–2028 |
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Base Year |
2022 |
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Forecast Period |
2023–2028 |
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Units |
Value (USD Million/USD Billion) |
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Segments Covered |
Type, Data Rates, Application, and Region |
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Regions Covered |
North America, Europe, Asia Pacific, and RoW |
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Companies Covered |
Broadcom (US), Molex (US), Marvell (US), |
Co-Packaged Optics Market Highlights
This report categorizes the co-packaged optics market based on type, data rates, application, and region.
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Segment |
Subsegment |
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By Type |
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By Data Rates |
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By Application |
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By Region |
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Recent developments
- In March 2023, Furukawa Electric Co., Ltd. developed an 8-channel TOSA (transmitter optical sub-assembly) employing a blind mate optical connector at OFC2023, one of the largest international conferences in the optical communication market.
- In July 2023, SENKO acquired CudoForm Inc. (US), one of the leading companies in designing and manufacturing high-precision metal micro-optic components.
- In March 2023, Broadcom Inc. (US) has demonstrated its new chip, Tomahawk 5 51.2Tbps Switch Chip with eight 64-channel silicon photonic engines onboard. This new chip can power 800Gbps of traffic at 5.5W by reducing the need to electrically drive signals to pluggable optics at the front of the switch.
Frequently asked questions :
Which are the major companies in the co-packaged optics market? What are their primary strategies to strengthen their market presence?
Broadcom (US), Molex (US), Marvell (US), RANOVUS (Canada), Ragile Networks Inc. (US), SENKO (US), are among the leading players in the market. These companies have adopted organic and inorganic growth strategies such as product launches, partnerships and acquisitions, to gain a competitive advantage in the market.
What is the potential market for the application?
Data center & high-performance computing (HPC) are applications with high growth opportunities owing to advancements in technology.
What are the opportunities for new market entrants?
Factors such as penetration of IoT and connected devices in education and healthcare sectors and rising deployment of 5G network are creating opportunities for the players in the market.
Which offering is expected to drive market growth in the next six years?
CPO is expected to remain the major type driving co-packaged optics demand.
What are the major strategies adopted by co-packaged optics companies?
The co-packaged optics companies have adopted product launches, acquisitions, expansions, and contracts to strengthen their position in the co-packaged optics market.
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The research process for this study included systematic gathering, recording, and analysis of data about customers and companies operating in the co-packaged optics market. This process involved the extensive use of secondary sources, directories, and databases (Factiva, Oanda, and OneSource) for identifying and collecting valuable information for the comprehensive, technical, market-oriented, and commercial study of the co-packaged optics market. In-depth interviews were conducted with primary respondents, including experts from core and related industries and preferred manufacturers, to obtain and verify critical qualitative and quantitative information as well as to assess growth prospects. Key players in the co-packaged optics market were identified through secondary research, and their market rankings were determined through primary and secondary research. This research included studying annual reports of top players and interviewing key industry experts such as CEOs, directors, and marketing executives.
Secondary Research:
In the secondary research process, various secondary sources were referred to for identifying and collecting information important for this study. Secondary sources included corporate filings, such as annual reports, investor presentations, and financial statements; trade, business, and professional associations; white papers; co-packaged optics products-related journals; certified publications; articles by recognized authors; directories; and databases.
Secondary research was conducted to obtain key information about the industry supply chain, market value chain, key players, market classification and segmentation as per industry trends to the bottom-most level, geographic markets, and key developments from both market- and technology-oriented perspectives. Data from secondary research was collected and analyzed to determine the overall market size, which was further validated by primary research.
Primary research
In the primary research process, various primary sources from the supply and demand sides were interviewed to obtain qualitative and quantitative information for this report. Primary sources from the supply side included industry experts such as CEOs, VPs, marketing directors, technology & innovation directors, and key executives from major companies in the co-packaged optics market.
After going through market engineering (which includes calculations for market statistics, market breakdown, market size estimations, market forecasting, and data triangulation), extensive primary research was conducted to gather information and verify and validate the critical numbers obtained. Primary research was conducted to identify segmentation types, industry trends, key players, competitive landscape, and key market dynamics such as drivers, restraints, opportunities, and challenges, along with the key strategies adopted by players operating in the market.
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Market Size Estimation
In the complete market engineering process, both top-down and bottom-up approaches were used, along with several data triangulation methods, to estimate and forecast the size of the market and its segments and subsegments listed in the report. Extensive qualitative and quantitative analyses were carried out on the complete market engineering process to list the key information/insights pertaining to the co-packaged optics market.
The key players in the market were identified through secondary research, and their rankings in the respective regions were determined through primary and secondary research. This entire procedure involved the study of the annual and financial reports of top players, as well as interviews with industry experts such as chief executive officers, vice presidents, directors, and marketing executives for quantitative and qualitative key insights. All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources. All parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated and enhanced with detailed inputs and analysis from MarketsandMarkets and presented in this report.
Co-packaged optics market: Bottom-up Approach
Co-packaged optics market: Top-down Approach
Data Triangulation
After arriving at the overall size of the co-packaged optics market from the market size estimation process explained above, the total market was split into several segments and subsegments. Where applicable, the market breakdown and data triangulation procedures were employed to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data was triangulated by studying various factors and trends from both the demand and supply sides. Along with this, the market size was validated using top-down and bottom-up approaches.
Market Definition
Co-packaged optics (CPO) is a technology that combines optical transceivers directly with electronic chips or application-specific integrated circuits (ASICs) within a single package. By integrating optical and electronic components, CPO creates a more compact and efficient data transmission and processing solution. In CPO, optical components such as lasers, modulators, and photodetectors are integrated with electronic components like ASICs or processing units in close proximity within the same package. The close integration of optical and electronic components in CPO can result in lower latency in data transmission, making it ideal for applications that require real-time processing, such as financial trading platforms or 5G networks.
Key Stakeholders
- Component and material providers
- Semiconductor foundries
- Silicon photonics platform developers
- Silicon photonics product manufacturers and suppliers
- Assembly and testing vendors
- Original equipment manufacturers
- Research organizations and consulting companies
- Technology investors
- Associations, alliances, and organizations related to silicon photonics
- Analysts and strategic business planners
- End users
Report Objectives
- To define, describe, and forecast the co-packaged optics market based on data rates, components, applications, and regions.
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To forecast the sizes of various segments with respect to four major regions—
North America, Europe, Asia Pacific, and RoW - To provide a detailed analysis of the co-packaged optics supply chain
- To analyze the impact of the recession on co-packaged optics market
- To strategically analyze the micromarkets1 with respect to individual growth trends and prospects and their contributions to the total market
- To understand competitive developments such as expansions, agreements, partnerships, acquisitions, product developments, and research and development (R&D)
- To analyze the opportunities for market players and provide details of the competitive landscape of the market
- To benchmark the market players using the proprietary company evaluation matrix framework, which analyzes the market players on various parameters within the broad categories of business strategy excellence and strength of product portfolios
- To strategically profile the key players and comprehensively analyze their market positions in terms of ranking and core competencies2, along with a detailed market competitive landscape
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to the specific requirements of companies.
Product analysis
- Detailed analysis and profiling of additional market players
The following customization options are available for the report:
- Market sizing and forecast for additional countries
- Additional five companies profiling
Growth opportunities and latent adjacency in Co-Packaged Optics Market