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NPO gains ground as CPO delays push NPO volume expectations to end of decade
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SemiAnalysis argues near-packaged optics (NPO) is the interim architecture the industry will lean on while co-packaged optics (CPO) matures, citing CPO yield and serviceability problems that push full CPO production to 2028 or 2029.
For engineers building AI-scale networks, NPO preserves most of CPO's power savings while keeping the optical engine socketable and field-replaceable, avoiding the scenario where one dead engine condemns an entire switch ASIC. Whether CPO's challenges are temporary or structural determines whether NPO is a bridge or a long-term architecture, and that question is far from settled among analysts.
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SemiAnalysis pushed CPO volume expectations to 2027 for scale-out networks and 2028 or 2029 for full-scale production, knocking 17% off Applied Optoelectronics and roughly 8% off Lumentum in a single session.
NPO moves the optical engine beside the ASIC on a separate socketable substrate, dropping the DSP while allowing field replacement of failed engines, unlike soldered CPO engines that cannot survive rework temperatures.
Broadcom demonstrated a 3.2T VCSEL-based NPO product line at OFC 2026 and six connector and optics firms formed a standards group to define a common NPO socket.
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