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AI supply chain term

Co-packaged optics (CPO)

Co-packaged optics places the optical components in the same package as the switch chip to cut the power and distance electrical signals must travel.

What it means

Co-packaged optics (CPO) integrates the optical engines that convert electricity into light right next to the switch or compute silicon, instead of in separate pluggable modules at the edge of the box. Shortening the electrical path slashes the power spent driving signals and can raise bandwidth density, addressing an 'optics power wall' that grows worse as data rates climb toward 1.6T and beyond. In the AI supply chain CPO sits at the networking layer, where moving data between racks is becoming a major share of a cluster's energy budget. It is the leading path to break that power wall at scale, but it changes how systems are built and serviced. That makes CPO both a large efficiency lever and a disruptive shift for the optics and switch supply base.

Why it matters to investors

CPO could redraw the optics value chain, moving content from pluggable-module makers toward the switch and packaging players who integrate optics directly with silicon. Whether hyperscalers adopt CPO, LPO, or stay with pluggables is a key swing factor for photonics suppliers.

See Co-packaged optics in the AI value chainIts live model score, why it matters, and every company exposed to it.

Companies on this part of the chain

BroadcomAVGOPOET Technologies Inc.POETCelestica Inc.CLS

Named to show where the term sits in the AI supply chain — research, not advice, and never a recommendation to buy or sell.

Related terms

Silicon photonicsSilicon photonics is the practice of building optical parts — lasers, modulators, waveguides and detectors — on silicon chips using standard semiconductor manufacturing.Optical transceiver / photonicsA module that converts electrical signals to light (and back) for optical links.Linear pluggable optics (LPO)Linear pluggable optics is a lower-power optical module design that removes the power-hungry DSP chip and drives the laser with a simpler analog signal path.1.6T optics1.6T optics are the next generation of optical transceiver modules, doubling the per-module data rate to 1.6 terabits per second.

See Co-packaged optics in the live AI chain.

THE ENTITY maps every constraint onto one live model — which part is tight now, who owns it, and who gets squeezed when it moves. Plain-English reads you can check.

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THE ENTITY is an educational read on the AI supply chain — research, not investment advice. It explains how the chain works and who sits where, never price targets or buy/sell calls.