TrendForce: NVIDIA and Broadcom Begin Small-Scale Shipments of CPO Switches; Optical Engine Yield and Advanced Packaging Capacity Become Key Factors
The commercialization inflection point for CPO technology has arrived—flagship switches from NVIDIA and Broadcom have entered mass production, boosting bandwidth while reducing power consumption by up to 70%, with deployment validation completed by giants like Meta. However, doubts remain about whether the volume ramp-up window in 2027–2028 can be realized amid the triple pressure of optical engine yield challenges, silicon photonics capacity bottlenecks, and competition for advanced packaging resources. Vertical integration has become the key decisive factor; those who control the core supply chain hold the ticket to the next round of competition
Co-packaged optics technology has reached a commercialization inflection point, but the supply capability of core components will determine the direction of the market landscape.
According to TrendForce, NVIDIA’s next-generation Spectrum-X CPO switches have begun shipping to select partners, and Broadcom’s 51.2T Bailly CPO switches are also continuing small-scale shipments, marking the formal entry of co-packaged optics (CPO) technology into the mass production phase. This technological breakthrough represents a critical step forward in building next-generation high-bandwidth data center infrastructure.
However, the start of mass production does not mean supply bottlenecks have been eliminated. TrendForce points out that the supply capability of core components such as optical engines, silicon photonics chips, and advanced packaging will become key variables constraining the expansion speed of CPO switch production, directly affecting the competitive landscape of related industry chain players during the market volume ramp-up cycle from 2027 to 2028.
In the face of supply chain pressures, leading vendors such as NVIDIA and Google have adopted differentiated response strategies, with the trend toward vertical integration becoming increasingly apparent. Vendors capable of independently controlling core resources are expected to gain an advantage in the next round of competition.
Two Flagship Products Land, Accelerating CPO Commercialization
NVIDIA’s Spectrum-X CPO switch was developed in collaboration with TSMC, utilizing the COUPE advanced packaging process, with processing capabilities reaching 400 Tb/s. TrendForce expects its production capacity to expand further in the second half of 2026.
Broadcom’s 51.2T Bailly CPO switch is being assisted into mass production by partners Delta Electronics and Micas Networks. Compared to traditional pluggable optical transceivers, this product can reduce power consumption by up to 70%. Hyperscale cloud providers such as Meta have completed deployment validation, indicating that its feasibility in actual data center environments has been preliminarily confirmed.
By integrating optical components around the switch ASIC, CPO technology significantly increases bandwidth while achieving lower power consumption, and is regarded by the industry as the core development direction for next-generation high-bandwidth switches. The successive landing of these two flagship products marks the formal transition of CPO from the technology verification stage to large-scale commercialization.
Triple Bottlenecks Constrain Supply Chain Expansion Amid Structural Pressure
Although mass production has begun, TrendForce observes that the CPO switch supply chain faces three core constraints.
The first is the optical engine segment. Optical engines must integrate multiple components such as lasers and modulators, involving complex processes and extremely high yield requirements, compounded by thermal management challenges. Currently, only a few suppliers possess mass production capabilities, resulting in severe lack of supply elasticity.
Second, the construction cycle for silicon photonics capacity is long. Silicon photonics wafer foundry and backend packaging have strict requirements for precision and reliability, meaning capacity construction cannot quickly respond to demand growth in the short term, forming a structural constraint on the supply side.
Third, competition for advanced packaging capacity is intensifying. CPO switches rely heavily on advanced packaging processes such as COUPE, but AI chips and high-performance computing (HPC) applications are also competing for similar packaging capacity, causing continuous compression of CPO supply chain resources. The superposition of these three bottlenecks creates significant uncertainty regarding the expansion pace of CPO switches.
Diverging Strategies Among Leading Vendors, Vertical Integration Becomes the New Normal
In the face of supply chain pressures, the response paths of leading vendors show clear divergence. Some cloud giants choose to lock in supply through long-term purchase agreements and strategically invest in upstream silicon photonics companies to secure core resources early. NVIDIA has chosen to deepen cooperation with TSMC, which controls advanced packaging capacity, to advance its vertical integration layout. Meanwhile, vendors like Google are accelerating the in-house development of optical components to reduce reliance on external suppliers.
TrendForce expects vertical integration to become the new industry normal. Vendors capable of independently controlling silicon photonics design, optical engine manufacturing, and advanced packaging resources will gain a leading advantage during the CPO switch market volume ramp-up cycle from 2027 to 2028, while vendors relying on external procurement may face greater cost pressures and delivery risks during periods of supply tightness.
