The U.S. Co-Packaged Optics (CPO) Market size was valued at USD 39.61 million in 2025 and is predicted to attain a value of USD 834.82 million by 2035, growing with a CAGR of 30.25%. This growth is mainly attributed to huge investments in hyperscale artificial intelligence infrastructure in various data centers of leading cloud computing providers like Amazon Web Services, Microsoft Azure, Google Cloud, Meta, and Oracle in the United States. The Europe co-packaged optics market size, on the other hand, is forecasted to be USD 24.86 million in 2025 and is set to increase to USD 468.24 million by 2035, with a CAGR of 34.15%. Growth in both markets is due to increased usage of silicon photonics technology.
Austin, May 27, 2026 (GLOBE NEWSWIRE) — Co-Packaged Optics Market Size & Growth Outlook:
According to the SNS Insider, “The Co-Packaged Optics (CPO) Market Size was valued at USD 91.27 million in 2025 and is expected to reach USD 1,923.64 million by 2035, growing at a CAGR of 35.70% over 2026–2035.”
AI Infrastructure Bandwidth Crisis Creating Urgent CPO Adoption Imperative at Hyperscale Data Centres, Drive Market Growth Globally
The main factor driving structural growth in the co-packaged optics market is the mathematically certain infrastructure bandwidth bottleneck that will be generated from the exponential scaling up of the scale of AI training clusters, whereby the amount of bandwidth necessary for the all-to-all GPU connectivity model used in the training process scales quadratically with respect to the size of the cluster, thus reaching a point where the power and bandwidth constraints of plug-in transceivers become critical.
Co-Packaged Optics Market Size and Growth:
- Market Size in 2025: 91.27 million
- Market Size by 2035: 1,923.64 million
- CAGR: 35.70% during 2026–2035
- Base Year: 2025
- Forecast Period: 2026–2035
- Historical Data: 2022–2024
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Leading Market Players with their Product Listed in this Report are:
- Broadcom Inc.
- NVIDIA Corporation
- Intel Corporation
- Marvell Technology Inc.
- Cisco Systems Inc.
- Ranovus Inc.
- Ayar Labs Inc.
- Coherent Corp.
- Lumentum Holdings Inc.
- II-VI Incorporated
- Furukawa Electric Co., Ltd.
- Corning Incorporated
- Celestial AI
- Credo Technology Group Holding Ltd
- Arista Networks Inc.
- Juniper Networks Inc.
- IBM Corporation
- Lightwave Logic Inc.
- NewPhotonics Ltd.
- Kyocera Corporation
Co-Packaged Optics Market Report Scope:
| Report Attributes | Details |
| Base Year | 2025 |
| Forecast Period | 2026-2035 |
| Historical Data | 2022-2024 |
| Report Scope & Coverage | Market Size, Segments Analysis, Competitive Landscape, Regional Analysis, DROC & SWOT Analysis, Forecast Outlook |
| Key Segmentation | •By Integration Approach (2.5D CPO, 3D CPO, Others) •By Data Rate (Less Than 1.6T, 1.6T, Greater Than 1.6T) •By Application (Data Centers & HPC, Telecommunications & Networking, Defense & Aerospace, Others) •By End User (Cloud Service Providers, Telecom Operators, Government & Defense, Others) |
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Key Segmentation Analysis:
By Integration Approach
2.5D CPO dominated the market with an estimated share of around 68% in 2025 due to its integration maturity, established supply chain, and compatibility globally. 3D CPO is projected to be the fastest-growing segment owing to rising demand for higher bandwidth density, compact integration, and improved energy efficiency in AI and cloud infrastructure.
By Data Rate
Less-than-1.6T and 1.6T segments collectively accounted for approximately 72% of the market share in 2025 due to strong deployment across current-generation 51.2 Tbps switching platforms. Greater-than-1.6T segments are expected to witness the fastest growth driven by next-generation AI networking and 102.4 Tbps switching requirements.
By Application
Data Centers and High-Performance Computing held the dominant market share of around 64% in 2025 due to early hyperscale adoption of CPO technology. Telecommunications and Networking is anticipated to be the fastest-growing segment fueled by rising demand for 800G and 1.6T optical backbone infrastructure and 5G network expansion.
Regional Insights
The North American region is the most rapidly developing region for co-packaged optics, given that the unprecedentedly high investments made in AI-related facilities in American data centers will shape the path of adoption of CPO globally. The leading role of CPO technology companies based in America, such as Broadcom, Marvell, and Intel in defining the first specifications for CPO products via their commercial releases, and the funding from the CHIPS Act to develop silicon photonics manufacturing capabilities.
The Asia Pacific region took the lead in the global co-packaged optics market in 2025, owing to the fact that it is home to the highest density of hyperscale data center infrastructure in the world, and it is the leading manufacturer of optical components and integrated photonic products.
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Recent Developments:
- 2025: Broadcom introduced its third-generation co-packaged optics technology in May 2025 with 200G-per-lane capability for AI-scale networks, demonstrating ecosystem readiness with improved thermal management prototypes, OSAT process enhancements, and Corning’s optical component supply collaboration for the 51.2 Tbps Bailly Ethernet switch, positioning Broadcom as the first vendor to achieve commercial-grade CPO deployment readiness at hyperscale specifications.
- 2025: Corning Incorporated announced a collaboration with Broadcom in May 2025 to supply advanced optical components for CPO infrastructure in AI data centres, contributing optical fiber connectivity and component expertise to Broadcom’s Bailly CPO switch ecosystem and demonstrating the value chain integration between established optical component manufacturers and semiconductor switch ASIC developers that CPO commercialization requires.
Exclusive Sections of the Co-Packaged Optics Market Report (The USPs):
- SILICON PHOTONICS & OPTICAL COMPONENT METRICS – helps you understand adoption trends across silicon photonics, optical engines, wafer-scale integration, and advanced semiconductor packaging technologies in co-packaged optics systems.
- AI DATA CENTER & HIGH-BANDWIDTH NETWORKING METRICS – helps you evaluate demand generated from hyperscale data centers, AI clusters, HPC environments, and deployment growth of 800G and 1.6T networking infrastructure globally.
- TELECOM & OPTICAL INTERCONNECT DEPLOYMENT METRICS – helps you identify growth opportunities across cloud networking, enterprise networking, 5G transport infrastructure, coherent optical backbone systems, and low-latency interconnect technologies.
- ADVANCED PACKAGING & THERMAL MANAGEMENT METRICS – helps you uncover adoption trends in liquid cooling, advanced heat spreaders, compact interconnect architectures, and energy-efficient high-bandwidth packaging solutions.
- SEMICONDUCTOR MANUFACTURING & TECHNOLOGY INVESTMENT METRICS – helps you analyze regional manufacturing concentration, photonics infrastructure expansion, semiconductor packaging investments, and global supply chain developments.
- COMPETITIVE LANDSCAPE & INDUSTRY COLLABORATION METRICS – helps you gauge the competitive positioning of key players based on R&D initiatives, commercialization strategies, standardization efforts, product innovation, and strategic partnerships globally.
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