According to IDTechEx, the Co-Packaged Optics (CPO) market is projected to exceed US$20 billion by 2036, growing at a robust CAGR of 37% from 2026 to 2036. CPO network switches are expected to dominate revenue generation, driven by each switch potentially incorporating up. Co-Packaged Optics (CPO) is an advanced optical interconnect architecture that integrates optical components—such as photonic integrated circuits (PICs) and lasers—directly alongside switching ASICs or processors within the same package. This approach significantly reduces electrical I/O distance. That playbook is no longer holding for today's AI systems. As AI clusters push beyond 100 Tb/s per node, the gap between what silicon can generate and what traditional copper interconnects can deliver is widening fast. It reviews recent advances in CPO technology, tracks emerging packaging approaches, assesses the strategies of leading companies, and provides long term market. Co-Packaged Optics (CPO) Market (By Component: Optical engines/transceivers, Photonic integrated circuits, Lasers, Modulators, Electrical ICs / SerDes, Optical fibers and waveguides, Connectors and interfaces, Thermal management solutions, Packaging substrates and interposers, Testing and alignment. Co-packaged optics (CPO) is a disruptive approach to increasing the interconnecting bandwidth density and energy efficiency by dramatically shortening the electrical link length through advanced packaging and co-optimization of electronics and photonics. Realizing these benefits will also require a fundamental transformation in the way computing and switching assets are.
