Nvidia and Broadcom ramp volume production of co-packaged optics switches

The shift from pluggable transceivers to CPO architecture is the primary technical solution for scaling data centers without prohibitive power costs. For streaming infrastructure providers, this transition reduces the latency and cooling requirements of high-density edge and core networking. However, the reliance on high-precision silicon photonics and shared advanced packaging lines with AI GPUs means networking hardware will likely face the same supply volatility seen in the semiconductor market. Watch the yield rates of TSMC’s COUPE platform as a lead indicator for CPO availability through 2027.

The transition to co-packaged optics (CPO) marks a critical architectural shift as traditional copper interconnects reach their physical limits. Per TrendForce reporting in July 2026, CPO is expected to grow from just 0.5% of AI data center optical modules in 2026 to 35% by 2030. During a July 2026 earnings call, TSMC Chairman C.C. Wei confirmed that CPO has officially entered mass production at the foundry level, supported by an increased capital expenditure forecast of up to $64 billion to meet demand for advanced packaging.

Strategic vertical integration is accelerating across the supply chain to secure these specialized components. GlobalFoundries established itself as a major player in November 2025 by acquiring Singapore-based Advanced Micro Foundry, creating what it claims is the largest pure-play silicon photonics foundry. In a similar move during July 2026, UMC began mass-producing silicon photonic chips on 300mm wafers to stabilize supply for high-bandwidth applications. While current production focuses on switches, the next competitive phase involves integrating optics directly into compute packages containing HBM and GPUs.

Market leaders are already securing early deployments to validate long-term reliability. Broadcom announced in October 2025 that its CPO platform achieved one million link hours without a single "flap" (connectivity disruption) during testing with Meta. Meanwhile, Samsung is positioning itself for a 2028-2029 ramp, aiming to use its unique position as a manufacturer of memory, logic, and photonics to offer a turnkey "all-in-one" CPO service that rivals the TSMC-Nvidia alliance.