Industry Briefing 1: CPO Technology Drives AI Compute Power Revolution in Optical Communications
The optical communications industry is undergoing a transformative shift driven by the surging demand for AI compute power, with Co-Packaged Optics (CPO) emerging as a pivotal technology. CPO integrates optical engines with switching chips on a single substrate, drastically reducing power consumption and latency while boosting bandwidth efficiency—making it ideal for AI-intensive applications like large language model training and high-frequency trading.
In July 2025, Eoptolink, a global top-three optical module supplier, announced a staggering 328%-385% year-on-year profit increase in H1 2025, primarily due to mass shipments of 800G modules and the rollout of 1.6T products. Its stock surged 20% on July 15, leading a rally in the CPO sector, with Innolight and Tianfu Communications rising over 10%. Innolight, the world’s 800G module market leader with a 40%+ share, confirmed its 1.6T modules have passed North American cloud provider certifications and entered small-batch production.
Market research firm LightCounting predicts CPO’s penetration in 800G/1.6T ports will jump from 12% in 2024 to 30% by 2027, while Yole forecasts the CPO market to grow from $46 million in 2024 to $8.1 billion by 2030. This growth is fueled by AI infrastructure expansion—NVIDIA’s GB200 NVL72 server adopts CPO with optical engines placed within 5cm of GPUs, and Broadcom’s Tomahawk 6 CPO switch offers 102.4Tbps capacity.
Chinese manufacturers are accelerating both production and R&D. Eoptolink’s Thailand Phase II plant began mass-producing 1.6T modules in 2025, while Innolight’s Phase III of the Tongling Industrial Park aims to further scale capacity. Meanwhile, NVIDIA’s recent approval to sell H20 chips to China and the launch of RTX Pro GPUs are expected to inject new momentum into the domestic CPO ecosystem.
As AI-driven data centers demand higher bandwidth and lower latency, CPO is poised to redefine the optical communications landscape. The technology’s ability to address both performance and energy efficiency challenges positions it as a cornerstone for next-gen AI infrastructure, promising sustained growth for industry leaders.
Industry Briefing 2: 2025 Optical Network Trends Reshape Connectivity Paradigm
The optical communications industry is entering a new era of innovation, with 2025 marking a turning point for next-gen network architectures. At MWC 2025, FiberHome, in collaboration with top research institutions, unveiled the "Top 10 Optical Network Trends for 2025," highlighting key advancements reshaping the sector.
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AI-Enabled Network Intelligence: AI and digital twin technologies are enabling autonomous network optimization, reducing operational costs by 20% while improving resource utilization by 10%. For example, intelligent routing algorithms dynamically adjust light paths to meet real-time demands from applications like autonomous driving and smart cities.
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Hollow-Core Fiber Commercialization: After successful trials by China’s telecom operators and Microsoft’s plan to deploy 15,000 km for data center interconnects, hollow-core fiber is set for initial commercialization in 2025. With 30% lower latency and 3x reduced nonlinear effects, it is a game-changer for AI supercomputing and long-haul transmission.
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B1T and Terahertz Breakthroughs: ITU-T’s B1T electrical layer standardization and T-bit optical die development aim to push single-fiber capacity to unprecedented levels. Meanwhile, Huawei’s 6G terahertz technology achieves 1Tbps speeds with sub-0.1ms latency, laying groundwork for future "space-air-ground-sea" integrated networks.
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Small-Granule OTN Deployment: To support diverse 5G-A and IoT services, small-granule OTN is gaining traction in metro and access networks, offering flexible bandwidth allocation for edge computing and enterprise leased lines.
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Industry Consolidation: Mergers and acquisitions are reshaping the competitive landscape. For instance, Dongshan Precision’s $5.935 billion acquisition of Source Photonics aims to integrate PCB manufacturing with optical modules, while Eoptolink and Innolight are expanding through overseas plants and R&D hubs.
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Sustainability-Driven Innovations: ZTE’s C+L band optical modules reduce power consumption by 68% and save 60% in rack space, aligning with global green network initiatives. Similarly, silicon photonics and CPO technologies are prioritized for energy efficiency.
As demand for 6G, edge computing, and smart infrastructure grows, these trends underscore the industry’s shift toward higher speeds, smarter networks, and broader connectivity. By 2025, optical communications will not only underpin digital transformation but also pioneer new frontiers in space, air, and maritime communications, solidifying its role as the backbone of the global digital economy.
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