CPO/NPO Entering an Accelerated Adoption Phase; Optical Engine Demand Expectations Raised

Overview

This report tracks the migration of AI data centers from traditional optical interconnects toward CPO and NPO architectures. NVIDIA has announced that Spectrum-X CPO switches have entered mass production; the report believes NVIDIA Scale-up and AWS Trainium 4 platforms will drive rapid growth in NPO and optical engine demand after 2027E.

Core views

NVIDIA's Scale-out CPO mass production validates supply-chain capabilities, and TSMC has expanded capacity for CPO testing and inspection equipment. On the Scale-up side, NVL576 may adopt a 9-18-9 tray design, although its 0.75U height creates mechanical challenges; a return to a 10-9-8 configuration cannot be ruled out. The report believes architecture changes will have limited impact on total optical engine usage. AWS Trainium 4 is expected to have three configurations, two of which may adopt NPO and potentially NVIDIA NVLink Fusion.

Analysis framework

Based on NVIDIA's official mass-production announcement, supply-chain capacity and supplier progress, rack architecture analysis, and platform configurations across cloud service providers, the report develops bottom-up forecasts for CPO/NPO switch and optical engine shipments.

Methodology notes

• Supply-chain researchBottom-up shipment forecasting

  Estimate demand based on platform architecture, rack configurations, the number of optical engines per ASIC, and adoption timing.

  The report estimates optical engine demand for each platform based on the potential architectures of NVIDIA NVL576 and AWS Trainium 4, and aggregates demand from other cloud service providers.

• Technology roadmap analysisCPO/NPO architecture evolution

  Compare the adoption paths and implementation constraints of Scale-out CPO and Scale-up NPO.

  The report focuses on the impact of tray structures, rack space, and mechanical challenges on solution selection, while assessing their effect on optical engine usage.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Lumentum (LITE)

  Beneficiary of rising CW laser demand

  Strengths

  Benefits from increased CW laser demand driven by CPO/NPO.

  Weaknesses

  The report does not provide operating data or valuation support.

  Comparison

  The report assigns a Buy rating, while Coherent is rated Hold.

  Risks

  Slower AI demand, supply constraints, and industry competition.

• Coherent (COHR)

  Beneficiary of rising CW laser demand

  Strengths

  Can benefit from growing demand for CW lasers related to CPO/NPO.

  Weaknesses

  The report assigns only a Hold rating, indicating relatively more limited investment appeal than Lumentum.

  Comparison

  The rating is more cautious than Lumentum's Buy rating.

  Risks

  Slower AI demand, supply constraints, and industry competition.

• Browave (3163 TT)

  CPO shuffle box supplier

  Strengths

  Expected to have approximately 50% market share and benefit as CPO volumes scale.

  Weaknesses

  Shipment ramp-up still depends on the pace of CPO mass production.

  Comparison

  It is positioned in the CPO-specific component segment, with a more concentrated benefit thesis than optical engine suppliers.

  Risks

  Slower-than-expected mass-production progress, customer concentration, and competition.

• Semtech (SMTC)

  Beneficiary of TIA/Driver demand

  Strengths

  The report believes high-speed interconnect upgrades will drive higher TIA/Driver demand.

  Weaknesses

  The report does not disclose specific market share or financial contribution.

  Comparison

  Like Marvell, it benefits from demand for analog and high-speed interconnect chips.

  Risks

  Slower AI demand, supply constraints, and competition.

• Marvell (MRVL)

  Beneficiary of TIA/Driver demand

  Strengths

  Can benefit from demand for high-speed interconnect chips under CPO/NPO architectures.

  Weaknesses

  The report does not provide specific shipment forecasts.

  Comparison

  Alongside Semtech, it benefits from increased TIA/Driver demand.

  Risks

  Slower AI demand, supply constraints, and competition.

• Tower Semiconductor (TSEM)

  Beneficiary with revenue exposure to NPO PICs

  Strengths

  The report notes that it has revenue exposure to NPO PICs.

  Weaknesses

  The degree of benefit depends on actual NPO penetration.

  Comparison

  Compared with component suppliers, it has more direct exposure to PIC manufacturing demand.

  Risks

  Delayed NPO adoption, supply constraints, and competition.

Key data

• NVIDIA Scale-out CPO switch shipment forecast2026E/2027E: 15,000/100,000 unitsSpectrum-X CPO switches have entered mass production.
• NVIDIA platform optical engine shipment forecast2027E/2028E: 6 million/19 million unitsIncludes NVIDIA Scale-up NPO demand.
• AWS Trainium 4 optical engine demand forecast2H27E/2028E: 5 million/12 million units6.4T specifications are expected to predominate, with two configurations adopting NPO.
• Global Scale-up NPO optical engine shipment forecast2027E: 11 million units; 2028E: 40 million unitsIncludes NVIDIA, AWS, and other cloud service provider platforms.
• Browave shuffle box share and ramp-upApproximately 50% market share; more than 10,000 units in 4Q26EThe report expects further acceleration in 1H27E.

Impact & implications

CPO mass production and NPO platform adoption will expand demand beyond standalone switches to multiple segments, including optical engines, CW lasers, TIA/Drivers, PICs, shuffle boxes, and system assembly. In the near term, focus should be on NVIDIA's production ramp and supply-chain capacity expansion; after 2027E, focus should shift to the finalization of Scale-up architecture and AWS Trainium 4's actual configurations.

Risks

• Slower AI demand.
• Supply-chain capacity or key component supply constraints.
• Intensifying supply-chain competition.
• NVIDIA's Scale-up tray architecture has not yet been finalized.
• AWS Trainium 4's actual configurations and pace of NPO adoption may be below expectations.

What to watch

• Quarterly shipments of NVIDIA Spectrum-X CPO switches and supply-chain capacity-expansion progress.
• The final NVL576 tray architecture and its impact on component design.
• AWS Trainium 4's NPO configurations, adoption of NVLink Fusion, and mass-production timing.
• Actual penetration of 6.4T optical engine specifications.
• Orders and capacity changes for CW lasers, shuffle boxes, TIA/Drivers, and NPO PICs.