Co-Packaged Optics: The Future of High-Speed Data Transmission

06 Nov Co-Packaged Optics: The Future of High-Speed Data Transmission

As artificial intelligence (AI), cloud computing, and machine learning continue to push data centers to their limits, traditional pluggable optical transceivers are starting to show their age. The rise of Co-Packaged Optics (CPO) promises to change that — bringing optics closer to the silicon and redefining how high-speed data moves inside modern switches and servers.
This article explains what co-packaged optics are, how they differ from pluggable transceivers, and why they are becoming essential in next-generation data center design.

What Are Pluggable Optical Transceivers?

Pluggable optical transceivers are compact modules that convert electrical signals into optical signals and vice versa. They are “pluggable,” meaning they can be easily inserted or removed from network equipment such as switches, routers, or servers. Common form factors include SFP, QSFP, OSFP, and the newer OSFP-XD, each designed for specific speed and density requirements.
Inside a pluggable transceiver, electrical lanes connect the transceiver to the switch ASIC (Application-Specific Integrated Circuit). Each lane carries high-speed electrical signals—one positive and one negative line forming a differential pair—to reduce noise and maintain signal integrity. The transceiver then converts these electrical signals into light for transmission over optical fiber.
However, as data rates climb to 400G, 800G, and beyond, these short electrical connections between the ASIC and the pluggable module become a major performance bottleneck. The distance between the ASIC and the optical connector—just a few centimeters—can introduce signal loss, resistance, and latency at high speeds.

Limitations of Conventional Pluggables

Pluggable optics have served the industry for decades, offering modularity, flexibility, and easy serviceability. Yet, they face growing challenges as network speeds continue to increase:

Electrical Loss: At data rates above 100 Gb/s per lane, even small electrical paths introduce resistance and attenuation. The copper traces on the PCB can’t carry signals efficiently over long distances.

Latency and Synchronization:
More electrical lanes mean more synchronization and deskewing requirements. Each lane must be realigned at the receiver, increasing overall latency.

Power and Space:
High-speed pluggables consume significant power and require large heat sinks. As the number of lanes increases, so does the power footprint and space required on the switch front panel.

Thermal and Density Constraints:
Adding more pluggable modules increases thermal load, limiting how densely they can be packed.

Scalability Limits:
To support switch capacities above 100 terabits per second, conventional pluggables would require too many electrical lanes, making systems bulky, power-hungry, and inefficient.

Introducing Co-Packaged Optics (CPO)

Co-Packaged Optics is a revolutionary architecture where the optical engines are placed directly next to the switch ASIC on the same substrate or very close to it. Instead of sending high-speed electrical signals several centimeters to the front panel, the ASIC connects to the optics through short, low-loss electrical traces, dramatically improving efficiency.
In a typical co-packaged design, the main components include:
Switch ASIC: The core silicon responsible for Ethernet switching or AI workload interconnection.

Optical Engines (or Photonic Chiplets): Compact optical modules integrated near the ASIC, containing lasers, modulators, and photodetectors.

Retimer or SerDes Chiplets: These handle signal conditioning and serialization between the ASIC and optics.

Fiber Attachments: The optical engines connect directly to fiber ribbons or connectors, routing light to external systems.

By shortening the electrical distance between the ASIC and the optics, CPO reduces signal loss, power consumption, and latency—making it ideal for AI and hyperscale data centers.

Benefits of Co-Packaged Optics

Higher Bandwidth Efficiency:
The shorter electrical path enables data transmission at speeds exceeding 100 Gb/s per lane, paving the way for 1.6T and 3.2T systems.

Reduced Power Consumption:
Electrical traces that once required heavy equalization and amplification are now minimal. This can cut power per bit by up to 30–40%.

Lower Latency:
With fewer SerDes stages and shorter electrical runs, data travels with minimal delay—critical for AI and machine learning clusters that rely on low-latency communication.

Improved Signal Integrity:
Shorter paths mean fewer reflections and distortions, maintaining cleaner eye diagrams and better bit error rates.

Compact Design:
Integrating optics within the same package as the ASIC allows higher port density and reduced front-panel congestion.

Challenges of Co-Packaged Optics

While co-packaged optics offer major advantages, they also introduce new technical and operational hurdles:
Serviceability:
With pluggables, a failed module can be replaced easily. In CPO systems, if an optical engine fails, the entire ASIC package may need replacement—an expensive and complex process.

Thermal Management:
Co-locating optics with a high-power ASIC introduces significant heat. Since optical components are temperature-sensitive, maintaining thermal balance is challenging.

Manufacturing Complexity:
Aligning photonic and electronic components at micron-level precision requires advanced packaging technology and increases production cost.

Testing and Inspection:
It’s difficult to test and validate individual components once they are integrated into a single package.

Standardization:
The industry is still defining universal CPO standards for interoperability and scalability, unlike the well-established pluggable ecosystem.

CPO vs. Pluggable Optics: A Balanced View
Pluggable optics remain ideal for many traditional networking applications. Their modular design, easy replaceability, and mature standards make them practical and reliable. However, for AI-driven workloads requiring switch capacities of 100 Tb/s and beyond, co-packaged optics delivers unmatched efficiency, performance, and scalability.
In short:

Pluggables offer flexibility and serviceability.

CPO offers performance and efficiency for ultra-high-speed environments.

Both will coexist for years, serving different market needs.

The Future: Integration and Training

As demand for 800G, 1.6T, and beyond continues to grow, engineers must adapt to new design and deployment techniques. Understanding co-packaged optics is no longer optional—it’s essential for anyone working in optical networking or data center design.
If you’re looking to deepen your knowledge, join our Optical Networking Training Sessions. These sessions cover:

Fundamentals of fiber optics and transceiver design

Emerging technologies like Co-Packaged Optics (CPO) and optical chiplets

Practical guidance on testing, deployment, and scalability

Whether you’re a network engineer, product manager, or researcher, our hands-on courses will help you stay ahead in the rapidly evolving world of optical communication.

Conclusion

The shift from pluggable to co-packaged optics marks a major milestone in the evolution of data center connectivity. By bringing light closer to silicon, CPO reduces power, increases bandwidth, and enables the next generation of AI infrastructure.
While challenges remain in manufacturing, serviceability, and standardization, the industry’s direction is clear—co-packaged optics will define the future of ultra-high-speed data transmission.