When Cisco took to the stage at the Optical Fiber Conference (OFC) 2023 to demonstrate co-packaged optics (CPO) on a 3.2TB switch, it is fair to say the technology did not receive a rapturous reception.

“I would say the industry response at that time ranged from indifference or a yawn to fairly negative,” Bill Gartner, SVP & GM, optical systems and optics at Cisco, tells DCD.

It wasn’t that three years ago the world didn’t care about the potential benefits of CPO. Rather, as Gartner explains it, the negative response stemmed from a number of concerns, one being that the technology would introduce vendor lock-in to an environment that traditionally allowed for a multi-vendor approach.

“There’s a switch, which makes up the bulk of the router and its costs, and then there are ports on the face plate into which you plug these pluggable optics,” Gartner explains. “But a customer has a choice of which pluggable optic they want to use, and there are many providers of pluggable optics. That gives them negotiating leverage and the ability to make sure that they've got supply chain diversity, which gives them a lot of benefit.”

In 2023, customers were fearful that CPO would force them into an all-Cisco or all Broadcom world, Gartner says, although he stresses that while Cisco is one of the aforementioned providers of pluggable optics, the company is not in the habit of forcing its customers to buy Cisco.

“Multi-vendor gives customers leverage, and customers like that leverage. It gives them peace and comfort that they're not going to be held hostage by a single source.”

While vendor lock-in remains an issue that CPO has yet to fully resolve three years later, it appears that the indifference Gartner witnessed on the OFC stage has vanished, replaced by an industry ready to shrug off all concerns and welcome the technology with open arms.

What is co-packaged optics?

Co-packaged optics emerged as a concept around the start of the decade, when the data center industry began discussing the need for a solution to the power and bandwidth bottlenecks it was increasingly experiencing.

“In the old days, your electrical connections were copper. Your data center networks were connected by Ethernet, and everything was good,” says Roy Chua, founder and industry analyst at AvidThink. “Then, as speeds increased, copper became unable to handle the volume of traffic, so the industry turned to fiber optics,” which Chua notes was also good, until it wasn’t quite good enough anymore.

Fiber optics requires the use of lasers to convert electrical signals into optics, or photons, so they can be transported over the glass fiber, then reconverted from optical signals back to electrical ones when they reach the other side. “So that's all wonderful, except that all takes a certain amount of energy,“ Chua says.

In today’s data center environments, most electrical to optical conversions take place via pluggable optical transceivers, known as digital signal processors (DSP), which connect to the switch. However, DSPs are expensive and power hungry, meaning that although they have clear benefits over copper interconnects, they are not quite the power-efficient option the industry is looking for.

Enter: Co-packaged optics. On a very basic level, unlike pluggable optics, where the transceivers are kept separate from the main chips, CPO integrates optical and electrical components, such as optical engines and switching ASICs, on a single packaged substrate.

“What co-packaged optics does is move the conversion onto the actual silicon itself. It moves those lasers onto the silicon, eliminating the need for any external units,” Chua explains. “And by putting those lasers inside the silicon, you are able to save power. By co-packaging these elements, it allows for more consolidation while lowering costs and energy use.”

However, while the concept might seem relatively straightforward, the practicalities are less so. “As you can imagine, manufacturing of co-packaged optics can be complicated because you have to manufacture everything – your wave guides and your modulators – all together.”

Therefore, it's unsurprising that another early concern regarding the technology was its potential cost, with Chua noting that “people felt it would not be sufficiently reliable and cost-effective enough to produce and take to market. “

The reliability of the technology has also come under scrutiny from customers, with questions arising as to how to go about replacing a laser that has failed when it's part of a monolithic structure, particularly given the so-called blast radius of optics, and the high failure rate of lasers.

The industry has responded by developing a hot-swappable laser source known as an External Laser Small Form-Factor Pluggable (or ELSFP) while keeping everything monolithically integrated. Gartner says that although this solution certainly helps to address the challenge, it’s something of a half measure that doesn’t succeed in solving the issue entirely.

The shifting optical landscape

According to AvidThink’s Data Center Networking in 2026 report, CPO is one of several new architectures that are driving a “structural shift” in the optical interconnect landscape, namely removing the need for DSPs from optical transceiver modules.

In addition to CPO, there’s what Chua describes as a half-step, known as linear pluggable optics (LPO), and a three-quarter step called near-packaged optics, with LPO currently the most popular of the three. There’s also eXtra-dense pluggable optics, or XPO, which was developed by Arista but described by Chua as less of a pure technology and more of a packaging form factor. [See Box Out].

While co-packaged optics is not a new concept, AvidThink’s report notes that the technology reached a milestone this year, transitioning from “perpetual promise to production deployment,” with both Chua and Gartner agreeing this has been largely driven by announcements made by Nvidia CEO Jensen Huang at GTC 2026.

At the March conference, Huang indicated that Nvidia’s Spectrum-X CPO switches would be in production in H2 2026, and officially announced that the chip giant’s 2028 Feynman architecture would introduce NVLink 8 CPO, bringing silicon photonics directly to the GPU-to-GPU scale-up interconnect for the first time.

AvidThink says this is architecturally significant as, until now, CPO has been applied to scale-out switch-to-switch connections. Applying it to the latency-critical scale-up domain signals that CPO technology has achieved the maturity and performance required for the most demanding interconnect tier.

“Until Jensen said CPO, no one cared about CPO. No one had any idea what CPO was, and now I get asked that question all the time,” Chua laughs. He also questions whether anyone in the industry would have been saying widespread adoption of the technology would take place in 2028 had Huang not gotten on stage and made the Feynman announcement.

“Without Jensen sort of stoking the fire, I think it would have been the 2027 - 2028 conversation, and Jensen basically made it the 2025 - 2026 conversation,” Chua says, adding that “to be frank, I wasn't expecting it.”

While Chua says Huang has put a rocket under the industry – with Broadcom in particular being incredibly aggressive around its timelines for deployment in the wake of Huang’s comments – the AvidThink report does highlight that there have been a number of other notable CPO announcements from the last 18 months.

These include AMD’s January 2025 acquisition of Enosemi; Lightmatter unveiling Passage L200, the world’s first 3D co-packaged optics product; Broadcom announcing its Tomahawk 6 CPO variant ‘Davisson’; Marvell’s acquisition of Celestial AI; Coherent demonstrating multi-technology CPO at OFC 2026; and Ayar Labs and Wiwynn announcing a joint reference design for optically connected, rack-scale AI systems.

Furthermore, in March 2026, Ciena, Coherent, Marvell, Molex, Samtec, and TeraHop announced the formation of the Open CPX MSA (Open Co-packaging Multi-Source Agreement) to develop the specifications for optical engines “required to enable a broad ecosystem of interoperable co-packaged and near-package interconnect solutions.”

Where are we now?

While all of these announcements appear to indicate significant demand, Gartner says it's important to note that a lot of work in the CPO space was initially vendor, not customer, driven, as demonstrated by those poor early responses.

“[In 2023] Cisco and Broadcom announced these CPO demos and didn't get a great customer response. Then Nvidia announced that they were going to deploy CPO and, quite honestly, stimulated a lot of excitement in the industry – I think maybe irrational exuberance is the way I would characterize it though.”

Although Cisco had already demoed a co-packaged optics prototype back in 2023, Gartner says the company has not yet announced a commercial CPO line, although he says that it does have CPO technology under development.

“We're playing this a bit cautiously,” he explains. “We don't want to come across to our customers like we're not going to give them a choice.”

Gartner says Cisco’s initial CPO offering will likely be in the 100-terabit switch capacity range, and the company will continue to give customers a choice between pluggables and an embedded option, be that CPO or NPO.

“Again, we have not announced a product yet; this is something that's under development, and we're really going to be cautious about launching it based on customer demand. We want to see the customers are really pulling for this, as opposed to it being a vendor push.”

In the meantime, the company is developing LPO options for its Silicon One portfolio, with the first commercially available 800G LPO modules for its Nexus 9000 series switches and 8000 series routers released in February 2026.

“I think the challenge that we have to acknowledge here is that the industry ecosystem is evolving around CPO, but it’s not mature. The ecosystem around silicon is highly mature – we know how to put a package and substrates around silicon, and we know how to do that around optics, and build a pluggable optics module, but we don’t have an ecosystem that’s mature and can put those two together,” Gartner says.

“There's a lot of invention right now around things like connectors for CPO, substrates that support the optics, and optical chiplets, but that's an immature ecosystem, and it really has to mature pretty significantly before we'll see this technology make sense at volume. Anybody can produce a hundred of these things, but when we have to talk about delivering thousands or millions, that ecosystem really needs to be mature, and that's going to take some time.”

Despite all the excitement, Chua also acknowledges that, at the moment, CPO is being deployed at “a very small scale.” However, he says all early signs are promising, and the data show that the technology will be able to scale up and be deployed into production.

In particular, Meta’s deployment of the Broadcom Tomahawk 5 ‘Bailly’ CPO switch in its data centers resulted in a 0.34 percent annual link failure rate during the first million hours of testing, making it roughly five times more reliable than traditional pluggable transceivers that were used as control groups.

As a result, Chua says he can’t see anything on the horizon that would block the mass adoption of co-packaged optics in the near future, and he expects to see some level of volume shipments from Broadcom of its Tomahawk 6 ‘Davisson’ CPO variant.

For Gartner, however, whether the reality of CPO lives up to the hype remains to be seen, especially with regard to the timelines being touted by vendors such as Nvidia and Broadcom. While shiny and new will be enough for some people to jump on board the co-packaged optics train, for him, the real turning point for the technology will be when all the other technologies currently on offer hit their ceiling, making CPO a necessity.

“Today, the SerDers rate coming off the silicon is 200G per line, and at that rate, in my view, it's a toss-up as to whether CPO or LPO makes sense,” he says. “Once we get to 400G per line, then LPO becomes much more challenging ... that is where the ability for LPO to continue serving the market diminishes, and the need for CPO becomes more real.”