Northbrook, IL 60062 -- (SBWire) -- 12/20/2023 --The co-packaged optics market is projected to grow from 15 million in 2023 to USD 49 million by 2028, registering a CAGR of 26.5% during the forecast period. Growing workload of AI/ML-based use cases indatacenter and rising deployment of 5G network will drive the market for co-packaged optics. The growing number of internet users and increasing use of IoT and connected devices in education, healthcare will also boost market growth in the coming years.

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Based on Region, North America is expected to lead the co-packaged optics market during the forecast period, with US being the largest market in the region. US holds the major share in co-packaged opticss in North America. With the introduction of 5G networks and the expansion of edge computing infrastructure, the increasing demand for low latency and high bandwidth are creating opportunities for CPO technology in the upcoming years. Furthermore, there is a growing demand for seamless communication between edge devices to handle data-intensive tasks locally, which is driving the market growth in the US. Hence, the above-mentioned factors would drive the co-packaged optics market in North America.

The co-packaged optics market is being driven by the growth of mega data centers, which require high-speed, reliable connections between the different components of the data center. CPO provides a more efficient and cost-effective way to connect the components of mega data centers, making it an ideal solution for meeting this demand. As the number of mega data centers continues to increase, the demand for CPO is also expected to grow, driving the growth of the CPO market in the coming years. Active investments in the development of new data center facilities are expected to drive the growth of the co-packaged optics (CPO) market over the forecast period. Thus, the increasing infrastructure and technology development in the data center industry is driving the co-packaged optics market.

Moreover, with the rise in the number of internet users, the bandwidth per user is expanding, increasing the demand for co-packaged optics solutions in communication networks. Major content and cloud service providers like Google, Microsoft, Amazon, Netflix, Apple, and Facebook generate large amounts of network traffic globally and are the primary sources of demand. These companies account for two-thirds of the used international capacity and are the dominant users of international bandwidth. Their top priority in international network planning is linking their data centers and major interconnection points, often taking up tremendous capacity on the core routes while focusing less on secondary long-haul routes. Thus, the co-packaged optics market is driven by the growth of high-performance computing as it requires high-speed and reliable connections to transmit data between the different components of the system.

The data centers and high-performance computing application is expected to hold the largest market share during the forecast period. The adoption of emerging technologies like silicon photonics has made CPO more feasible and cost-effective. These technologies enable the integration of optical components directly onto semiconductor packages. The market for CPO is expected to grow significantly due to the increasing research and development investments by CPO companies towards the development of this technology. The demand for MXC connectors, photonic-integrated circuits, silicon optics, etc., is also on the rise across the world.

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Major players operating in the co-packaged optics market include Broadcom (US), Molex (US), Marvell (US), RANOVUS (Canada), Ragile Networks Inc. (US), SENKO (US), Quanta Computer Inc. (Taiwan), Furukawa Electric Co., Ltd. (Japan), among others. These companies have strong distribution networks and reliable manufacturing facilities across key regions, such as North America, Europe, and Asia Pacific. They have an established portfolio of a robust market presence, reputable products and services, and strong business strategies. Furthermore, these companies have a significant market share, products with varied applications, broader geographical use cases, and a more extensive product footprint.