The Rise of Co-Packaged Optics and the (Gradual) Decline of Pluggables

Pluggable optical modules in the way we have known them are on their way out. Co-packaged Optics is garnering a great deal of attention and while it will largely displace/replace existing concept of pluggables, this won’t happen overnight. This article provides some perspective on the transition away from pluggable optics.

Currently the pluggable market remains robust and showing no signs of dropping off. CPO has not progressed beyond being “booth fodder” at trade shows or in test installations within some hyperscale data centers.  Those firms that manufacture and market pluggable modules have little to worry about for now.

Cue the tape forward to end of 2023 or early 2024.  We believe that CPO will be far closer to reality.  There will be a selection of 51.2T switching chips by then and for those that want 800G ports on these switches, CPO products will also be available.  The bulk of CPO demand will come from the hyperscale data centers, which can have tens of thousands of servers.  The big cloud firms – notably Facebook and Microsoft – have committed to the development of next generation optoelectronics for many years; so “politically” they have little option but to adopt their own ideas and deploy CPO.  Right now, this may matter more than the actual advantages of CPO.

The hyperscalers also have the technical staff with sufficient knowledge to take a leap into the dark with a new generation of optoelectronic modules.  Even large corporate data centers don’t typically have the staffing with such competence, and this won’t matter much because 800G pluggables will suffice to meet most needs in the 51.2T era.  In any case most corporate data centers currently have little need for anything other than 100G and 400G modules.

We see CPO products really taking off in 2026 timeframe when the 102.4T switching era emerges and CPO will not only become mature technologically, but ubiquitous for machine-to-machine and interbuilding links in the hyperscale data centers – and in some racks too.  CPO products will also start to become common in corporate data centers.  800G pluggables will still be around but their thermal and power consumption disadvantages will be all too obvious.

So where does it all end? We can be pretty sure that 100G, 400G and 800G pluggables will still be around a decade from now.  Some applications and small data centers will need lower-end pluggables for sure– perhaps for decades.  Nonetheless, we think by the end of this decade when we may be looking at a world of 4T switching and 1.6T interfaces. CPO (or more likely next-generation CPO technology) will reign then supreme.

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