NPO: Intermediate Solution for Transition from Pluggable Transceivers to CPO

The optical technology market faces a critical choice: traditional pluggable transceivers are gradually giving way to more efficient solutions like co-packaged optics (CPO). However, CPO adoption encounters technical and manufacturing hurdles, including low yield rates and repair complexities. In this context, near-packaged optics (NPO) emerges as an intermediate solution, combining the advantages of both architectures.

NPO involves placing optical modules adjacent to the chip but on a separate substrate, reducing electrical connection lengths and eliminating the need for digital signal processors (DSPs). This cuts power consumption by up to 70% compared to traditional solutions, as claimed by Broadcom. Additionally, modules remain replaceable, simplifying maintenance and reducing failure risks.

Analysts predict NPO will dominate the market through the end of the decade, especially if CPO mass adoption is delayed. SemiAnalysis data suggests large-scale CPO production may not begin until 2027–2029. Meanwhile, Nvidia and Broadcom have already introduced NPO-based products, and a consortium of six companies is working to standardize NPO interfaces.

A key advantage of NPO is the ability to replace optical modules without re-soldering the chip. This is crucial for large data centers, where a single module failure could disable an entire switch. In contrast, CPO repairability is limited, as optical components are soldered to the chip substrate, making replacement nearly impossible without risking damage.

Despite its potential, the NPO market faces challenges, including laser shortages and limited optical module assembly capacities. Nevertheless, experts anticipate NPO and CPO port shipments to reach 100 million annually by 2030, underscoring the technology's significance for future network infrastructures.