'Nvidia, Broadcom, Taiwan Semiconductor Manufacturing Co. and Intel, for example, are pushing a next-generation technology known as co-packaged optics (CPOs), in which optical engines are placed closer to the main chips than is possible with external pluggable transceivers, dramatically improving data communication speeds between server racks.

'The order forecast our client gave us till 2028 equals the capacity of some 20 new production lines, but we currently only have three ... The market demand for optical modules is greater than our capability.

'Laser-making, in turn, requires indium phosphide (InP) substrates as a key base material ... China's export controls on indium and other critical raw materials amid trade tensions with the U.S. have further complicated the supply situation.

'Critical suppliers in this field are mainly from the U.S. and China. The latter has built a rather complete supply chain ecosystem for optical transceivers, from materials, fibers, components and parts to modules, though it still relies on American chip developers for the main processor chip.

'Although increasing adoption of CPOs is expected to gradually reduce the use of external pluggable optical transceivers, most industry executives believe the two optical solutions will coexist for a long time due to the costs and difficulty of aftersales maintenance.

'The integration, design, manufacturing, and testing of CPO systems remain highly complex, with no single company able to solve all the challenges alone, making close collaboration across the technology supply chain essential'.

archive.md

(archive.md)