Optical-electrical integration and CPO news from overseas and Japan points to continued expansion of volume-production contracts and strengthening supply capabilities. An overview of volume-production developments at Soitec and TSMC, Quintessent’s search for alternative technologies, and efforts to promote domestic standardization.
The week’s key news centered on the expansion of CPO volume-production and supply contracts. Soitec is locking in Photonics-SOI through multi-year contracts that include upfront payments, fixed pricing and minimum purchase volumes, and expects this fiscal year’s revenue to exceed $200 million as a baseline. This has raised concerns that supply constraints for upstream wafer materials could intensify.
TSMC is proceeding as planned toward the start of CPO production in the second half of 2026, and indicated that silicon photonics could account for more than 50% of the optical transceiver market in 2027. Establishing volume-production capabilities is expected to be a decisive factor in the expansion of AI optical infrastructure.
Quintessent announced $40 million in funding and began customer sampling of DWDM comb lasers using GaAs quantum dots. The technology is increasingly being positioned as an alternative that could address the shortage of InP lasers, and is likely to affect future demand trends.
Seven Japanese companies standardized APN design guidelines as ITU-T Y.3335. This will promote common designs for low-latency, low-power networks and provide a foundation for taking IOWN/APN, developed in Japan, to global markets. Opportunities for overseas vendors to enter the market could also expand.
Kulicke & Soffa positioned CPO applications as a key focus area for advanced packaging equipment, using equipment that includes Thermo-Compression Bonding. The trend is accelerating beyond optical components into the manufacturing equipment market, including bonding, inspection and thermal design.