The Zhitong Finance App learned that Huafu Securities released a research report saying that at the level of optical interconnection, CPO is a powerful tool to break through back-end network scale-out costs and power consumption bottlenecks. CPO switches have signal, power consumption, and cost advantages over traditional switches under high-bandwidth connections, while OIO provides solutions for chip-to-chip connections and has the potential to expand applications on a large scale. Therefore, it is possible to focus on investment opportunities in CPO-driven optical devices, optical chip coupling and packaging and testing equipment. It is recommended to focus on companies related to optical modules, optical engines, and technological optical devices.

The main views of Huafu Securities are as follows:

CPO: A powerful tool to break through back-end network scale-out costs and power consumption bottlenecks

CPO refers to the co-packaging of an exchange ASIC chip and a silicon light engine on the same high-speed motherboard to reduce signal attenuation, reduce system power consumption, reduce costs, and achieve a high degree of integration. Looking at Broadcom products, the Bailly CPO can reduce power consumption by 70% compared to traditional pluggable optical solutions at the optical interconnection level, and the Bailly CPO can reduce power consumption by about 30% at the switch level. At the cluster level, for a 32K GPU cluster, CPO can achieve power savings of more than 1MW. Looking at market space, a paper published by Cyriel Minkenberg and others stated that to drive the application of CPO, the price required is significantly lower than that of pluggable optical devices, and it is expected that the average price of optical engines will drop from less than 1.2 US dollars/Gbps in 2021 to less than 0.6 US dollars/Gbps in 2024.

Based on this decline, the bank expects the average price of light engines to reach $0.24 per Gbps in 2028. 650 Group expects 51.2 Tbps switch shipments to grow from 0.077 million units in 2024 to 1.8 million units in 2028. Considering the signal, power consumption, and cost advantages of CPO switches compared to traditional switches under high bandwidth connections, assuming that 1.8 million 51.2t switches were all CPO switches shipped, the corresponding CPO switch light engine market size could reach about 22 billion US dollars in 2028.

Optic IO: Expanding the hyperbandwidth domain vertically to scale up more GPUs

Optic IO is an optical interconnect integrated with a computing chip (such as a CPU, GPU, ASIC, or FPGA) in the same package. Optical I/O provides chip-to-chip connectivity solutions that use optical rather than electric-based I/O in a single IC. The Broadcom solution uses 2.5D multi-chip packaging and silicon as an intermediary layer to Cowos package the optical engines Chiplet and HBM. Each CPO formed is an optical engine with 6.4 Tbps of I/O bandwidth. This solution shows its potential for large-scale expansion. The entire optical link can achieve a transmission distance of 5m-30m, and the scale-up interconnection of 512 GPUs can be completed through 64 high-port density switches.

Focus on investment opportunities in CPO-driven optical devices, optical chip coupling and packaging and testing equipment

In terms of active devices, Tianfu Communications already has a layout suitable for the development of multi-channel high-power lasers using CPO-ELS modules; Zhongji Xuchuang has made significant progress in silicon chip design, development and technical reserves, and has certain technology to develop CPO related products; Guangxun Technology released a self-developed light source module that can support a 3.2T CPO optical engine at OFC in 2023 to pave the way for the subsequent launch of CPO products; Alpine Optoelectronics, a subsidiary of Xinyisheng, also has an NCP4 silicon photonic technology platform independently developed by it.

In terms of passive devices, since CPO uses a multi-channel high-density package, high-density connectors such as FA, MT, or MPO optical arrays are required, and the jumper process requirements for this type of specification are high. Among domestic manufacturers, manufacturers such as Tianfu Communications, Taichenguang, Optical Bank Technology, and Shijia Optoelectronics all have related passive device layouts.

In addition, high-precision coupling equipment is the core equipment for silicon and CPO packaging processes. ficonTec is one of the world's leading manufacturers of optoelectronic automated microassembly testing equipment. The equipment it produces has helped world-renowned optoelectronics manufacturers such as Intel, Cisco, Broadcom, and Nvidia to develop, verify, and mass-produce new technologies such as high-speed silicon optical modules and CPO. On the new process routes for CPO, silicon light, and pan-semiconductors, domestic Liqi Intelligence has the layout of large-scale optoelectronic integration and photonic integration automated placement equipment.

Recommended to follow

Optical module & light engine: Zhongji Xuchuang (300308.SZ), Xinyisheng (300502.SZ), Tianfu Communications (300394.SZ), Guangxun Technology (002281.SZ)

Technological optical devices: Taichen Light (300570.SZ), Optical Bank Technology (300620.SZ), Shijia Photonics (688313.SH)

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