TechInsights: The Second Half of 2026 Marks a Critical Turning Point for CPO Commercialization

2026/07/21

CTIMES
July 21, 2026

Author: Guan-Ming Lan

Market research firm TechInsights recently released its 2026 Global Advanced Packaging Outlook Report. The report identifies the second half of 2026 as a critical period for co-packaged optics (CPO) to enter mainstream commercialization.

According to TechInsights, conventional copper interconnects are reaching their physical limits in terms of heat generation and signal attenuation when handling high-speed AI network traffic at 1.6T and beyond. CPO technology adopts an advanced hardware-software co-design approach, integrating optical engines, high-performance computing chips, and high-bandwidth memory (HBM4) onto a single substrate. By using photons instead of electrons for high-bandwidth interconnections, this technology can significantly reduce the power consumed by underlying switch communications.

According to the latest data released by WSTS and SEMI on Tuesday, global semiconductor foundries and design service providers are rapidly expanding capacity as TSMC integrates its COUPE (Compact Universal Photonic Engine) technology into its CoWoS advanced packaging roadmap. The research highlights that global advanced packaging output reached a record high in the third quarter of 2026. Chiplet integration driven by wafer-level bonding and hybrid bonding is expected to represent the highest-value segment of the market.

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