Comprehensive Analysis of CPO Technology Development Prospects and Dekeli's Competitive Advantages

CPO (Co-Packaged Optics) technology is entering an explosive growth period. According to the forecast of authoritative institution Yole Group, the global CPO market size will surge from $46 million in 2024 to $8.1 billion in 2030, with a CAGR of 137%[1]. Another study shows that LightCounting predicts that by 2027, CPO ports will account for nearly 30% of the total number of 800G and 1.6T ports, and the market size is expected to reach $2.6 billion in 2025, exceeding $26 billion in the next decade with a CAGR of 46%[2].

The core advantages of CPO technology are reflected in the following aspects:

: Compared with the 15-20pJ/bit power consumption of traditional pluggable optical modules, CPO system power consumption can be reduced by more than 50% to the range of 5-10pJ/bit. Broadcom’s CPO switch achieves 5.5W/800G, and NVIDIA’s solution reduces power consumption by up to 70%[3]. In large AI clusters, this advantage is more obvious—taking NVL576 as an example, optical interconnection power consumption can drop from 16.2kW to 7.1kW[3].

: CPO improves bandwidth density by an order of magnitude compared to pluggable optical modules, shortening signal transmission distance to the millimeter level and reducing latency by more than 50%[3]. By shortening SERDES distance, CPO achieves more efficient data transmission.

: CPO co-packages the optical engine and switch chip, shortening the signal transmission path, reducing electrical connections and signal conversion, and lowering the possibility of signal degradation and interference[3].

CPO technology is in a critical period of industrialization:

- Multiple research institutions agree that this is the key window for CPO commercial verification in hyperscale data centers[2]. NVIDIA originally planned mass production in Q4 2025 but delayed it due to R&D issues, and it is expected to start supply by the end of Q1 2026, with commercial use possibly postponed to the end of 2026[2].

- LightCounting predicts that CPO will start commercial use in 2024-2025 and enter large-scale volume by 2027[2]. 2026 is called the “CPO First Year”, and NVIDIA’s Spectrum-X and Broadcom’s Tomahawk 6 will take the lead in commercializing 100Tbps-level CPO switches[4].

- Google disclosed that its 2025 data centers will adopt a hybrid scheme of 30% CPO + 70% pluggable[1]. In the next three to five years, the market will likely present a “dual-track system”: pluggable will continue to dominate mainstream deployments, and CPO will gradually penetrate high-end application scenarios[2].

Despite broad prospects, CPO technology still faces three core challenges:

- CPO involves precise coupling of multiple physical fields including optics, electricity, heat, and force, relying on 2.5D/3D packaging processes. Insufficient yield is the biggest obstacle to mass production; once a chip fails, the entire board is almost scrapped[2].

- CPO does not support hot swapping; once the optical engine or electrical chip fails, the system needs to be offline entirely or the entire board replaced, resulting in high operation and maintenance costs[2].

- Although organizations like OIF are promoting standardization, the industry has not yet formed unified specifications, leading to poor compatibility and high fragmentation risks[2].

Dekeli (688205) is a leading domestic optical communication equipment manufacturer, with布局 in three business areas: transmission, access, and data. According to the latest data, Dekeli’s revenue structure is 86.61% from transmission business, 12.18% from access and data business, and 1.21% from other businesses; domestic business accounts for 85.79%[5].

- Dekeli has formed scale advantages in the 800G/1.6T generation and is gradually introducing CPO optical engines and related processes[2]. The company’s technical accumulation in high-speed optical modules lays the foundation for its transformation to CPO.

- As an important member of the module/packaging industry cluster, Dekeli forms a synergy effect with Zhongji Innolight, Eoptolink, Cambridge Technology, Accelink Technologies, etc. in the CPO industrial chain[2]. This cluster advantage helps to jointly break through technical bottlenecks.

- With years of deep cultivation in the optical communication field, Dekeli has established stable customer relationships and market channels, which provides strong support for the promotion of its CPO products.

According to brokerage research report data, Dekeli’s predicted earnings per share in 2025 is 0.83 yuan, corresponding to a price-earnings ratio of about 61.7 times; the predicted earnings per share in 2026 is 1.45 yuan, corresponding to a price-earnings ratio of about 35.2 times[5]. The company’s valuation level is relatively high, reflecting the market’s expectations for its development potential in the CPO field.

Currently, CPO concept stocks are mainly concentrated in domestic optical communication leading enterprises:

- As the global optical module leader with a market share of over 40%, it is deeply bound to leading customers such as NVIDIA and Microsoft. The current stock price is 570.86 yuan, with a price-earnings ratio of 74.92 times[0]. The company is technologically leading in the CPO field, with 1.6T CPO module power consumption as low as 12W and yield rate of 95%[1].

- An important manufacturer in the optical module field, the current stock price is 426.00 yuan, with a price-earnings ratio of 56.20 times[0]. The company has strong technical strength in high-speed optical modules and is also actively deploying in the CPO field.

- A traditional optical communication device leader, the current stock price is 64.84 yuan, with a price-earnings ratio of 55.42 times[0]. The company has deep accumulation in the optical device field and is transforming to the CPO field.

- CPO concept stocks generally enjoy high valuation premiums, mainly based on the following factors:

• Market expectations for explosive growth of CPO technology (137% CAGR)
• Industry prosperity driven by continuous攀升 of AI computing power demand
• The status improvement of domestic enterprises in the global optical communication industrial chain

- Risks to pay attention to include:

• CPO technology commercialization progress may be lower than expected
• Valuation has fully or even excessively reflected future growth expectations
• Traditional pluggable optical modules will still dominate in a certain period

- Given that CPO technology is still in the early stage of industrialization, it is recommended to adopt a “core + satellite” strategy:

• Core allocation: Leading enterprises with strong technical strength and high-quality customer resources
• Satellite allocation: Small-cap companies with technical characteristics in segmented links

As the core solution for next-generation optical interconnection, CPO technology has a very clear long-term development prospect. The exponential growth of AI computing power demand provides a strong market driving force for CPO technology. Although it faces technical challenges and uncertainty in commercialization progress in the short term, the expectation of entering the large-scale growth stage in 2026-2027 is relatively certain.

- Focus on the CPO technology verification and commercialization progress in 2025-2026, especially the product mass production schedules of giants like NVIDIA and Broadcom.

- Focus on enterprises with technical advantages in key links of the CPO industrial chain, including optical engines, silicon photonics chips, packaging testing, etc.

- CPO technology is expected to become the ultimate structure of data center photoelectric conversion modules, with long-term investment value.

• Technical Risk
  : Insufficient maturity of CPO technology, challenges in mass production yield and cost control
• Market Risk
  : Traditional pluggable optical modules will still maintain a dominant position in a certain period
• Valuation Risk
  : Current concept stocks generally have high valuations, with callback pressure
• Policy Risk
  : Changes in external environments such as Sino-US trade frictions may affect industrial chain development

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[1] Yole Group - “Co-Packaged Optics for Data Centers 2025 Report” (https://www.yolegroup.com/product/report/co-packaged-optics-2025/)

[2] Yifei Research Institute - “2025 Co-Packaged Optics (CPO) Technology Will Reshape Optical Network Interconnection Pattern” (https://www.sjxmicro.com/sys-nd/104.html)

[3] Guoyuan Securities - “Optoelectronic Synergy, Computing Power Innovation” Research Report (https://pdf.dfcfw.com/pdf/H3_AP202506171692525600_1.pdf)

[4] Supplyframe - “AI and Capital Dual-Driven, What Are the Challenges of CPO?” (https://cn.supplyframe.com/article/9581.html)

[5] Guosen Securities - “Communication Industry 2025 April Investment Strategy” (https://pdf.dfcfw.com/pdf/H3_AP202504131655897198_1.pdf)

[0] Jinling API Data - Real-Time Stock Quote Data