Research|Commentary on Recent Discussion on CPO/800V HVDC Delay
CPO - Concerns Likely Overblown; NPO Acceleration a Key Highlight
There were several bearish views in the market recently on CPO and the broader optics supply chain. We believe concerns around the CPO timeline are somewhat overdone. As an important evolution path for next-generation AI scale-out networks, CPO will naturally require customer validation, system integration, reliability testing, and supply chain ramp-up. But that does not mean the project itself is experiencing a material delay. In fact, Jensen already stated very clearly at Computex that CPO will ramp on schedule. Based on what we are hearing from the supply chain, scale-out CPO remains broadly on track, with no evidence of weakening demand or any change in customer attitude.
From what we understand, scale-out CPO deployments for NCP customers, including CoreWeave and Lambda, as well as Oracle and one major CSP, are progressing toward mass production as planned. Supply-chain feedback has also been quite positive. The current focus is more on capacity preparation, yield ramp, customer qualification, and system-level integration than on project cancellation or a meaningful pushout. Therefore, we do not think the pace of the CPO ramp should be interpreted as an inflection point for optics demand.
More importantly, the investment thesis for optics does not depend solely on the CPO path. As we discussed in our previous NPO update, the doubling of bandwidth requirements on the scale-up side is actually a very strong tailwind for optics. Whether the final architecture is CPO, NPO, or a coexistence of CPO and NPO, the key point is that AI clusters will continue to rely more heavily on optical interconnects both inside and outside the cluster. System architecture is evolving toward higher bandwidth density, lower power consumption, shorter reach, and higher levels of integration. This is structurally positive for the entire optics supply chain.
