Taiwan targets CPO leadership
Taiwan’s Ministry of Economic Affairs is establishing an industry consortium with TSMC and around 30 companies to strengthen the country’s position in silicon photonics and co-packaged optics (CPO), as AI infrastructure drives demand for higher-bandwidth optical interconnects.
The initiative builds on Taiwan’s existing Silicon Photonics Industry Alliance, launched in 2024 with more than 30 companies including TSMC, ASE, MediaTek and Foxconn. The government intends to strengthen collaboration across the supply chain and maintain Taiwan’s position in CPO manufacturing.
CPO integrates optical components alongside compute devices, reducing the distance over which high-speed data must travel electrically. The approach is gaining attention as AI accelerators and data-centre systems increasingly face bandwidth, power and thermal constraints associated with conventional electrical interconnects.
For advanced packaging, the development is significant because CPO requires close integration of photonic, electronic and packaging technologies.
At bandwidths of 1.6T and beyond, packaging processes, optical alignment, thermal management and manufacturing yield become increasingly important to achieving reliable high-volume production.
Taiwan is seeking to leverage its established semiconductor manufacturing and packaging infrastructure. According to the Ministry of Economic Affairs, the country accounts for more than 90% of advanced semiconductor manufacturing at 7nm and below and more than half of global semiconductor packaging and testing capacity.
TSMC is also developing its packaging roadmap around larger-format manufacturing. The company is expected to introduce Chip-on-Panel-on-Substrate (CoPoS), following its CoWoS platform, with commercialisation targeted for 2028.
Equipment and materials validation is expected to precede pilot production. The panel-based approach could increase packaging capacity and integration density and may eventually be combined with silicon-photonics-based optical interconnects.
The push comes as competition in silicon photonics and CPO intensifies. Companies including Nvidia, Intel and Broadcom are investing in optical interconnect technologies as data movement within AI systems becomes an increasingly important constraint.
By bringing together foundry, packaging, photonics and equipment capabilities, Taiwan is seeking to build a more integrated manufacturing ecosystem for CPO. The initiative highlights the growing convergence between advanced packaging and photonic integration as optical interconnects move towards high-volume deployment in AI data centres.
