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primarysourced Photonics sector Coherent
COHR
~6 min read · 1,367 words ·updated 2026-04-29 · confidence 89%

Co-packaged optics roadmap

Co-packaged optics (CPO) brings the optical engine inside the switch ASIC package — replacing front-panel pluggable transceivers with photonic engines mounted on the same substrate as the switch silicon. The structural advantages are:

  1. Lower per-bit power — eliminates electrical SerDes drive across the package boundary
  2. Higher aggregate bandwidth density — overcomes the ASIC-edge SerDes I/O bandwidth wall
  3. Lower latency — shorter signal paths
  4. Higher reliability — fewer connector interfaces, but offset by reduced field-replaceability

The architectural tradeoff is field-replaceability: a pluggable transceiver can be swapped without taking the switch out of service; a CPO optical engine generally cannot. NVIDIA’s solution is to separate the laser source from the modulator engine — the laser sits in an External Laser Source (ELS) module that is field-replaceable, while the modulator-and-detector engine is co-packaged with the switch ASIC.

This split architecture is precisely the value-capture entry point for Coherent and Lumentum.

NVIDIA Spectrum-X / Quantum-X Photonics — the CPO design-in

In March 2025 at GTC, NVIDIA announced Spectrum-X Photonics and Quantum-X Photonics — its CPO-based switches for Ethernet and InfiniBand fabrics, designed to scale AI factories to “millions of GPUs” (NVIDIA press release Mar 2025) ✓.

The named external-laser-source supplier base for these switches publicly includes both Coherent and Lumentum (NVIDIA developer blog on CPO collaboration) ✓.

Coherent’s role — CW lasers + silicon-photonics partner

Per public reporting and Coherent’s own positioning, the CPO content scope spans:

ComponentCoherent’s role
High-power InP CW DFB lasersPrimary supplier (paired with Lumentum) ✓
External Laser Source (ELS) modulesCoherent’s own ELS module powered by its CW lasers ✓
Silicon-photonics modulator PICCoherent collaborates on SiPh design with NVIDIA
Optical amplifiers, isolators, coolersComponent supply ✓
Polarization-maintaining lensed-array (PMLA) fiber attachComponent supply ◐
Fiber attach unitsComponent supply ◐

Per industry coverage: “Coherent is NVIDIA’s named collaborator on silicon photonics for the Spectrum-X platform and a major CW (continuous-wave) laser supplier. The company positions itself as a supplier of components for the CPO module rather than the module itself, spanning lasers, amplifiers, isolators, coolers, fiber attach units, and PMLAs” ◐ (TradingKey analysis).

Lumentum’s role — ELS modules and CW lasers (Spectrum-X)

The parallel Lumentum supply position covers CPO-optimized 1311 nm CW laser modules with built-in temperature management, which feed the ELS architecture. Public reporting frames Lumentum as the named ELS supplier on Spectrum-X with Coherent collaborating on silicon photonics ◐ — the precise lane split between the two has not been line-item-disclosed.

The strategic read: NVIDIA has dual-sourced the CW laser supply, splitting between Coherent and Lumentum. Both companies received parallel $2B investments from NVIDIA on March 2, 2026 — see InP EML process for COHR deal terms (common stock) and Lumentum (LITE) for the LITE deal terms (Series A Convertible Preferred + common).

Coherent’s CPO demonstrations at OFC 2026

At OFC 2026 (March 17, 2026, Los Angeles, Booth 1401), Coherent demonstrated multiple CPO configurations (Coherent CPO PR 2026-03-17) ✓:

DemoAggregateArchitectureSource-laser approach
6.4T (32×200G) socketed CPO6.4 Tb/s ✓Silicon-photonics-based modulator/detector engineExternal Laser Source (ELS) module powered by Coherent’s high-power InP CW lasers
Multimode socketed CPO(per-link bandwidth not specified)High-speed VCSEL-basedCoherent’s 200G VCSELs (VCSEL portfolio)
InP modulator on silicon at 400G400 Gb/s/laneHybrid InP-on-Si modulatorCoherent vertically integrated InP + Si

The 6.4T socketed CPO is the canonical NVIDIA Spectrum-X-style architecture — the modulator engine socketed into the switch ASIC substrate, with the ELS module providing CW light over polarization-maintaining fiber.

Coherent’s commercial-volume CPO timing — 2027 onset, 2028 high volume

Coherent management has publicly framed CPO commercial volumes as 2028+ with 2027 onset and meaningful late-2020s volumes (CEO commentary 24/7 Wall St) ✓.

Per industry coverage: “Coherent’s key customers in the AI data center space outlined their order requirements through 2028, driving demand for externally modulated and continuous-wave lasers. Scale-up optical fabrics are expected to begin meaningful deployment from 2027 onward, reaching high volumes by 2028 as supply chains and standards mature.”

Translation to the COHR/LITE thesis: 2026–2027 is dominated by 1.6T / pre-3.2T pluggable-transceiver demand (Datacom transceivers) — the InP source-laser franchise is the load-bearing P&L driver. 2028+ is when CPO transitions to incremental rather than experimental volume, layering a new revenue stream on top of the pluggable-transceiver business.

Vertical-integration differentiation vs Lumentum

The two companies bring different value-capture profiles to CPO:

CapabilityCoherentLumentum
InP CW high-power laser✓ in-house Sherman 6-inch✓ in-house (Greensboro 6-inch retrofit; San Jose 4-inch)
ELS module (laser + thermal + fiber attach)✓ in-house ELS module✓ named ELS supplier on Spectrum-X
Silicon-photonics modulator PIC✓ in-house SiPh + Tower foundry option ✓partial (NeoPhotonics legacy)
Hybrid InP-on-Si modulator✓ research-stagepartial
VCSEL for multimode CPO option✓ in-house Sherman GaAs✓ in-house
CPO transceiver-style module assembly✓ Finisar heritagepartial (Cloud Light)

Coherent’s edge: broader stack ownership across InP source + SiPh modulator + assembly, including the option to ship not just CW lasers but also the SiPh PIC and the engine-level integration. Lumentum’s edge: deeper laser-specific specialization with a sharper component-only narrative (which some hyperscaler customers prefer when they want to control the modulator-engine architecture themselves).

For investors the key implication: both companies benefit from the NVIDIA CPO design-in. Coherent has slightly higher revenue-per-switch capture potential due to the SiPh PIC content; Lumentum has structurally less complex execution risk (fewer concurrent moving parts).

400 mW CW laser sampling — late 2025

A specific CPO-relevant milestone: in late 2025 Coherent began sampling 400 mW CW lasers for CPO and SiPh applications (Coherent commentary in industry coverage) ◐ — with seven different customers evaluating the technology. The 400 mW power class targets fan-out architectures where one laser feeds multiple modulator engines (the predominant CPO source-laser topology — the so-called “bank of lasers” approach).

The sampling-phase customer count (7) suggests Coherent has already secured a pipeline of CPO design wins beyond just NVIDIA — though specific customer identities have not been disclosed.

Risks to the CPO thesis

  1. CPO standards uncertainty — multiple incompatible CPO architectures (NVIDIA-style ELS-separated vs Broadcom-style integrated-source-on-die vs Intel/Ayar Labs optical I/O chiplets); winner-takes-most could materially compress merchant supply share
  2. Pluggable-transceiver reach — 1.6T and 3.2T pluggables may extend further than expected, deferring CPO breakeven beyond 2028 (Datacom transceivers)
  3. In-package laser feasibility — if direct-attached InP-on-CMOS becomes economic, the ELS module / merchant-laser layer is bypassed (this is more a 2030+ risk)
  4. Hyperscaler in-housing — Microsoft, Google, Meta could fund vertically integrated CPO programs that disintermediate merchant suppliers; mitigated by NVIDIA’s $4B in-the-merchant-supply-chain investment

Cross-tenant context

  • Lumentum (LITE) — parallel CPO supplier; received $2B Series A Convertible Preferred from NVIDIA same day as COHR; broader laser-specialist narrative
  • LWLG — electro-optic polymer modulator on silicon-photonic PIC; potential CPO modulator-engine alternative to Coherent’s PN-junction silicon MZM (Silicon photonics)
  • TSEM (Tower Semiconductor) — PH18 SiPh foundry; partners with Coherent on 400G/lane SiPh CPO demonstrations
  • GFS (GlobalFoundries Fotonix) — alternative SiPh foundry tier
  • MRVL — DSP supply into CPO retimers and pre-CPO pluggables

Sources