The report highlights hyperscaler adoption of Optical Circuit Switches (OCS), with Google leading and Amazon/Microsoft exploring, while industry focus shifts to Near-Packaged Optics (NPO) over Co-Packaged Optics (CPO) for near-term deployment ease. Silicon Photonics (SiPho) supply remains constrained, with demand outpacing foundry capacities at GlobalFoundries and Tower Semiconductor, prompting a transition to 6-inch wafers for increased area. Lumentum anticipates significant growth from optical scale-up/scale-out and OCS, expecting $50-100 million in incremental revenue from its NVIDIA partnership for CPO switch platforms in Q4 FY2026.
Hyperscalers are actively deploying advanced optical networking, but silicon photonics supply remains tight, pushing near-term focus to NPO and driving wafer size transitions.