Co-Packaged Optics (CPO) technology is currently in experimental stages, with initial commercial products tentatively expected around 2028, facing major unresolved engineering hurdles like thermal management and glass substrate via drilling. Once reliably commercialized, CPO demand will surge, limited only by production supply, with packaging forming 50-55% of the Bill of Materials and Lumentum positioned well in optical components.
AI infrastructure will converge on CPO post-2028, shifting significant BOM value to advanced packaging and optical components, creating new bottlenecks for specialized suppliers.