According to a recent research report, the current bottleneck in AI computing power is progressively shifting towards "connectivity." The market for polarization-maintaining fiber (PMF) is relatively small, with a current estimated market size below $10 billion based on aggregated institutional forecasts, leading to a limited number of companies specializing in its development. Co-packaged optics (CPO) is anticipated to emerge as the next-stage solution and is expected to be a primary driver for expanding network bandwidth growth over the next decade. The report suggests focusing on companies engaged in optical interconnect and polarization-maintaining fiber technologies.

AI Computing Bottleneck Shifting to Connectivity

As AI enters the systems era, connectivity capability is becoming a critical variable determining overall performance. Within co-packaged optical systems, waveguide management plays a pivotal role. The fiber array unit (FAU), responsible for aligning optical fibers with waveguides, becomes even more crucial in CPO applications. Manufacturing FAUs for CPO should consider the use of polarization-maintaining fiber (PMF).

PMF is a type of specialty optical fiber primarily used to maintain the linear polarization state of incident linearly polarized light. Taking the commercially dominant Panda-type PMF as an example, it features two stress-applying parts symmetrically positioned on either side of the fiber core. These parts induce stress on the core, creating a difference in the propagation constants of two polarization modes, resulting in a birefringence effect that stabilizes the polarization state of the light. PMF is already widely used in various technological fields such as optical sensing, lasers, and optical communications, with particularly high demand in fiber optic gyroscopes. However, due to the relatively small existing market size for PMF, there are currently few enterprises focused on its development.

CPO: Co-Packaged Optics Poised as a Key Future Driver

Interconnect options for integrated optical devices include linear pluggable optics (LPO), near-packaged optics (NPO) or on-board optics (OBO), and co-packaged optics (CPO). The core concept of CPO involves directly integrating the optical engine with the switch chip (ASIC) or compute power chip (xPU) within the same package. This eliminates the traditional front-panel interface connecting pluggable optical modules to the motherboard, shortening the electrical signal transmission path from centimeters to millimeters, thereby significantly reducing signal attenuation, power consumption, and latency.

Current industry perspectives suggest that CPO is the optimal solution in terms of performance, but there is currently a lack of an open ecosystem supporting CPO solutions. NPO, as a transitional solution, can rely on the mature pluggable optical module ecosystem while offering significant improvements in bandwidth density and power consumption, making it a practical and cost-effective solution for current large-scale deployments. As pluggable optics gradually approach physical limits and silicon photonics manufacturing processes mature, CPO is expected to progressively become core to ultra-large-scale AI clusters requiring extremely high energy efficiency.

External Light Source Requirement in CPO/NPO Spurs PMF Demand

The CPO interconnect scheme involves optical fibers including single-mode fiber for transmit/receive signal paths and polarization-maintaining fiber for transmitting power from an external laser source. The industry-consensus method for integrating lasers into CPO is using an external light source (ELS). Since the internal optical engines in CPO typically employ silicon photonics, and silicon photonic waveguides are sensitive to the polarization of input light with varying coupling losses for different polarization states, internal fiber connections must use PMF when employing an external light source to ensure the stability of optical signal transmission. NPO also requires the use of PMF, though generally in smaller quantities compared to CPO.

Simultaneously, the high-reliability requirements of CPO place greater demands on PMF. Research indicates that enhancing fiber reliability can be achieved by reducing cladding diameter, using modified surface glass compositions—such as titanium-doped silica—to increase the fatigue constant, or by raising verification testing standards. Products developed through such collaborations have begun shipping.

Key Risk Factors

Potential risks include slower-than-expected iteration of new technologies and products, intensifying market competition, and fluctuations in raw material and product prices.