Major A-share indices rose across the board on Monday, with the Shanghai Composite Index hitting a decade-high, approaching the 4,000-point mark. The rally was primarily driven by AI tech sectors led by CPO (Co-Packaged Optics) concept stocks. Industry leaders like Xinyisheng (300502) and Zhongji Innolight (300308) reached record highs at market open, significantly boosting market sentiment. Multiple CPO-related stocks, including Jingwang Electronics (603228) and Shengyi Technology (600183), surged by the daily 10% limit or more. This confirms that the current A-share rally remains fueled by AI tech sectors, particularly CPO concepts.

The explosive global demand for AI computing power serves as the fundamental driver behind CPO's rapid development. China's National Data Bureau reports daily token consumption exceeded 30 trillion by June 2025, a 300-fold increase from early 2024. This growth creates massive computing pressure, with optical modules accounting for 30% of power consumption in AI training clusters. CPO technology halves power usage while boosting transmission speeds to 1.6Tbps, making it the preferred choice for tech giants.

CPO's core innovation lies in "photonics-electronics co-integration," combining photonic and electronic integrated circuits on a single substrate. This fundamentally transforms data center operations. Traditional optical modules require complex circuitry with significant energy loss and signal attenuation, while CPO reduces transmission distance to millimeter-scale, cutting power consumption by over 40%.

Nvidia's tests show CPO ports consume just 9W, 70% less than traditional 30W solutions. A 400,000-GPU data center adopting CPO could reduce laser power from 24MW to under 10MW, equivalent to saving multiple small power plants' annual output. Market forecasts predict optical module markets reaching $12.73 billion in 2025 and $19.37 billion in 2026, with 60% and 52% growth respectively.

Global AI clients have reportedly doubled 1.6T optical module procurement forecasts from 10 million to 20 million units. Traditional pluggable solutions face power and thermal challenges at this scale, which CPO effectively resolves. Chinese firms like Zhongji Innolight and Xinyisheng have delivered 1.6T CPO prototypes, while Cambridge Technology (603083) completed pre-research sample testing.

Industry analysts project CPO adoption will begin with 800G/1.6T ports, entering commercialization during 2024-2025. By 2027, global port sales may reach 4.5 million units, with market revenue potentially hitting $2.6 billion by 2033 (46% CAGR from 2022-2033).

China's AI server market is expected to reduce foreign chip procurement from 63% in 2024 to 42% in 2025, with domestic suppliers potentially capturing 40% market share under national chip policy support.

The CPO industry chain involves silicon photonics chips, light sources, and fiber connectors. Silicon photonics enables high-density integration through CMOS-compatible manufacturing. Key advantages include: 1. High integration density through combined photonic/electronic circuits 2. Superior performance with 67GHz+ bandwidth and 50%+ power reduction 3. Cost efficiency from existing semiconductor processes 4. Technological maturity with continuous innovation

Chinese companies are actively participating in CPO development. JuFei Optoelectronics invested early in silicon photonics through its subsidiary's 2018 investment in Sicoya GmbH. Xilian Optoelectronics, established in 2020, acquired Sicoya GmbH in 2021 to strengthen its silicon photonics capabilities.

Recent corporate developments include JuFei's shareholder transferring 7.06% stake to an investor with communications industry background, signaling strategic focus on optical communications. The company has established production lines for 400G/800G optical modules and achieved breakthroughs in advanced packaging technologies.

With AI computing demand continuing to surge, optical module markets are experiencing rapid growth and technological evolution. Leading firms with technological advantages, premium clients, and global production capacity are well-positioned to benefit from ongoing data center construction and upgrades worldwide.