North America Co-Packaged Optics Market Revenue to Attain USD 289.95 Mn by 2033

10 Sep 2025

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Table of Content

1. North America Co-Packaged Optics Market Revenue and Trends 2025 to 2033 2. Key Drivers Enabling the Growth of North America Co-Packaged Optics Market 3. Segment Insights 4. Country Insights 5. North America Co-Packaged Optics Market Coverage

North America Co-Packaged Optics Market Revenue and Trends 2025 to 2033

The North America co-packaged optics market revenue reached USD 34.21 million in 2025 and is predicted to attain around USD 289.95 million by 2033 with a CAGR of 30.80%. The market encompasses co-packaged optics, which is a technology that integrates optical components directly with electronic chips like ASICs or processors in a single package. This integration shortens the electrical pathways, improving data transmission speed, energy efficiency, and overall system reliability compared to traditional pluggable optics.

Key Drivers Enabling the Growth of North America Co-Packaged Optics Market

The North American co-packaged optics market is experiencing significant growth due to several key driving factors. The increasing demand for high-performance computing and Artificial Intelligence applications necessitates co-packaged optics that offer low latency and high bandwidth capabilities. The expansion of mega data centers and the widespread rollout of 5G networks in the region also contribute to market growth by requiring faster and more energy-efficient data transmission. Additionally, ongoing innovations in optical technologies, such as silicon photonics, are bolstered by substantial investments from major tech companies like Intel, Broadcom, and NVIDIA, reinforcing market expansion.

Segment Insights

• By component, the optical engines and transceivers segment dominated the market, primarily due to the need for high-speed data transfer and reduced latency to support cloud computing, 5G, and AI/ML workloads in data centers. 
• By integration type, the true co-packaged optics segment led the market, offering superior energy efficiency and performance by minimizing electrical path lengths, which is essential for the power-intensive workloads found in modern data centers and high-performance computing.
• By photonics platform, silicon photonics holds the largest market share as it is supported by significant investments in research and development, an established semiconductor infrastructure, and the presence of leading tech companies and hyperscalers.
• By data transfer rates, the 400 Gb/s segment accounted for the largest share in this market. This is due to the rapid growth of AI and data-intensive applications, which place optics closer to the ASIC chip, thereby reducing signal loss and power consumption.
• By aggregate bandwidth, the 1.6–6.4 Tb/s segment led the market due to the immense demand for high bandwidth in data centers and AI workloads, providing higher densities and more efficient power consumption than traditional pluggable optics.
• By reach/ interconnect, the intra-rack/intra-chassis segment accounted for the market as it addresses the demand for greater bandwidth and lower latency within hyperscale data centers, driven by AI workloads and digitization.
• By end-use applications, hyperscale data centers dominated the market, as their substantial bandwidth requirements, particularly for AI and high-performance computing, can only be met by the increased density, speed, and energy efficiency offered by these solutions.
• By packaging technology, the flip-chip assembly segment has taken the lead due to its ability to integrate high-performance logic and optical components, enhancing thermal dissipation and improving signal integrity compared to traditional methods.
• By reliability grade, the commercial-grade segment dominated the market, reflecting the high demand for efficient, low-latency data transfer in large-scale data centers throughout the region.
• By business model, the proprietary integrated systems segment accounted for the largest share, driven by the need for highly customized solutions to meet specific requirements within data centers. 
• By distribution channels, the direct OEM/hyperscaler segment leads the market, influenced by the large concentration of hyperscale data centers, leading technology companies, and significant investments in advanced infrastructure.

Country Insights

The U.S. is playing an evolving role in this market, propelled by the substantial infrastructure needs of tech giants in AI and high-performance computing. Major companies like Intel, Broadcom, and NVIDIA are recognized leaders in silicon photonics and advanced packaging. Additionally, government initiatives, such as the CHIPS Act, are providing significant investments that further secure the U.S.'s position in market growth.

North America Co-Packaged Optics Market Coverage

Recent Developments

• In March 2025, Ayar Labs is set to release the Universal Chiplet Interconnect Express™ (UCIe™) optical interconnect chiplet aimed at maximizing AI infrastructure performance and efficiency, while reducing latency and power consumption to alleviate data bottlenecks and integrate seamlessly into customer chip designs. (Source: https://ayarlabs.com)

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