Why everyone is suddenly talking about NPO — and why it matters now
A group of leading industry players announced the launch of a new Near-Package Optics (NPO) MSA initiative, a clear signal that optical interconnect architecture is entering a new phase.
But this raises three key questions:
- What exactly is NPO?
- Why create a new standard now?
- And how does it compare to the much-discussed CPO?
Let’s break it down.
Where NPO fits in the evolution of optics
Three generations of optical architecture, explained simply, before understanding NPO, it helps to look at how optical interconnects have evolved, think of it like smartphone design evolution.
Generation 1: Pluggable Optics
Traditional optical modules sit on the front panel of switches—like detachable components.
- Flexible and replaceable
- But long PCB traces (10–20 cm)
- Higher power consumption and signal loss
Generation 2: CPO (Co-Packaged Optics)
Optical engines are integrated directly next to the switching ASIC—within millimeters.
- Best performance
- Minimal signal loss
- But extremely complex manufacturing
- Thermal mismatch and yield challenges remain unresolved
Generation 3: NPO (Near-Package Optics)
A practical middle ground.
- Optical engines placed 5–10 mm from the chip
- Much shorter electrical path than pluggables
- Avoids the extreme packaging complexity of CPO
In simple terms:
- Pluggable = “in another village”
- CPO = “under the same roof”
- NPO = “on the same street”
Close enough for efficiency, far enough for practicality.
What problem is NPO solving?
AI infrastructure is the real driver.
Modern AI clusters involve thousands of GPUs exchanging data simultaneously, switch bandwidth has already reached 51.2 Tbps and beyond, but the bottleneck is no longer the chip—it’s the distance between chip and optics. NPO addresses this directly:
- Lower latency → shorter electrical paths
- Reduced power consumption → up to ~50% lower transmission loss
- Improved thermal design → better system-level heat management
A quick comparison: Pluggable vs CPO vs NPO
From niche concept to explosive growth
Just two years ago, NPO was mostly discussed in academic and technical circles. Today, it’s becoming a serious commercial track. The reason is simple:
AI infrastructure demand has exploded faster than interconnect technology evolution. Hyperscale data centers now require:
- Higher bandwidth density
- Lower latency
- Better power efficiency
And NPO arrives at exactly the right time—when it’s finally viable to deploy at scale.
Who is driving adoption?
- Hyperscalers
Companies like Amazon, Microsoft, and Google are building massive AI clusters requiring next-gen interconnects.
- Network equipment vendors
Industry leaders such as Cisco, Arista Networks, and Juniper Networks are actively exploring optical integration strategies for future switching platforms, while Ethernexion focuses on translating optical integration concepts into scalable, real-world deployments.
- Chip and platform providers
Companies like NVIDIA, AMD, and Broadcom are pushing system-level architectures that demand tighter optical-electrical integration.
Who benefits in the value chain?
The “hidden winners”: optical component suppliers. While system vendors get the spotlight, upstream suppliers are critical. Key global players include:
- Coherent Corp. – advanced photonic components and modules
- Lumentum – lasers and optical engines
- Marvell Technology – DSPs and optical interconnect solutions
- Intel – silicon photonics integration
These companies provide the core building blocks:
- Optical engines
- Photonic integrated circuits
- Fiber coupling and packaging technologies
High-speed DSPs
In the NPO ecosystem, these suppliers are the “picks and shovels”—they benefit regardless of which system architecture wins.
Why the NPO MSA matters
The formation of an NPO MSA is more than a technical milestone.
It signals that:
- The industry is aligning on interoperability standards
- The ecosystem is preparing for volume deployment
- Optical integration is shifting from experimentation → commercialization
NPO is no longer a concept—it’s becoming infrastructure reality.
Final thoughts
NPO sits at a critical intersection:
- Not as radical as CPO
- Not as limited as pluggables
But exactly where the industry needs it today. As AI continues to scale, the way chips connect to optics will quietly redefine how data centers are built.
And while it may not always make headlines, NPO is already shaping the backbone of next-generation compute.