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Morgan Stanley: Testing Emerges as Key Hurdle for CPO Mass Production
Electronic Technology · Semiconductors · economic_daily · 2026-09-03
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Morgan Stanley highlights that testing is the primary bottleneck for Co-Packaged Optics (CPO) mass production, creating significant opportunities for testing equipment providers.
What Happened
CPO Technical Challenges: As AI servers drive demand for high-speed computing, Co-Packaged Optics (CPO) has become a critical technology for data center upgrades. However, transitioning from development to mass production remains difficult, with industry experts identifying testing as the primary bottleneck for achieving high yields and precision.
Increased Testing Complexity: Morgan Stanley notes that testing silicon photonics is significantly more complex than traditional electrical testing, requiring advanced packaging integration and sophisticated data analysis. With optical engines being packaged alongside XPUs and HBMs, the demand for specialized testing equipment is expected to surge over the next five years.
Industry Consensus: There is a broad consensus across the supply chain—from equipment manufacturers to foundries and OSATs—regarding the critical nature of testing. The ability to maintain high yields cost-effectively has become a competitive differentiator, driving long-term demand for advanced testing solutions.
Taiwan Supply Chain Opportunities: Taiwan's optical communications supply chain is well-positioned to benefit from the rising demand for CPO testing and measurement. Companies such as MA-tek, Chroma, All Ring Tech, MPI, WinWay, and Hon-Jin are expected to see significant opportunities as new specifications drive capacity expansion and technological upgrades.