Introduction:
The future of chips isn’t just about shrinking transistors—it’s about how fast they talk to each other. As AI workloads explode and 5G networks go mainstream, the industry is hitting a wall with traditional copper-based interconnects. Enter Co-Packaged Optics (CPO)—a breakthrough solution that eliminates bottlenecks in data transmission by integrating photonics directly into the chip package.
Taiwan’s tech heavyweights—TSMC and MediaTek—are making bold moves to lead this revolution. Backed by years of silicon leadership and deep system integration expertise, they are not just chasing trends—they’re setting them.
Key Takeaways
TSMC’s photonic packaging expertise makes it the global foundry of choice for CPO chips.
MediaTek is building custom optical-electrical chip platforms for hyperscale AI and 5G infrastructure.
Realtek is scaling SerDes to 224Gbps, preparing for enterprise-level CPO demands.
Qualcomm’s $2.4B Alphawave buyout ignites a global SerDes arms race.
Taiwan is building a full-stack CPO ecosystem that spans from SerDes to packaging.
What Is Co-Packaged Optics (CPO) and Why It Matters
In traditional systems, electrical signals travel across circuit boards and copper wires—fast, but not fast enough for modern AI and 5G.
CPO changes the game by embedding lasers, modulators, and photodetectors inside the same package as switching chips. This eliminates signal degradation, reduces power draw, and boosts bandwidth.
To make this work, CPO relies on SerDes (Serializer/Deserializer) circuits. These high-speed interfaces turn wide data into lightning-fast serial streams and back—critical for massive data movement between chips.
Synopsys reports that next-gen SerDes IP supports standards like PCIe, Ethernet, USB, and MIPI—vital for hyperscale data centers and cloud SoCs.
https://www.ansys.com/blog/what-is-co-packaged-optics
MediaTek: Custom CPO for AI and Telcos
As Taiwan’s top IC design firm, MediaTek is at the cutting edge of heterogeneous integration. The company is building bespoke CPO solutions for AI data centers that fuse SerDes and photonics into a single package.
techovedas.com/what-is-heterogeneous-integration-advantages-types-and-technology
Cooling + Materials = Optical Stability
One major hurdle in CPO is heat. High-speed data and light generate thermal stress, which can distort signals. MediaTek is developing advanced cooling systems and materials that ensure temperature stability at terabit speeds.
Roadmap: From 112G to 448G
MediaTek and its affiliate Airoha are on track to scale SerDes performance from 112Gbps to 448Gbps by 2028. Their 112Gbps PAM4 SerDes IP has been validated and will enter mass production in 2026.
This roadmap supports the bandwidth demands of future AI accelerators, telco base stations, and edge compute nodes.
Qualcomm Joins the Race with $2.4B Bet
In June 2025, Qualcomm acquired Alphawave IP for $2.4 billion—a move that signals the growing strategic importance of SerDes technology.
This acquisition provides Qualcomm with best-in-class high-speed SerDes IP and tightens its competitive grip on the AI infrastructure and networking market, directly challenging MediaTek.
techovedas.com/qualcomm-alphawave-the-silent-alliance-that-could-reshape-ai-data-centers
Realtek’s High-Speed Push
Realtek is quietly building 224Gbps PAM4 SerDes cores for cloud switches, enterprise networks, and data-intensive AI systems.
Unlike MediaTek, Realtek doesn’t manufacture photonic devices, so it’s teaming up with third-party optical component makers. This collaboration model enables rapid scaling while keeping R&D lean.
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TSMC: The Silent Backbone of Photonic Manufacturing
TSMC, the world’s top foundry, is enabling the global shift to photonics and CPO with its unmatched 2.5D and 3D advanced packaging capabilities.
Photonic ICs don’t need the latest nodes (like 2nm), but they require ultra-precise waveguide alignment, silicon photonic integration, and novel substrates—areas where TSMC excels.
Precision Matters: Tackling Fiber Alignment
One of the most challenging aspects of CPO is aligning fibers (100 microns) with waveguides (a few microns). According to Commercial Times, TSMC is investing in AI-guided alignment systems to ensure perfect coupling, boosting reliability and yield.
Taiwan’s Full-Stack CPO Ecosystem
Here’s how Taiwan’s semiconductor ecosystem is coming together to lead the optical revolution:
| Segment | Players | Focus Areas |
|---|---|---|
| SerDes IP | MediaTek, Realtek | 112G–448G PAM4 SerDes for AI and 5G |
| Optical Packaging | TSMC, ASE Group | Advanced fiber alignment, thermal management |
| System Integration | MediaTek, Airoha | Heterogeneous integration, full-stack CPO |
| Substrate & Materials | Unimicron, Nanya | High-speed substrates, thermal conductivity |
| Photonic Components | Epistar, WaveFront | Modulators, lasers, photodetectors |
Taiwan is the only country currently offering design-to-manufacture capabilities for SerDes and CPO in one place.
AI, Cloud & 5G: The Markets That Need CPO Now
AI Workloads
From large language models to autonomous vehicles, modern AI requires terabit-level interconnects. CPO slashes the latency between GPUs, CPUs, and AI accelerators.
Cloud Hyperscalers
Data centers from AWS, Azure, and Google Cloud need high-bandwidth, low-power communication between racks. CPO reduces energy use and boosts throughput.
5G + Edge
5G base stations and MEC nodes need compact, fast, and cool interconnects. CPO provides the right mix of performance and efficiency.
What’s Next: The Road to 2030
- 2026: Mass production of 112Gbps SerDes by MediaTek and Airoha
- 2028: First commercial deployment of 448G CPO systems
- 2030: Full adoption of CPO across hyperscale cloud, defense, and telecom networks
Conclusion: Taiwan’s CPO Playbook Is Redefining Chip Innovation
In the post-Moore’s Law era, speed is no longer about smaller transistors—it’s about smarter interconnects.
Thanks to pioneers like TSMC and MediaTek, Taiwan is spearheading a silicon-photonic revolution that will power the next decade of AI, 5G, and cloud computing. Their CPO strategies aren’t just future-proof—they’re future-defining.
If you want to understand where high-performance computing is headed, follow the light—and follow Taiwan.
