A market for back-end packaging of optical semiconductors is opening up around co-packaged optics (CPO) as the spread of AI data centers (AIDC) drives a surge in data traffic. With optical signals increasingly replacing electrical ones to overcome transmission limits, Korean materials, parts and equipment makers are applying technologies they already own to CPO processes in a push into the new market.
A growing number of Korean materials, parts and equipment companies are entering the CPO components and equipment market, industry sources said on the 29th. CPO integrates an optical engine and a switch chip into a single package, shortening the distance electrical signals must travel. Because the conversion to light happens closer to the chip than in earlier designs, where the optical engine sat farther away, large volumes of data can be moved more efficiently with less power. That is why it is considered a core technology for AI data centers.
The companies are trying to enter the market by transferring know-how built up in their existing businesses to CPO production. HC&G, a materials supplier in the nuclear power and energy sector, drew on its experience in specialty cables and materials for nuclear and industrial use to develop X-BRIDGE, an optical coupler for CPO, expanding into optical semiconductor components. "We have completed domestic patent registration for optical coupling and are now building prototypes," a company official said. "We plan to localize core CPO components and bring them to market quickly."
Inometry, which makes inspection equipment for secondary batteries, is extending the X-ray and CT non-destructive inspection technology it used for batteries to the inspection of CPO optical components. Inometry has signed a memorandum of understanding with LaserSSEL to jointly develop equipment that inspects internal defects in advanced packaging components such as CPO without damaging them. Inometry provides the X-ray and CT non-destructive inspection technology, while LaserSSEL extends the laser bonding technology it used in advanced semiconductor packaging to CPO processes. The two companies plan to upgrade the technology in stages, from early sample inspection to in-line mass production environments.
Orders have also come in. ADS Tech, a subsidiary of Sungho Electronics, won a $16.45 million (about 23.5 billion won) order for CPO active alignment equipment from a U.S.-listed company. Active alignment is a technology that passes light through in real time to find and precisely align the optimal positions of optical components such as optical fibers and lenses. The industry sees the order as confirmation that precision alignment equipment for CPO can be commercialized.
As the CPO market grows, more Korean small and mid-sized materials, parts and equipment firms are expected to enter the optical semiconductor value chain. Market research firm Yole Group projects the global CPO market for data centers will grow from $46 million (about 62.5 billion won) in 2024 to $8.1 billion (about 11 trillion won) in 2030, an average annual growth rate of about 137%. As commercialization widens, demand is expected to rise across back-end processes, from optical components to bonding, inspection and alignment equipment.
"Using optical signals to move data between chips is still an early-stage market, so speed to commercialization is key," said Ahn Ki-hyun, executive director of the Korea Semiconductor Industry Association. "Companies that have accumulated the relevant technology will face initial investment costs, but they can use what they already have to expand into optical semiconductors."
