Recently, I’ve been researching a very interesting investment direction—CPO and silicon photonics. Honestly, these two concepts are a bit complex when you first encounter them, but after深入了解, I realize this could be one of the most promising tech tracks in the next 5 to 10 years.

First, let’s talk about why these things are gaining popularity. AI computing power is exploding, and traditional copper wire transmission methods are hitting bottlenecks—too hot, too slow, too energy-consuming. CPO and silicon photonics were born to solve this problem, with a simple core idea: replacing “electricity” with “light” to transmit data. It sounds sci-fi, but the technology is gradually moving toward commercial use.

Silicon photonics technology involves shrinking the originally bulky optical components—lasers, detectors, modulators—all down to chip scale, integrated on silicon substrates. Meanwhile, CPO (Co-Packaged Optics) involves removing the outer shell of optical modules and placing them next to CPUs/GPUs, packaged on the same board. What are the benefits of this? Energy efficiency improves by over 30%, which is a huge incentive for data centers.

By mid-2026, I’ve noticed this field has moved from laboratory experiments to large-scale mass production. Taiwan’s semiconductor supply chain has a clear advantage here—from wafer foundries to packaging and testing, optical communication components—an integrated capability unmatched globally.

In the US stock market, Broadcom has already become a leader in CPO concept stocks. Their Tomahawk series has become the standard for AI data centers. Marvell also holds an important position in optical-electrical conversion chips, and NVIDIA announced deep cooperation with them, investing billions of dollars to integrate optical interconnects. Credo recently acquired DustPhotonics, gaining photonic integrated circuit technology, with its stock soaring over 40% within three days of the announcement. Lumentum and Coherent, as optical component giants, are also accelerating their shift toward silicon photonics solutions.

There are also many CPO concept stocks in Taiwan stocks. TSMC is not just a foundry; they are defining CPO packaging standards. Their COUPE platform is central to the entire industry. Advanced packaging leaders like ASE-KY and Sun Moon Light Control lead in high-speed transmission modules, with real technical accumulation. Advanced Optoelectronic and TSMC collaborate on developing fiber array connection technology, which is a very critical “interface.” Lianya provides the laser light sources needed for CPO cores, being a top upstream player. BoroWai has mastered passive optical component technology and has entered NVIDIA’s supply chain. Pan Quan’s optical path positioning and inspection technology are crucial for yield improvement.

However, investing in these CPO concept stocks requires caution. First, look at yield rates, because CPO involves packaging optical components and chips together; any component failure could lead to the entire expensive chip being scrapped. When reviewing financial reports, pay special attention to gross profit margin trends—if revenue increases but gross margin declines, it may indicate yield struggles.

Second, watch out for specification wars. There’s also LPO technology, an enhanced version of traditional pluggable modules, which is cheaper and easier to maintain. Before 1.6T transmission rates become widespread, LPO could take a significant market share.

Third, pay attention to actual corporate revenue. Some companies claim to be silicon photonics concept stocks, but their optical communication-related revenue share is very low—these might just be riding the wave. Truly worth noting are those companies that have already been certified by major manufacturers and have a clear increase in optical communication revenue.

Finally, don’t forget geopolitical factors. The US broadband infrastructure plan will influence optical communication demand, and US-China tech conflicts could easily disrupt this cutting-edge field.

To sum up the investment approach: in US stocks, focus on “standard setting,” while in Taiwan stocks, look at “supply chain performance.” US giants control design and agreements, while Taiwanese firms handle foundry and integration. While chasing new themes, it’s essential to return to fundamentals—prioritize companies that have already been certified by major players and have substantial orders. Only then can you avoid noise in this fast-paced track and seize truly valuable investment opportunities.