Rumor
NVIDIA and MediaTek accelerate silicon photonics and CPO supply chain investments
Monday, March 2, 2026 at 01:09 PM
NVIDIA has reportedly committed $2 billion each to optical communication leaders Lumentum and Coherent to secure high-end laser and optical networking production capacity. This investment includes long-term procurement agreements and priority access to future output. Simultaneously, MediaTek is expanding its involvement in silicon photonics through an investment in Ayar Labs. These moves accelerate the industry shift toward Co-Packaged Optics (CPO) as AI data centers reach the transmission limits of traditional copper interconnects.
Context
NVIDIA is accelerating the transition to Co-Packaged Optics (CPO) by reportedly investing $2 billion each into optical leaders Lumentum and Coherent. This capital secures "priority access" to essential laser components and expands U.S. manufacturing capacity. Simultaneously, MediaTek has increased its stake in the sector via silicon photonics specialist Ayar Labs. These investments address a critical "interconnect bottleneck," where traditional copper wiring can no longer meet the bandwidth and power efficiency demands of massive AI clusters.
This strategic move intensifies the competition between NVIDIA and Broadcom for leadership in next-generation data center architecture. By securing long-term supply commitments, these tech giants are signaling that the shift to fiber-optics is happening faster than previously forecasted. This trend provides immediate momentum for the broader supply chain, specifically benefiting compound semiconductor foundries and wafer manufacturers in Taiwan that are integral to the CPO ecosystem.
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