On August 3, 2026, Gilad Shainer, Senior Vice President of Networking at NVIDIA, officially announced at a technology forum that Co-Packaged Optics (CPO) technology has entered the stage of comprehensive mass production. The new-generation Spectrum-X CPO Ethernet switch, jointly developed by NVIDIA and its supply chain, has been delivered in batches to leading AI infrastructure providers such as CoreWeave, Microsoft Azure, and Nebius. The first product, Q3450-LD, has also been deployed at AI cloud service provider Lambda, and NVIDIA's own Vera Rubin supercomputing cluster has completed internal deployment simultaneously. This news marks the transition of CPO from the laboratory to large-scale commercial use, with 2026 being widely recognized by the industry as the "first year of CPO mass production."
In this profound transformation of the optical interconnect architecture driven by CPO, a previously relatively niche special optical fiber category—Polarization Maintaining Fiber (PMF)—is moving from behind the scenes to the forefront. Huafu Securities explicitly pointed out in its latest research report that PMF is the "core incremental component spawned by the CPO architecture." With the large-scale shipment of NVIDIA's CPO switches, PMF is experiencing explosive growth on the demand side. This article will systematically review this critical material in the AI computing era from four dimensions: the technical advantages and prospects of CPO, the principles and functions of PMF, the global competitive landscape, and the market incremental space.
01. CPO: The Optical Interconnect Architecture Revolution in the AI Computing Era
Bottlenecks of Traditional Pluggable Architecture
In traditional data center switches, the switching ASIC is located in the center of the circuit board, while optical modules are installed on the front panel of the chassis in a pluggable form. The two are connected via PCB traces and Retimers tens of centimeters long. Given the exponential growth in cluster bandwidth requirements for AI large model training, and the evolution of single-channel rates from 112G to 224G and even higher, the transmission loss, crosstalk, and power consumption issues of electrical signals on the PCB have become increasingly prominent. The "power wall" and "bandwidth wall" of the pluggable architecture have become core bottlenecks restricting the horizontal scaling of AI computing clusters.
Core Advantages of CPO
The core concept of CPO is to package the optical engine directly next to the switching ASIC, reducing the electrical signal transmission distance from the centimeter level to the millimeter level. This architectural transformation brings three revolutionary advantages:
First, a significant reduction in power consumption. CPO eliminates the DSP retimer chips in traditional pluggable modules, improving optical power efficiency by up to 5 times. For AI factories with tens of thousands of GPUs, marginal improvements in power consumption translate into massive electricity savings and reduced cooling pressure.
Second, a substantial increase in bandwidth density. Shorter electrical paths allow for SerDes rates of 200Gbps and above without the need for DSPs, achieving a bandwidth density unattainable by pluggable solutions.
Third, enhanced network resilience. According to official NVIDIA data, the network resilience of the CPO-based Spectrum-X is 10 times stronger than traditional solutions, which is critical for AI factories with a million-GPU scale.
Future Prospects of CPO
TrendForce's latest industry report confirms that CPO technology has officially crossed the threshold from 0 to 1 and entered the mass production stage. NVIDIA has explicitly designated 2026 as the first year of CPO commercialization, with leading AI clusters to be deployed in batches in the second half of the year. Broadcom's Bailly CPO switch has also achieved small-batch shipments, and supply chain links such as TSMC's COUPE silicon photonics platform and SPIL advanced packaging are maturing simultaneously. Although challenges such as optical engine yield and thermal management remain, the industry generally expects 2027 to usher in large-scale volume production of CPO. Looking further ahead, CPO will not only be applicable to data center switches but will also spill over into AI accelerators, space laser communications, and space-based computing networks, with profound technology spillover effects.
02. Polarization Maintaining Fiber: The Stabilizing Anchor of the CPO Optical Link
What is Polarization Maintaining Fiber
PMF is a special optical fiber capable of maintaining a stable polarization state during optical signal transmission. In standard single-mode fibers, when subjected to external stress interference such as bending, temperature changes, and mechanical vibrations, random birefringence occurs inside the fiber, causing an uncontrollable drift in the polarization direction of the light. PMF artificially creates an inherent birefringence far greater than external interference by introducing a stress region structure with strong birefringence characteristics near the core. This ensures that the optical signal always transmits along a fixed polarization direction, effectively avoiding the random polarization drift caused by environmental stress.
PMF comes in a wide variety of structural types, including elliptical core, elliptical cladding, PANDA (Panda), Bow-tie, side-pit, and side-tunnel types. Among them, stress-induced PMF has developed the most rapidly due to its stable performance, with PANDA and Bow-tie types being typical representatives. PANDA PMF currently holds an absolute dominant position in commercial PMF products due to its relatively simple manufacturing process and excellent polarization-maintaining performance. Its cross-section is named after the two symmetrically distributed cylindrical stress regions that resemble the eyes of a panda.
The Critical Role of PMF in CPO
In the CPO architecture, the signal transmission distance is significantly shortened, making the optical connection between the silicon photonics engine and the External Laser Source (ELS) the most critical and vulnerable link in the entire system. External lasers typically output high-power continuous-wave laser light, while core components inside the silicon photonics chip, such as waveguides and modulators, are highly sensitive to the polarization state of the input light.
If standard single-mode fiber is used to connect the ELS and the silicon photonics engine, daily temperature changes, mechanical bending, or vibrations will cause "polarization state drift" in the optical signal. Once the polarization direction changes randomly, the coupling efficiency of the silicon photonics chip will significantly drop, leading to increased insertion loss, link instability, or even data transmission errors. Therefore, the CPO architecture must use PMF, which can lock the vibration direction of light, to establish this critical connection, maintaining extremely high transmission efficiency and link reliability.
PMF is a core component in both CPO and NPO (Near-Package Optics), but the usage volume differs significantly. Due to its higher integration level, a single CPO switch requires far more PMF than an NPO, which serves as a transitional solution. Taking NVIDIA's Quantum-X switch as an example, its PMF usage can reach about 144 meters. As the shipment volume of CPO switches climbs, the demand for PMF will exhibit non-linear growth.
Extreme Precision Requirements of CPO for PMF
The high-density packaging characteristics of CPO impose nearly stringent requirements on the geometric precision of PMF. Huafu Securities' research report points out that the latest CPO processes require the bare fiber diameter control precision to be improved to ±0.1μm, and the symmetry of the panda stress region to be controlled within 0.2μm. In contrast, the performance of traditional PMF in diameter fluctuation and stress region symmetry is difficult to meet these extreme indicators. This means that PMF for CPO is not a simple stock replacement but requires a brand-new high-precision manufacturing process, further raising the technical barriers.
Since the price of PMF is much higher than that of standard single-mode fiber, considering the overall cost, the industry generally adopts a compromise solution in actual deployment: among the hundreds or thousands of fiber connectors around the switching ASIC, priority is given to using PMF for core links (especially the input link from the ELS to the silicon photonics engine) to ensure critical data stability, while using lower-cost non-PMF for other non-core output links. This hybrid approach of "PMF for core, non-PMF for non-core" strikes a balance between performance and cost, also providing a reference for the penetration pace of PMF.
03. Global PMF Competitive Landscape: Dominated by Three Giants, Domestic Players Accelerate Breakthroughs
International Manufacturers: Deep Technical Accumulation, Dominating the High-End Market
The global PMF market has long been dominated by international giants. As a pioneer in the global optical fiber industry, Corning (GLW.US) provides a full range of products including single-mode, multi-mode, and special optical fibers, possessing deep technical accumulation and brand advantages in the PMF field. Fujikura (5803.T) is a leading Japanese optical communication company, with products covering single-mode, multi-mode, PMF, erbium-doped fiber, and radiation-resistant fiber. Its PMF holds an important share in the global high-end market. Furukawa Electric (5801.T) produces special optical fibers such as PMF through its OFS brand and possesses vertically integrated cabling system capabilities. Additionally, Denmark's NKT Photonics focuses on photonic crystal fibers and high-power fibers, while France's iXblue (EXA.PA) has distinctive advantages in PMF and photonic crystal fibers.
According to industry statistics, Corning, Fujikura, and YOFC collectively account for about 42% of the global PMF market, forming a competitive landscape dominated by the "three giants." Relying on first-mover advantages and process accumulation, international manufacturers still dominate high-end application scenarios such as CPO. After the May Day holiday in 2026, Corning's PMF business team specially visited China to inspect the capacity configurations of domestic manufacturers such as YOFC, FiberHome, Changyingtong, Hengtong, and ZTT. They concluded that the supply capacity of domestic manufacturers can already meet their needs, indirectly confirming the technological progress of domestic PMF.
Domestic Manufacturers: From Catching Up to Running Alongside, Domestic Substitution is in Full Swing
After more than ten years of technological catch-up, the domestic PMF industry has formed a stable pattern led by the top three in the first tier and differentiated breakthroughs in the second tier. The industry CR3 is about 85%, and domestic substitution is accelerating its penetration from industrial-grade to high-end markets such as CPO and aerospace.
YOFC (601869.SH/06869.HK) is the absolute leader in domestic PMF. It is the only company in China that has achieved formal mass production certification for PMF, ranking first in the domestic market share for five consecutive years (about 28.6%) and third globally behind Corning and Fujikura. YOFC uses the PCVD (Plasma Chemical Vapor Deposition) process to manufacture PMF, featuring precise refractive index distribution, good cross-sectional geometric symmetry, and excellent longitudinal uniformity. Zhuang Dan, the company's chairman, publicly stated that the demand for PMF will explode with a 10-20 times growth in the next 1-2 years. YOFC is simultaneously expanding its dedicated PCVD deposition furnaces for PMF to match the tenfold incremental demand for CPO, and its capacity is expected to increase significantly by 2027.
Raygetec, under FiberHome (600498.SH), independently develops PMF, possessing dual qualifications for military and communication. Its capacity is ramping up, and its products cover the full range of single-mode, multi-mode, PMF, laser fiber, and photonic crystal fiber. Changyingtong (688143.SH) focuses on the special optical fiber field, with products covering PMF, photonic crystal fiber, spun fiber, and laser fiber. After going public, it has completed production line expansion; if it fully produces PMF, its capacity can reach over a hundred thousand fiber-kilometers. The 46th Institute of CETC has deep accumulation in military-grade special optical fibers such as PMF and laser fiber. In addition, optical fiber leaders such as ZTT and Hengtong Optic-Electric are also actively deploying PMF businesses. The industry capacity ranking is roughly: YOFC > ZTT > Changyingtong > FiberHome.
04. Profound Impact of CPO Mass Production on the PMF Market
Demand Side: From Linear Growth to Explosive Transition
Before CPO mass production, the main application scenarios for PMF were concentrated in fiber optic gyroscopes, fiber lasers, and coherent communications, with a relatively limited and steadily growing market scale. The emergence of CPO has completely changed this situation. A single CPO switch can use up to 144 meters of PMF, while a traditional pluggable switch requires almost no PMF. As CPO switches such as NVIDIA's Spectrum-X and Broadcom's Bailly begin mass shipments in the second half of 2026 and scale up in 2027, the demand for PMF will reach an inflection point from linear growth to explosive transition. Zhuang Dan of YOFC's prediction of "10-20 times growth in 1-2 years" is not groundless, but a reasonable deduction based on the per-unit usage and shipment growth rate of CPO switches.
Supply Side: High-Precision Capacity Becomes a Scarce Resource
Along with the explosive demand, the supply side faces bottlenecks in high-precision capacity. PMF for CPO requires a diameter precision of ±0.1μm and a stress region symmetry of within 0.2μm, far exceeding the manufacturing standards of traditional PMF. Currently, only a handful of manufacturers globally can stably mass-produce CPO-grade PMF. International giants like Corning and Fujikura still dominate high-end capacity, and only a few domestic enterprises like YOFC have mass production certification capabilities. This supply-demand mismatch will persist over the next 1-2 years, and manufacturers with high-precision capacity will enjoy significant dividends of both volume and price increases.
Domestic Substitution: From Optional to Mandatory
Against the backdrop of AI computing power becoming a core national strategic competitiveness, the autonomous and controllable nature of the CPO supply chain is increasingly important. As the core material of the CPO optical link, the domestic substitution of PMF has shifted from "optional" to "mandatory." Domestic customers are more inclined to choose local supply to ensure delivery stability and supply chain security. The continuous investment of domestic manufacturers such as YOFC, FiberHome, and Changyingtong in capacity expansion and process upgrading is rapidly narrowing the gap with international giants. As the domestic certification for CPO-grade PMF gradually advances, domestic leading enterprises are expected to achieve a leap from "following" to "running alongside" or even "leading" in this wave of AI optical interconnection.
[Conclusion]
The official mass production of NVIDIA's CPO is not only a milestone event in the optical interconnect architecture but also a historic opportunity for PMF, a special material, to move from behind the scenes to the center of the stage. With its triple advantages in power consumption, bandwidth, and resilience, CPO is reshaping the underlying architecture of AI data centers; while PMF, with its unique ability to lock the polarization state, has become an indispensable core component in the CPO optical link. Amid the interweaving of explosive demand and limited supply, the global PMF market is ushering in a golden window period of simultaneous volume and price increases. For domestic manufacturers, this is both a critical period for technological catch-up and a strategic opportunity for domestic substitution. Whoever can break through the high-precision mass production barriers of CPO-grade PMF first will secure a place in the optical interconnect supply chain of the AI computing era.