Hongyang Begins Shipping CPO Photonic-Electronic Co-Test Equipment in October, Driving Growth in 2024

Hongyang (7769-TW) is actively capturing business opportunities in co-packaged optics (CPO). The company announced that it has completed technical validation of the Insertion 4 OE photonic-electronic co-test equipment developed in collaboration with a major U.S. customer. Shipments are scheduled to begin in October 2023. If customers enter full-scale mass production, the company could deliver 20 to 30 units per month, positioning CPO-related equipment as a major growth engine in 2024.

According to Hongyang, the optical alignment mechanism, insertion loss verification, and installation of optical measurement instruments for the Insertion 4 OE equipment have been completed. The scope of work has also been confirmed with the customer. Going forward, the equipment will be sequentially shipped to laboratories in Israel, Taiwan, and the United States to support engineering validation and pre-mass production preparations with customers.

Compared to traditional semiconductor test equipment, CPO photonic-electronic co-test systems are significantly more complex. In addition to integrating automated handlers and advanced temperature control systems, they must incorporate optical alignment mechanisms, optical measurement instruments, and ATE test equipment to perform simultaneous electrical and optical testing—resulting in notably higher unit prices.

Hongyang completed the setup of its dedicated CPO laboratory in Q2 2023. Since optical components are highly sensitive to particles and environmental cleanliness, the company invested considerable time in building a high-cleanliness testing environment. It plans to establish at least two laboratories to support different customers and various ATE test platforms.

In addition to Insertion 4 OE, Hongyang continues collaborating with major ATE equipment providers to advance Insertion 3 and Insertion 4 projects. Among these, the Insertion 4 OE mass production equipment design and shipment schedule are the most clearly defined, while other projects will progress according to end customers’ product development timelines.

Hongyang is also partnering with a major U.S. networking customer and leading ATE manufacturers to develop additional CPO test solutions. With the rapid rise in bandwidth demands from AI data centers, traditional electrical interconnects are increasingly facing bottlenecks in transmission distance, power consumption, and heat dissipation. As a result, CPO adoption is accelerating, driving up demand for photonic-electronic co-test equipment.

Beyond CPO, Hongyang is continuously developing large-package, high-power, and advanced thermal control equipment in response to increasing AI chip package sizes and power consumption. While current mainstream equipment offers thermal control capabilities of around 3kW, the company has raised its development target for 2027–2028 to 10kW. This technology can be applied to testing CPO, CPU, GPU, TPU, and ASIC devices.

Hongyang notes that next-generation CPO and high-end AI chip equipment not only increases the number of machines but also enhances the value of optical, thermal, automation, and key components per unit. The average selling price of new-specification equipment is expected to increase by at least 20%, with some models combining large packages and automation systems seeing price hikes of 20% to 25%.

Currently, Hongyang’s production capacity through the end of 2023 is extremely tight, with some customer demand pushed into Q1 2024. To address this, the company plans to increase its production capacity by 50% by 2027. With CPO equipment shipments starting in October and anticipated expansion of customer mass production volumes, CPO is expected to join large-package, 10kW thermal control, and next-generation CPU and TPU equipment as Hongyang’s primary growth drivers in 2024.