AI Data Centers Hit the 'Copper Wall'! Why Are the Optical Trio All Competing for This CPO Concept Stock? Largan Precision and Yuanzhi Optics' Layout Timing is Here

The explosive demand for generative AI has led to a surge in demand for large language models (LLM), AI servers, and high-speed switches, but it has also caused data centers to face unprecedented transmission limitations. Co-Packaged Optics (CPO) has become a key solution to breaking through AI computational bottlenecks.

While the Market Talks About CPO, the Real 'Technical Profit' is Made by FA and FAU 1. FA (Fiber Array): Aligning optical fibers thinner than hair 'straight and accurately' 2. FAU (Fiber Array Unit): The component with the highest technical barrier and the fattest profit margin

Optical Trio Enters CPO Supply Chain: Progress at a Glance ### Optical Lens Leader 'Largan Precision': Correcting Imperfect V-Grooves with Perfect Processes - Strategy: Initially focusing on FA and PMLA (Multi-Channel Micro Lens Array), supplying FA to avoid lengthy certifications from GPU giants, and developing FAU in the future based on customer needs. - Technological Breakthrough: While the industry's high-precision V-groove yield is low, Largan Precision uses the ultra-precise molds and active focus technology accumulated from smartphone lenses to achieve precision of <0.3 micrometers (μm) by combining imperfect V-grooves and FA with proprietary processes (better than the market's general 0.5~0.8 micrometers). - Latest Progress: Has established an automated Pilot Line and is conducting POC (Proof of Concept) based on customer sample specifications.

### 'Yuanzhi Optics': Focusing on High-Barrier Passive Optical Components - Strategy: Specializing in passive optical components including MT ferrules (Mechanical Transfer Ferrule), collimators, prisms, and V-grooves. - Latest Progress: Most products are in the sample verification stage, some products have started small-scale shipments, and gradual volume production is expected from 2027 to 2028.

### 'Shenzhen Advance Optics': Targeting the High-Margin V-Groove and MT Ferrule Market - Strategy: Focusing on V-Groove and MT Ferrule due to market supply shortages, enjoying high margins as long as yield is stable. Future plans include expanding to prisms and other components. - Latest Progress: Actively expanding FAU customers, aiming for volume production in 2027 if new product verification goes smoothly, with a long-term revenue share target of 30%.

2027-2028 Will See the CPO Supply Chain Explode Overall, CPO has moved from pure concept to the stage of actual sample provision and verification. Although it will still take time to reach large-scale production, with the upgrading of AI data center transmission needs, FA, FAU, V-grooves, and prisms have become the new battleground of the supply chain. Market expectations are that 2027 to 2028 will be the critical turning point for Taiwanese optical manufacturers to achieve revenue growth in the CPO field, with a high chance of becoming a second strong growth curve outside of smartphone lenses.