AI Data Center Optical Interconnect Market Seen Reaching $144.4 Billion by 2030

Cloud giants including Google and Microsoft are aggressively expanding their AI data centers, putting the optical transceivers that connect computing infrastructure in the technology spotlight. To overcome bottlenecks in transmission power consumption and heat dissipation, the industry is accelerating adoption of low-power linear pluggable optics and silicon photonics. The shift is creating a major growth opportunity for Taiwan's semiconductor supply chain, which has strengths in wafer fabrication and advanced packaging.

According to the latest report from research firm TrendForce, the global market for AI-dedicated optical transceivers is surging. Its value is projected to climb rapidly from $16.5 billion in 2025 to $26 billion in 2026, representing annual growth of more than 57%. Major manufacturers are accelerating deployments of high-end 800G-and-above modules to meet demand, while Taiwanese suppliers are also moving aggressively to secure positions in the critical supply chain.

As AI training and inference models continue to grow, data centers are shifting toward power-intensive, large-scale GPU clusters. The power consumption and latency involved in moving data have become bottlenecks to AI Factory expansion. Co-packaged optics, or CPO, and near-packaged optics, or NPO, shorten the distance electrical signals must travel, making them critical technologies for cloud service providers seeking greater bandwidth and energy efficiency.

The latest industry estimates suggest the CPO and NPO market could surpass $39 billion by 2030, reflecting optical interconnects’ evolution from data-center networking components into strategic AI infrastructure assets. As AI clusters continue to expand, demand for switches, optical modules and advanced packaging is expected to grow in tandem. Supply-chain competition will increasingly center on mass-production capabilities, power management and system integration.