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Rhea-AI Summary

ASE has unveiled a groundbreaking co-packaged optics (CPO) device that directly mounts optical engines onto a substrate, achieving <5pJ/bit power consumption and significant bandwidth improvements. This innovation addresses critical data center challenges amid surging AI demands. The CPO technology demonstrates substantial efficiency gains compared to current solutions, reducing power consumption from 30pJ/bit (faceplate-pluggable) and 20pJ/bit (on-board) to less than 5pJ/bit. According to IDC, AI silicon in data centers will see 24.9% CAGR from 2024-2028. The technology enables shorter electrical paths, lower insertion loss, and improved power efficiency in packages >75mm X 75mm. McKinsey projects data center capacity demand to grow at 27% CAGR from 2023-2030, reaching 298 GigaWatts, up from current 60 GW.

Insights

Semiconductor Industry Analyst

ASE's new co-packaged optics technology delivers dramatic power efficiency gains for data centers, positioning them well in the AI-driven semiconductor market.

ASE has achieved a significant technological breakthrough with their new co-packaged optics (CPO) device that mounts optical engines directly onto substrates. The innovation delivers power consumption below 5pJ/bit, representing a dramatic improvement over current faceplate-pluggable solutions (30pJ/bit) and on-board options (20pJ/bit).

This advancement addresses critical bottlenecks in data center infrastructure at precisely the right moment. With IDC projecting 24.9% CAGR for AI silicon in data centers from 2024-2028, and McKinsey forecasting data center capacity demand growing at 27% CAGR to reach 298 GW by 2030, power efficiency has become a paramount concern.

The technical achievement is particularly noteworthy as it solves complex assembly challenges for multiple optical engines with ASICs in large integrated packages exceeding 75mm × 75mm. This enables shorter electrical paths, lower insertion loss, and superior power efficiency while maintaining structural integrity for both edge and surface fiber coupling.

ASE's CPO technology offers compelling advantages across multiple dimensions:

• Enables bandwidth expansion critical for AI workloads
• Reduces latency in data center operations
• Improves scalability compared to current optical solutions
• Potentially replaces pluggable optics at 1.6Tb/s or 3.2Tb/s speeds
• Provides integration options for CPUs, GPUs and other processors

Part of ASE's VIPack™ platform, this development represents an interim step in their progression toward fully integrated 3D CPO. By addressing the data center sector's urgent power constraints with next-generation packaging technology, ASE is positioning itself advantageously in the semiconductor ecosystem as AI deployments accelerate power consumption concerns.

SUNNYVALE, Calif.--(BUSINESS WIRE)--

Advanced Semiconductor Engineering, Inc. (ASE), a member of ASE Technology Holding Co., Ltd. (NYSE: ASX, TAIEX: 3711), today announced that it has demonstrated a co-packaged optics (CPO) device that mounts multiple optical engines (OE) directly onto a substrate, enabling <5pJ/bit power consumption and significant bandwidth increases. With today’s processing power requirements being extremely amplified by AI pervasion, there is unprecedented demand for bandwidth that must be addressed. ASE’s new configuration enables crucial on-package energy efficiency and bandwidth expansion while addressing further data center challenges by delivering improvement related to latency, data throughput, and scalability.

According to IDC (Jan 2025), the proliferation of AI silicon in the data center will experience 24.9% CAGR from 2024 to 2028 in support of capacity demand and infrastructure growth, hence elevating the need for new energy efficiencies. Advanced packaging creativity is bringing the OE directly into the switch silicon package to generate the shortest possible electrical traces resulting in consequential power savings. ASE’s configuration results in shorter electrical path and lower insertion loss, as well as improved power efficiency. The CPO structure is a key interim step in ASE’s progression from pluggable options to optical IO and fully integrated 3D CPO. A major milestone for ASE has been the development of the CPO assembly process flow, which includes substrate warpage and coplanarity control to meet fiber array coupling requirements, and structure and warpage synergy for both edge (horizontal) and surface (vertical) fiber coupling. All these areas are critical to ensuring optimized data throughput while minimizing optical related losses.

As bandwidth demands grow exponentially, the current faceplate-pluggable (FPP) solutions show roadmap limitations in density, power, and cost. The increasing switch speeds also lead to an increase in SerDes interconnect power as a percentage of the total switch power. This is driving the need to move the optics from the FPP into the enclosure closer to the switch ASIC. On-board optics have been adopted as a first step, and ASE’s CPO provides an attractive option that has lower insertion loss, resulting in reduced power consumption and cost/bit. From a pJ/bit comparison, FPP solutions are currently 30pJ/bit, while on-board solutions are 20pJ/bit, but now scaling <5pJ/bit through CPO.

ASE’s CPO solves the assembly challenge of multiple optical engines with an ASIC in an integrated package with a large body configuration of >75mm X 75mm. The benefits for both the networking and data center markets are significant. For networking, it provides a potential option to improve or replace pluggable optics at 1.6Tb/s or 3.2 Tb/s, as well as an integration solution that enables ultra-low latency option for CPO. For compute, the platform can be used to integrate the CPUs, GPUs, XPUs with the optics into a single co-packaged solution through high-speed optical data links.

“Global demand for data center capacity could rise at 27% CAGR from 2023 to 2030 to reach an annual demand of 298 GigaWatts (GW), according to 2025 report from McKinsey. Such tremendous growth represents a sharp increase from the current demand of 60 GW and signals a potential supply gap. This is why ASE is committed to bring power efficiencies to the data center though our CPO innovation,” said Dr. CP Hung, Vice President of Research & Development, ASE. “It’s well documented that the main driving force for CPO technology is its ability to lower energy consumption and deliver economic advantage. Our CPO places the optical engine very close to the ASIC chip, meaning link loss is reduced and there is no need for a re-timer chip to compensate for the signal between the two. This leads to significant reduction of its energy consumption, and a big improvement in the overall bandwidth density of the system.”

“Our industry has moved beyond classical compute into the high-performance compute era where data center demands are being highly influenced by advanced AI models and applications, power consumption, and ongoing cloud and edge compute dynamics,” added Yin Chang, Executive Vice President, ASE. “These present massive challenges, particularly related to power and cooling limitations, and require our industry to deliver breakthrough innovations that facilitate application and scale. At ASE, we are committed to taking silicon photonics to a new level and augmenting our customer value through delivering CPO technology that demonstrates superior energy efficiency at this critical juncture in AI permeation.”

ASE’s CPO is part of VIPack™, which is a scalable platform expanding in alignment with industry roadmaps, and supported by its Integrated Design Ecosystem™ (IDE), a collaborative design toolset optimized to systematically boost advanced package architecture.

ASE will be represented at the Optical Fiber Conference 2025 in San Francisco  this week  by Dr. CP Hung, VP of R&D, who will deliver a presentation titled, ‘Latest Advanced Packaging Solutions for AI’, scheduled for Thursday, April 3^rd 15:15 - 15:45 in the Packaging and Coupling Techniques session.

Supporting resources

• For more, please visit: https://ase.aseglobal.com/silicon-photonics/
• Follow us on our LinkedIn page for targeted updates and announcements: @aseglobal
• Follow us on X: @aseglobal

About ASE, Inc.

ASE, Inc. is the leading global provider of semiconductor manufacturing services in assembly and test. Alongside a broad portfolio of established assembly and test technologies, ASE is also delivering innovative VIPack™, advanced packaging, and system-in-package solutions to meet growth momentum across a broad range of end markets, including AI, Automotive, 5G, High-Performance Computing, and more. To learn about our advances in SiP, Fanout, MEMS & Sensor, Flip Chip, and 2.5D, 3D & TSV technologies, all ultimately geared towards applications to improve lifestyle and efficiency, please visit: aseglobal.com or follow us on LinkedIn & X: @aseglobal.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250401366335/en/

Media Contacts:

North America & Europe: Patricia MacLeod +1.408.314.9740 patricia.macleod@aseus.com

Asia Pacific: Jennifer Yuen +65 97501975 jennifer.yuen@aseus.com

Source: Advanced Semiconductor Engineering, Inc.

FAQ

What is ASE's new co-packaged optics (CPO) technology and how does it improve power efficiency?

ASE's CPO technology mounts optical engines directly onto a substrate, reducing power consumption to <5pJ/bit compared to current solutions (30pJ/bit for FPP, 20pJ/bit for on-board). It achieves this through shorter electrical paths and lower insertion loss.

What market growth potential exists for ASE's (NYSE: ASX) CPO technology in data centers?

According to McKinsey, global data center capacity demand is projected to grow at 27% CAGR from 2023-2030, reaching 298 GigaWatts from current 60 GW, while AI silicon in data centers will see 24.9% CAGR from 2024-2028.

What are the key benefits of ASE's CPO technology for networking and data centers?

The technology improves or replaces pluggable optics at 1.6Tb/s or 3.2 Tb/s, enables ultra-low latency, and allows integration of CPUs, GPUs, and XPUs with optics into a single co-packaged solution through high-speed optical data links.

What technical specifications does ASE's new CPO device support?

The CPO device supports large body configurations of >75mm X 75mm, features substrate warpage and coplanarity control for fiber array coupling, and enables both edge (horizontal) and surface (vertical) fiber coupling.