Guoyuan Securities·2025-06-17 06:13Investment Rating - The report recommends an "Initial Buy" rating for the CPO technology sector [6]. Core Insights - The CPO (Co-Packaged Optics) technology is gaining attention due to its significant performance advantages, which may lead to it becoming the ultimate structure for optical conversion modules in data centers in the long term [3]. - The report highlights the increasing demand for low power consumption and high-speed rates in clusters, which positions higher integration as a more optimal solution [2]. - The report emphasizes that the current scale of the CPO industry is still small, but the long-term penetration potential is vast, especially with domestic suppliers focusing on upstream participation in the CPO supply chain [3]. Summary by Sections 1. Scaling Law and Computational Demand - The scaling law indicates that model performance is significantly enhanced with increased parameters and computational power, leading to a rapid expansion of computational clusters [14]. - Parallel scaling is identified as a key method to balance computational costs and model performance, directly driving the demand for higher interconnect bandwidth within clusters [17]. 2. CPO Technology Advantages - CPO architecture reduces power consumption to 5-10 pJ/bit, compared to traditional pluggable solutions which consume 15-20 pJ/bit, showcasing a significant efficiency improvement [2]. - The report predicts that by 2027, CPO ports will account for nearly 30% of the total ports for 800G and 1.6T, driven by its performance advantages [2][35]. 3. Key Companies in the Industry - The report identifies several key players in the CPO technology space, including Tianfu Communication, Taicheng Light, and Guangku Technology, which are expected to benefit from their strong customer resources and early layouts in CPO technology [3]. - Taicheng Light has shown a compound annual growth rate of 24.49% in revenue from 2020 to 2024, indicating robust growth potential in the optical device sector [71]. 4. Industry Trends and Future Outlook - The report notes that the demand for CPO technology is expected to accelerate as it offers a "better performance, lower cost" alternative, which can quickly penetrate the market once the technology matures [33]. - The integration of optical components directly into switch ASIC packages is highlighted as a breakthrough that significantly enhances bandwidth, power efficiency, and space efficiency [28].