Co-packaged optics (CPO) could change the game for data centers, but it’s hitting some real stumbling blocks as it moves toward commercialization—especially for Japanese telecom giant NTT. Still, NTT’s betting on a partnership with state-backed semiconductor startup Rapidus to tackle manufacturing headaches and carve out a spot in the AI-driven future of computing.
This post dives into where CPO tech stands, what NTT wants, and how its link-up with Rapidus fits into Japan’s bigger tech ambitions.
What is Co-Packaged Optics and Why is it Important?
Co-packaged optics, or CPO, puts optical and electronic parts together in one package. This setup helps with bandwidth density, energy use, and scalability.
With data centers straining under loads from AI and machine learning, CPO looks like a way to cut energy use and latency. Those are headaches everyone in the industry wants to solve.
The 2025 Milestone and Industry Implications
CPO tech is set to hit commercial markets in 2025. That’s when the real shift in data center operations could start.
By moving optical connections closer to computing units, CPO sidesteps the bottlenecks that older systems just can’t handle. For big names like NTT, nailing this tech isn’t just about staying in the game—it’s about shaping the next wave of AI infrastructure.
NTT’s Challenges in Scaling Co-Packaged Optics
Rolling out CPO at scale is no small feat, and NTT knows it. The company’s struggling to move past prototypes because blending photonics with semiconductors is incredibly complex.
Material issues, sky-high costs, and the need for ultra-precise manufacturing all stack up. It’s a tricky mix of technical and logistical problems.
Collaboration with Rapidus: A Lifeline for NTT?
NTT’s turning to Rapidus, a state-backed chipmaker that’s been making waves with its ambitious plans. Rapidus kicked off test production of next-gen semiconductors in 2025 and aims for mass production by 2027.
By tapping into Rapidus’ growing know-how and facilities, NTT hopes to finally bring its CPO tech to market.
The Strategic Role of Rapidus and Government Backing
Rapidus isn’t just any partner. It’s key to Japan’s push to revive its semiconductor industry, which has lagged behind giants like Taiwan and South Korea.
The Japanese government is backing Rapidus in a big way, setting aside ¥100 billion (about $635 million) for it in the 2025 budget.
Japan’s Broader Technological Ambition
This partnership is about more than CPO. It’s part of a larger effort to put Japan back on the map as a tech innovator, especially in semiconductors.
With AI shaking things up, Japan’s pulling together public and private players to stay in the race.
Why NTT and Rapidus Matter for the Future of AI
We’re standing at the edge of a new era in computing, thanks to breakthroughs in AI, quantum tech, and high-speed networking. Data efficiency and scalability are more urgent than ever, so solutions like co-packaged optics are grabbing attention.
If NTT and Rapidus pull this off, Japan could step into a leadership role, making AI workloads more efficient and cutting the energy drain of massive data centers.
Potential Outcomes of the Partnership
It’s not without risks, but if the NTT-Rapidus team gets it right, we could see:
- Faster adoption of co-packaged optics in data centers worldwide
- A new model for public-private partnerships in advanced tech
- Japan making a comeback in semiconductor innovation
- Better energy efficiency and scalability for AI-heavy computing
Conclusion: A Collaborative Step toward the Future
NTT faces real challenges in mass-producing co-packaged optics. That’s just the nature of pushing boundaries in tech—nothing comes easy at the edge.
But its partnership with Rapidus? That feels like a smart move, honestly. NTT brings the vision, while Rapidus adds some serious manufacturing muscle from Japan’s bold semiconductor scene.
With AI ramping up demand for smarter and greener computing, collaborations like this might just set the pace for what’s next. If you’re in the industry, it’s probably worth keeping an eye on what NTT, Rapidus, and Japan do from here.
Here is the source article for this story: NTT faces headwinds in co-packaged optics effort, pins hopes on Rapidus