Advanced Packaging and Heterogeneous Integration: Reshaping Photonic Architectures for AI
AI infrastructure growth follows a reinforcing cycle. Larger models drive the need for more hardware. That hardware demand accelerates technology innovation, particularly in bandwidth density and interconnect efficiency. Innovation improves power efficiency and economics, enabling even larger models to be deployed, which then require more hardware.
As this cycle has been running, the inherent limitations of electrical connections are becoming bottlenecks for bandwidth, power, and reach. Optical interconnects are becoming increasingly important to enable future scaling and a continued AI innovation cycling.
<strong>From Pluggables to Co-Packaged Optics</strong>
Not only is a transition occurring from copper-based connections to optic based, but a transition is also occurring within optics architectures. Optical connectivity, for many of the same reasons as the fundamental shift from copper to optic, is transitioning from pluggable solutions towards co-packaged optics (CPO).
Traditional pluggable optics place optical engines at the faceplate. While modular and serviceable, they rely on long electrical traces, consuming significant power and limiting bandwidth density due to copper reach constraints.
Near-package optics represent an intermediate step, moving optical engines closer to the ASIC to reduce electrical losses while maintaining relatively manageable integration complexity.
CPO takes the next leap by integrating optics directly within the package. This approach minimizes electrical I/O, achieves the lowest energy per bit, and enables extreme bandwidth density. However, these benefits come at the price of a significant increase in packaging and integration complexity. For co-packaged solutions, both advanced packaging techniques and heterogenous integration become essential.
Heterogeneous integration, at its most basic is the integration of separately manufactured components into a single system, package or even die. These components may have different functions (computer, memory), process nodes, or even material systems (Si, InP) - but they are all brought together to make a single efficient device. In short - the final component is greater than the sum of its parts. Heterogeneous integration makes it possible by leveraging advanced packaging techniques. In the context of CPO, heterogeneous integration is bringing optic components (lasers, PICs, photodetectors, etc.) together with compute components.
<strong>Why Advanced Packaging Matters Beyond CPO</strong>
Although enabling CPO is a major motivation, heterogeneous integration and advanced packaging have powerful benefits that extend far beyond any single architecture.
First, heterogeneous integration enables alternate scaling pathways, similar in spirit to Moore’s Law extensions in the semiconductor industry. As an example, if fab yield concerns make a large die not economically viable, these technologies can ‘stitch’ smaller chiplets and result with an equivalent compute power. Specifically in the regime of optical networking, these techniques can enable optical bandwidth to scale generation over generation without relying solely on device-level improvements.
Second, it allows best-process integration. Different photonic technologies excel in different roles—III-V materials for light generation and modulation, and silicon photonics for routing and integration. Advanced packaging makes it possible to combine these technologies into a single, optimized solution.
Finally, advanced packaging supports faster innovation cycles. Chiplet-based approaches enable IP reuse, reducing design timelines and validation timelines. This results in both a faster development cycle but also a lower risk one, which is increasingly important as upgrade cycles compress.
<strong>Advanced Packaging Is Already in Production</strong>
These concepts are not theoretical. Advanced packaging is already being deployed at scale in both the wider industry and here at Lumentum.
One example is Lumentum’s stacked VCSEL-on-driver technology, which leverages 2.5D integration techniques to improve performance, footprint, and manufacturability. VCSELs themselves are the highest volume optical source technology in history, with decades of deployment across enterprise data centers, campus networks, and consumer sensing applications.
A second example is <a href="https://investor.lumentum.com/financial-news-releases/news-details/2026/Lumentum-Showcases-Breakthrough-Optical-Scale-Up-Demonstration-at-OFC-2026-Using-VCSEL-Technology/default.aspx">a recent technology demonstration by Lumentum at OFC 2026</a> – a fan out wafer level packaging architecture was used to integrate Lumentum VCSEL and photodiodes with commercially available TIA and driver chips. This integrated device – combining photonic chips with electronic chips in a unified package provides a unique solution for scale-up applications.
<img src="/sites/default/files/inline-images/OFC%202026%20-%20VCSEL%20demo.jpg" data-entity-uuid="8f7e6988-f9d3-4917-9388-4c5b723dae88" data-entity-type="file" alt="VCSEL-based scale-up interconnect demo at OFC 2026" width="609" height="417" loading="lazy"><br><em>Image 1: VCSEL-based scale-up interconnect demo at OFC 2026</em>
<img src="/sites/default/files/inline-images/vortix%20on%20quarter.jpg" data-entity-uuid="be917628-06aa-4888-bd89-6f58ef4374eb" data-entity-type="file" alt="10 Tbps VCSEL+PD optical engine prototype based on 3D FOWLP" width="319" height="257" loading="lazy"><br><em>Image 2: 10 Tbps VCSEL+PD optical engine prototype based on 3D FOWLP</em>
In parallel, multiple programs are applying advanced packaging and heterogeneous integration techniques to next-generation photonic platforms, reinforcing that this shift is already well underway.
<strong>Access additional information on CPO technology on our </strong><a href="https://www.lumentum.com/en/search?q=cpo"><strong>website</strong></a><strong>. </strong>
