In sum – what to know
$30B opportunity – PhotonLink could add $30 billion to Coherent’s addressable market by 2030, on top of its existing $60 billion portfolio opportunity.
Multiple architectures – Coherent has more than 10 customer engagements each for CPO and NPO, plus more than five for chip-to-chip photonic connections.
Ramps are underway – CPO scale-out production is expected in Q4 2026, followed by CPO scale-up and NPO ramps in 2027 and chip-to-chip deployments around 2029-2030.
Coherent is positioning its new PhotonLink platform to help data center customers transition from electrical to photonic connections as bandwidth requirements increase across AI infrastructure.
Speaking at the European Conference on Optical Communication 2026 (ECOC 2026), Coherent chief executive officer Jim Anderson said the objective is to make the transition “as easy as possible” by providing customers with a complete optical solution rather than individual components.
Anderson said electrical connections eventually reach their limits as data rates and bandwidth requirements increase. While much of today’s data center connectivity is already optical, he said the remaining electrical portions, including scale-up networks and eventually chip-to-chip connections, are expected to transition to photonic technologies.
PhotonLink is designed to support several architectures, including co-packaged optics (CPO), near-packaged optics (NPO) and chip-to-chip photonic connections. Coherent said customer engagement has increased significantly over the past six to 12 months, with more than 10 unique customer engagements for CPO, more than 10 for NPO and more than five for chip-to-chip connections.
The company also said anchor customer agreements are already secured for CPO and NPO. Julie Eng, Coherent’s executive vice president of optical components and chief technology officer, identified Nvidia as the public customer for the company’s CPO long-term agreement.
Production is expected to develop in stages. Coherent expects its first CPO production to ramp in the fourth quarter of 2026 for scale-out applications, with CPO for scale-up applications following in the second half of 2027. NPO production is also expected to ramp in the second half of 2027, while chip-to-chip photonic connections are further out, with deployments expected around 2029 and 2030.
Anderson said Coherent’s existing portfolio represents an addressable market of about $60 billion by 2030, while PhotonLink could provide access to another $30 billion of integrated optics market opportunity.
A central element of the strategy is combining technologies that Coherent already manufactures. The PhotonLink platform spans photon generation, optical shaping and guiding, and detection. The company highlighted ultra-high-power and high-power continuous-wave lasers, VCSEL arrays, optical components, fiber assemblies, and silicon photonics among the technologies being integrated into its solutions.
For AI data centers, the company highlighted power efficiency and density as important considerations in the move toward photonic connectivity. Coherent said its high-power lasers are designed to provide high output power and efficiency, while its VCSEL-based solutions target high-density optical connectivity.
The company is developing several approaches because it does not expect a single architecture to fit every application. Anderson said some customers will adopt CPO immediately, while others may initially use NPO before moving toward CPO. Coherent is also seeing growing interest in photonic connections between chips.
Eng said the different architectures involve trade-offs. NPO, for example, can be easier to deploy and more serviceable because the optical module is positioned on the board next to the package, while moving the optics farther from the chip can affect power consumption and signal integrity.
The company is therefore presenting PhotonLink as an architecture-agnostic platform that can combine different technologies depending on customer requirements. Eng said Coherent can assess alternatives based on factors including power consumption, cost, complexity. and signal integrity.
For Coherent, the strategy represents an expansion from supplying individual optical technologies toward providing integrated connectivity solutions as AI data center architectures evolve.
