Corning CEO Wendell Weeks outlined his vision for a $10 billion opportunity to use co-packaged optics (CPO) to bring optics “inside the box."
Weeks told investors during the vendor’s latest earnings call that CPO adoption for scale-up networking (inside a server or rack) will “likely have an exponential adoption curve,” with the New York-based firm looking to capitalize on optical fiber demand.
“We calculate that the demand for optical content per GPU [graphic processing unit] in our enterprise map will increase by 1.3x-1.5x by 2028," Weeks said. "As we head into 2030, we see the potential that that number could head much, much higher."
Corning's CPO director Benoit Fleury previously told SDxCentral that the fiber provider is already integrating optical fiber into chip platforms including Nvidia’s Spectrum-X Ethernet and InfiniBand-based Quantum-X networking switches, as well as Broadcom’s third-generation CPO systems.
Although it is bolstering optics inside the box, Weeks told investors the technology will “likely start” with scale-out (cabinet to cabinet and node-to-node) connectivity, but added: “It is clear that scale-up drives a dramatic increase in the size of the opportunity.”
“Historically, we have had no inside-the-box content,” Weeks said. “What's happening here is that because of the potential for improvement of latency, faceplate density, power, and reliability, customers are looking for the opportunity to move away from pluggables and toward co-packaged optics and near-package optics.”
Corning is already making a lot of cash off the back of the AI buildout, having secured a multibillion-dollar deal with Amazon in June.
The vendor’s results for its second quarter saw it continue to ride the wave, revealing sales grew by 17% year over year to $4.74 billion. Its optical communications business witnessed sales soar by 32% to $2.07 billion, with a 65% increase in Enterprise Networks, while AI-specific product sales grew “significantly faster.”
“Our orders are accelerating. The portion of enterprise sales related to AI data centers nearly doubled in the quarter,” Corning CFO Ed Schlesinger told investors. “Across optical communications, we continue to expand and strengthen strategic agreements across our key customer base, reinforcing Corning's position as a critical supplier to next-generation AI and broadband infrastructure.”
Corning’s optics lines have seen it become one of the unsung players in the world of AI infrastructure buildout, a presence capped off by a “multiyear commercial and technology partnership” with Nvidia believed to be worth up to $500 million.
Away from AI, Corning’s carrier sales also grew, but by just 1% year over year. Schlesinger said the firm expects carrier sales to grow by mid-single digits, with demand being driven by fiber-to-the-home (FTTH) deployments and data center interconnect.