Largan Precision and TSMC partner to chase AI opportunities in co-packaged optics

Largan Precision, the company that makes the tiny lenses in your iPhone, is pivoting toward something considerably larger in scope. The Taiwanese optical component giant has teamed up with TSMC to develop co-packaged optics (CPO) technology for AI data centers, a move that could reshape how the world’s most powerful computing systems move data.

The partnership targets a specific pain point in modern AI infrastructure: the copper wires connecting chips inside data centers are running out of bandwidth. CPO technology replaces those copper links with light-based interconnects, and Largan wants to manufacture the precision optical components that make it work.

From smartphone lenses to silicon photonics

Largan has been Apple’s go-to lens supplier for years, building its reputation on manufacturing optical components at extraordinary precision. Now the company is channeling that expertise into collimators and fiber array units (FAUs), two critical pieces of the CPO puzzle that help guide light signals into and out of silicon photonics chips.

Largan’s collimator components require alignment accuracy below 0.3 microns. Samples have already been delivered to TSMC for testing, with the collaboration reportedly linked to AMD’s chip programs, though Largan hasn’t confirmed those details publicly.

The company’s subsidiary, PhotoniCore Technologies, is leading the charge. An automated pilot production line for fiber arrays is expected to come online by September 2026, with small-volume production following roughly 6 to 12 months after that. Commercial revenue from the CPO venture isn’t projected until 2027 or 2028.

At Computex 2026, Largan displayed several CPO-related prototypes and confirmed it’s running proof-of-concept work with multiple customers.

Why copper can’t keep up with AI

Co-packaged optics solves bandwidth limitations by integrating optical components directly onto or very close to the processor package itself, rather than relying on separate pluggable transceivers connected by copper traces. Light travels faster, generates less heat, and can carry far more data per channel.

Strategic diversification at a pivotal moment

For Largan, the CPO push represents a calculated hedge against its heavy dependence on the smartphone market. Mobile phone shipments have plateaued globally, and AI data center components sit in a market that’s expanding rapidly.

The reported connection to AMD is also noteworthy. AMD has been aggressively expanding its AI chip portfolio and would benefit from CPO solutions that improve the performance of its data center processors.

Largan has also indicated it’s exploring facility expansions contingent on the CPO venture’s success.

The competitive landscape in CPO is still taking shape. Established players like Broadcom and Intel have their own silicon photonics programs, and several startups are racing to commercialize CPO solutions.

The 2027-2028 revenue timeline means investors won’t see financial results from this initiative for at least a year.