Ayar Labs and Alchip Technologies have formed a strategic partnership to accelerate the adoption of co-packaged optics in large-scale artificial intelligence infrastructure, targeting the performance and efficiency demands of hyperscale data centers.
The collaboration combines Ayar Labs’ optical input/output technology with Alchip’s expertise in advanced packaging, alongside Taiwan Semiconductor Manufacturing Co.’s (TSMC) silicon and packaging processes. Together, the companies aim to build a robust ecosystem for production-ready optical engines, enabling high-bandwidth, low-latency connections essential for next-generation AI workloads.
“Co-packaged optics unlocks the next era of AI infrastructure by removing the limitations of copper interconnects,” said Mark Wade, chief executive officer and co-founder of Ayar Labs. “By combining our optical I/O innovation with Alchip’s deep expertise in advanced packaging, we’re accelerating the transition to power-efficient, high-performance AI systems.”
Copper interconnects, the current standard in data centers, are increasingly viewed as inadequate to handle the growing complexity and scale of AI models. The partnership aims to address this bottleneck by embedding Ayar Labs’ optical I/O into Alchip’s high-performance ASICs, creating multi-rack scale-up system architectures that extend memory and compute resources across data centers. The result is expected to be greater interactivity, reduced energy consumption, and improved scalability for hyperscale operators.
“AI workloads require innovative and collaborative advanced packaging solutions,” said Johnny Shen, chairman and chief executive officer of Alchip. “By working with Ayar Labs, we’re bringing optical I/O to high-performance next-generation designs, helping hyperscalers achieve higher throughput and greater energy efficiency.”
The initiative leverages TSMC’s advanced technologies, including COUPE, TSMC-SoIC, and leading-edge process nodes, to tackle data movement challenges and enable new system architectures. Ayar Labs and Alchip said the approach creates a scalable, repeatable pathway for co-packaged optics adoption in AI infrastructure.
Further details on the companies’ joint CPO solutions and deployment roadmap are expected in the coming weeks.
