Foxconn Industrial Internet (FII) has announced plans to begin mass production of co-packaged optics (CPO) all-optical switches in Q3 2026, targeting output exceeding 10,000 units. The move represents a major inflection point for the PCB substrate supply chain, as CPO technology demands dramatically higher layer counts, specialized low-loss materials, and tighter manufacturing tolerances than traditional networking PCBs. With AI data centers driving unprecedented bandwidth requirements, this production ramp signals a new wave of demand for advanced PCB manufacturing capacity.
Key Details
- Production Target: Over 10,000 CPO all-optical switch units planned for Q3 2026 mass production
- Revenue Growth: FII cloud computing revenue surged 88.7% year-over-year, now accounting for 66.75% of total revenue
- Net Profit: FII net profit rose 52% to RMB 35.29 billion ($5.17 billion) in 2025
- Technology Stack: CPO integrates optical components directly onto PCB substrates, requiring advanced HDI and high-speed laminate capabilities
Why CPO Changes the PCB Landscape
Co-packaged optics represents a fundamental shift in how data moves within AI data centers. By integrating optical transceivers directly onto the same substrate as the switching ASIC, CPO eliminates the copper interconnect bottleneck that plagues traditional pluggable optics architectures. This approach reduces power consumption by up to 30% while enabling bandwidth densities beyond 51.2Tbps per switch.
For PCB manufacturers, this is both an opportunity and a challenge. CPO substrates require ultra-low-loss dielectric materials, precise impedance control for high-speed differential pairs, and embedded optical waveguide structures that push the boundaries of current HDI manufacturing capabilities. The industry is responding with investments in next-generation substrate technology, but capacity remains tight.
10,000+ Unit Ramp
FII's Q3 2026 production target signals commercial-scale CPO deployment, moving beyond prototype volumes into data center-grade quantities.
88.7% Revenue Surge
FII's cloud computing segment grew 88.7% year-over-year, with AI-related demand now representing two-thirds of total business.
Substrate Complexity
CPO substrates require 20-40+ layer PCBs with embedded optical components, pushing HDI manufacturing to new limits.
Supply Chain Impact
PCB substrate demand from AI infrastructure is projected to grow 25-30% annually through 2028 as CPO and advanced packaging proliferate.
The Bigger Picture: AI Infrastructure PCB Demand
FII's announcement is part of a broader trend. The company became the largest manufacturer in Shenzhen by revenue in 2025, surpassing Huawei, BYD, and Tencent — driven almost entirely by AI infrastructure demand. FII chairman Brand Cheng emphasized that AI has become the company's core growth driver, with cloud computing revenue reaching RMB 602.68 billion.
This growth cascades through the entire PCB supply chain. From high-layer-count server boards to advanced substrates for optical interconnects, every tier of PCB manufacturing is seeing demand pressure. Laminate suppliers report extended lead times for low-loss materials, while HDI fabricators are investing billions in capacity expansion to keep pace.
CPO-Ready Substrates
High-density interconnect boards with embedded optical waveguide support
Low-Loss Materials
Specialized laminates for 112Gbps+ SerDes channel integrity
Thermal Management
Heavy copper and advanced cooling for high-power optical components
Impedance Control
Ultra-tight impedance tolerances for high-speed differential signaling
Scale Manufacturing
Capacity to support 10,000+ unit production ramps with consistent quality
Rapid Prototyping
Fast-turn HDI prototype services for CPO design validation cycles
— Ethan Yip, CTO at Illuminious"The transition to co-packaged optics is creating a new tier of PCB substrate requirements that didn't exist three years ago. Manufacturers who invested in high-layer-count HDI and low-loss material capabilities are now positioned to capture this wave — but the demand is outpacing capacity by a significant margin."
Preparing for the CPO Manufacturing Wave
Foxconn's commitment to mass-producing 10,000+ CPO switches in Q3 2026 confirms that optical interconnect technology is transitioning from R&D to commercial-scale deployment. For electronics manufacturers and OEMs, this means PCB substrate requirements will continue to escalate in complexity and volume.
Explore how Illuminious supports advanced PCB and PCBA manufacturing for AI infrastructure and optical interconnect applications at our PCB/PCBA solutions page.
