China Merchants Securities Co., Ltd. (CMSC) has released a research report indicating that leading FAU (Fiber Array Unit) manufacturers stand to gain not only from rising demand tied to optical module volume growth but also from a significant surge in high-channel FAU requirements driven by the commercialization of CPO (Co-Packaged Optics) and NPO (Near-Packaged Optics) technologies. The report highlights that FAUs are experiencing concurrent growth in both volume and pricing as they follow the expansion of high-speed optical modules. According to Frost & Sullivan, the market for FAUs specifically supporting CPO could reach $3 billion by 2030, representing more than ten times the current size of the optical module FAU market. The ongoing industrialization of CPO/NPO clearly signals an upward trajectory in the value of passive optical components like FAUs.
FAUs are critical passive interconnect components within optical modules or optical engines, and in high-density optical interconnect solutions such as CPO/NPO, they are evolving toward higher channel counts, greater density, and more customized designs. Some advanced FAUs now incorporate features like detachability, polarization-maintaining capabilities, and vertical coupling, which substantially raise manufacturing complexity and unit value. Leading FAU producers are well-positioned to benefit from both the demand uplift caused by optical module shipment growth and the explosive need for high-channel FAUs as CPO/NPO technologies mature.
The report explains that FAUs serve as the essential passive link connecting active optical components inside modules or engines to external circuits, often taking the form of MT-FA assemblies. These components require sub-micron manufacturing precision, directly influencing coupling efficiency and final signal quality. As transmission speeds and channel counts in optical modules and engines increase, so do the performance requirements for FAUs in terms of channel number, precision, loss, and consistency. Recent years have seen FAUs achieve simultaneous gains in both price and volume alongside the expansion of high-speed optical modules.
High-density interconnect solutions like CPO/NPO dramatically elevate the technical specifications and channel requirements for FAUs, opening substantial market opportunities. For instance, a single FAU paired with a 3.2T CPO optical engine features 36 channels—comprising 32 single-mode fiber channels and 4 polarization-maintaining fiber channels—making it far more complex and valuable than the FAUs used in 800G or 1.6T modules, which typically consist of two 8-channel FAs. FAU structures are also upgrading, shifting from one-dimensional to two-dimensional layouts to achieve higher density, while supporting vertical coupling. To improve maintainability and lower mass-production costs, FAUs are moving toward detachable and passively aligned designs. As Scale-up optical interconnect penetration rises, CPO/NPO is poised to catalyze a surge in demand for high-channel FAUs.
Global Information estimates the global FAU market for optical modules at approximately $227 million in 2025, while Frost & Sullivan projects that the CPO-specific FAU market alone could hit $3 billion by 2030—a figure more than ten times the current market size. Chinese FAU manufacturers, with their deep process expertise and accumulated experience in passive optical components, have secured strong positions, and high-channel FAU products are expected to drive robust performance growth for these firms. As AI computing infrastructure expands both domestically and internationally, domestic manufacturers of FAUs and other passive components have built notable competitive moats in large-scale manufacturing, fundamental technology understanding, and yield management. Several leading FAU makers have secured favorable positions with downstream clients and made encouraging progress in capacity preparation and product validation for CPO/NPO-specific high-channel FAUs. This positions them to capture significant demand from solution providers like Corning and Coherent, NPO optical engine manufacturers, and end customers including NVIDIA, Broadcom, and cloud service providers.
Risk warnings: The pace of technology adoption may fall short of expectations; evolution of technical routes and product iterations could vary; certification and supply share with core clients may underperform; intensifying market competition and potential price declines; fluctuations in raw material costs; and risks from international trade conflicts and exchange rate movements.