China’s A-share CPO (co-packaged optics) sector rallied on August 21, led by Xuguang Electronics, which hit its daily limit, while Eoptolink Technology rose more than 6% and Colibri Technologies and Zhongji Innolight each gained over 3%. Zhongji Innolight’s turnover exceeded 22 billion yuan, or about $3.3 billion, and Eoptolink’s surpassed 18 billion yuan, or about $2.7 billion. The move followed a Nature Electronics paper by SK Hynix, the University of Virginia and other research institutions that identified CPO as a potential solution to the widening gap between AI computing growth and interconnect bandwidth. Securities firms expect CPO to create opportunities for optical equipment and manufacturing upgrades, although yield, thermal-management and packaging challenges could limit near-term earnings. Yole Group forecasts CPO optical-engine shipments to grow at an approximately 176% CAGR from 2024 to 2030, while Zheshang Securities, citing QYResearch, expects the global CPO market to rise from about 767 million yuan in 2025 to 9.62 billion yuan by 2032, a 38.6% CAGR.