Wedoany.com Report on Mar 10th, U.S. tech companies Google and NVIDIA have placed substantial orders for optical interconnect components with Taiwan, China-based manufacturer Innolux. This move aims to gradually replace traditional copper wire interconnections with optical transmission within their data center hardware. The initiative seeks to address supply chain challenges and accelerate the large-scale adoption of next-generation optical transmission technologies.
Reports indicate that these orders stem from the tech giants' urgent need for supply chain diversification, aiming to reduce over-reliance on single suppliers. Among them, NVIDIA, whose existing suppliers struggled to meet surging order demands, was the first to seek cooperation with Innolux. Subsequently, Google placed orders based on similar strategic considerations, triggering a chain reaction in supply chain adjustments.
NVIDIA CEO Jensen Huang recently discussed the company's supply chain strategy at a Morgan Stanley technology conference. He stated he "likes constraints," explaining, "because in a constrained world, you have no choice but to choose the best." This remark has been interpreted by the industry as NVIDIA actively seeking optimal technological solutions to break through supply chain bottlenecks.
In fact, NVIDIA's progress in silicon photonics and co-packaged optics (CPO) last year fell short of expectations due to supply chain issues. This large order placed with Innolux aims to meet its growing demand for network solutions. Meanwhile, NVIDIA has deeply integrated with upstream core suppliers through capital operations, investing $2 billion each in optical technology companies Lumentum and Coherent. It has also invested to support startup Ayar Labs in expanding its CPO production capacity, building an optical supply chain landscape from R&D to mass production.
Google's order is closely tied to its internal project codenamed "Mission Apollo." Launched in 2023, the project's core goal is to enhance connectivity performance in hyperscale data centers using optical circuit switches. Additionally, Google actively promotes industry standard development, supporting the establishment of photon network switch standards under the Open Compute Project (OCP) Foundation framework.
As a key supplier of optical interconnect components, Innolux has not only secured critical orders from Google and NVIDIA but also supplies chips manufactured using Fan-Out Panel-Level Packaging (FOPLP) technology to SpaceX. This is an advanced chip packaging technology performed on rectangular panels, widely used in aerospace and related fields.
