Report: Foxconn has already "supplied in advance" all-optical CPO cabinets to Nvidia and has significantly raised its shipment targets.
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Foxconn’s AI business is quietly shifting gears.
According to Taiwan’s Economic Daily News on May 13, market sources report that Foxconn Group’s “all-optical CPO switch cabinets” have been delivered ahead of schedule to major client Nvidia. The shipment target has been significantly revised upward from the original estimate of over 10,000 units by 2026 to a combined total of over 50,000 units by 2026-2027.
Industry insiders reveal that the supply of Foxconn’s “all-optical CPO switch cabinets” produced in its Vietnam factory is extremely tight, with even the cabinets intended for demonstrations all handed over to Nvidia—“not a single unit left.” The CPO switch cabinets that were originally intended for display at this year’s Computex Taipei may not be seen in physical form at the event.
In response, Foxconn’s official reply was, “No comment on individual customers or products.”
Gross profit margin doubles, CPO becomes Foxconn’s second growth curve
Why is this business attracting so much market attention? The key lies in changes to the profit structure.
The gross profit margin for traditional server contract manufacturing is only 5% to 8%, while the CPO switch’s margin reaches double digits—meaning, for the same revenue scale, the CPO business can generate much more actual profit.
The company forecasts that in 2026, the CPO business will contribute more than 15% of revenue for Foxconn subsidiary Industrial Fulian, becoming its second growth curve after AI servers. The report says this will bring structural changes to Foxconn Group’s overall profitability.
What is CPO? Why does Nvidia need it?
CPO (Co-Packaged Optics) is a technology that integrates optical modules directly with chips.
Simply put, as AI data centers expand, the amount of data that needs to be transferred between servers increases sharply, and traditional electrical signal transmission faces bottlenecks in speed and power consumption. The role of the all-optical CPO switch is to replace electrical signals with optical signals for data transmission—faster speeds and lower energy use.
Industrial Fulian previously stated that, to support the growth of AI computing power, four key technological changes are underway in AI infrastructure, and the all-optical CPO switch is one of them. Industrial Fulian also pointed out that 2026 will be a critical turning point for optical communications in data centers.
Foxconn is Nvidia’s sole CPO contract manufacturer
According to reports, Foxconn Group is Nvidia’s sole contract and design manufacturer (ODM) for all-optical CPO.
This exclusive status means the growth in shipments of Nvidia’s CPOs will directly translate into Foxconn orders. Nvidia plans to ship over 50,000 CPO switches from 2026 to 2027, and Foxconn is the only executor of this target.
Industrial Fulian previously disclosed the timeline: prototype shipments in the first quarter, mass production launches in the third quarter, a full-year shipment target of 10,000 units, and 2026 being positioned as the “first year of CPO.” The current market news shows actual progress has surpassed the original plan.
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