Nvidia has started mass production of Spectrum-X CPO switches, which leads to the destruction of the traditional optical modules market. The reasons and consequences of the transition to silicon photonics are analyzed, key players (TSMC, Marvell, InnoLight) and the impact on AI. An optical switch routes light signals directly between fiber ports without optical-electrical-optical (OEO) conversion, eliminating a major source of latency and power consumption in modern networks. The global optical switch market reached $5. 5 billion in 2024 and is projected to hit $12. This paper first summarizes the topologies and traffic characteristics in data centers and analyzes the reasons and importance of moving to optical switching.
