Ayar Labs and Alchip to Scale AI Infrastructure with Co-Packaged Optics

Collaboration between the two companies will equip hyperscalers with scalable, power-efficient optical engines for next-generation AI workloads

SAN JOSE, Calif. – Sept. 7, 2025 – Ayar Labs, a leader in co-packaged optics (CPO) for large-scale AI workloads, and Alchip Technologies, the high-performance ASIC leader, today announced a strategic partnership to accelerate AI scale-up infrastructure. The collaboration fulfills hyperscaler demands for advanced AI accelerators and platforms that deliver enhanced performance, efficiency, and scalability.

This new partnership brings together Ayar Labs’ industry-leading CPO technology, Alchip’s advanced packaging expertise, and TSMC’s advanced packaging and process technologies to build a robust ecosystem to accelerate the production and adoption of optical engines.

“Ayar Labs’ co-packaged optics technology unlocks the next era of AI infrastructure by removing the limitations of copper interconnects,” said Mark Wade, CEO and co-founder of Ayar Labs. “By combining our optical I/O innovation with Alchip’s deep expertise in advanced packaging, we’re building an ecosystem to accelerate the transition to power-efficient, high-performance AI systems.”

Traditional copper-based interconnects can no longer keep pace with AI workloads. This partnership helps to overcome legacy performance bottlenecks to enable multi-rack scale-up system architectures by implementing Ayar Labs’ optical I/O technology into Alchip’s high-performance ASICs. This unlocks high-bandwidth, low-latency connectivity for extended memory and computing resources across larger systems and data centers, dramatically improving interactivity while reducing power consumption.

“Current and future AI workloads require innovative and often collaborative advanced packaging design expertise and production-ready solutions. Alchip has proven to the market that it has the entire skill set to serve tier 1 hyperscale customers,” said Johnny Shen, Chairman and CEO of Alchip Technologies. “We’re working with Ayar Labs to bring leading edge optical I/O technology to demanding high-performance next-gen designs, helping hyperscalers achieve new levels of data throughput and energy efficiency.”

Using TSMC’s packaging and silicon technologies, including COUPE™, TSMC-SoIC®, and advanced process nodes, Ayar Labs and Alchip are addressing critical data movement bottlenecks and enabling new system architectures. The result is a scalable, repeatable path for next-generation AI infrastructure CPO adoption.

Ayar Labs and Alchip will share additional details on their partnership and joint CPO solutions for AI data center scale-up in the coming weeks.