Between 2025 and 2030, the market for co-packaged optics, the optical interconnects that let AI chips communicate at the speeds modern workloads demand, is forecast to grow nearly 400-fold. The equipment required to manufacture them, femtosecond lasers capable of drilling microscopic holes through glass substrates without cracking them, is still produced largely by hand.
The mismatch sits inside Goldman Sachs projections that AI infrastructure capital expenditure will climb from $765 billion in 2026 to $1.6 trillion by 2031, a figure that covers compute, data centre construction and energy. That forecast says relatively little about the tooling required to manufacture the individual components that make the compute work.
Femtosecond lasers, which emit pulses lasting quadrillionths of a second, have become important to advanced semiconductor and data centre hardware manufacturing because of a physics property that conventional lasers lack. When a standard laser cuts glass, it heats the material; uneven heating causes cracking. A femtosecond laser's pulses are so short that the surrounding material has almost no time to absorb heat before the pulse ends, allowing manufacturers to drill, trim or cut with near-surgical precision.
Nikolajus Gavrilinas, CEO of Lithuanian femtosecond laser manufacturer LITILIT, said: “Many advanced AI components, from semiconductor packages, glass substrates, to optical interconnects and advanced PCBs, require manufacturing technologies that can process materials without introducing heat damage. Femtosecond lasers are becoming one of the key enabling tools for this transition, and we believe demand will grow rapidly as AI manufacturing scales.”
The precision matters because the most constrained component in next-generation data centre design is often not the chip itself but the interconnect. Glass interposers, the wiring layers that allow chiplets to communicate at high bandwidth, require drilled vertical channels filled with copper. That process, done at volume, needs lasers that can handle industrial throughput without the specialist maintenance overhead that scientific-grade systems typically demand.
“A normal laser or mechanical drill heats the material as it cuts, and glass can crack or chip when heated unevenly,” Gavrilinas explained. “A femtosecond laser fires pulses so short that the surrounding glass has almost no time to heat up.”
Most femtosecond laser systems in production today evolved from laboratory instruments. They deliver the required precision but were not designed for the automation levels that semiconductor manufacturing requires. LITILIT began constructing a purpose-built laser factory in Vilnius in June 2026, based on technology developed with Lithuania’s Center for Physical Sciences and Technology, with patents covering reduced component complexity and higher automation. The company plans to replicate the production model with international partners.
TrendForce’s forecast for co-packaged and near-packaged optics, from around $100 million in 2025 to over $39 billion by 2030, captures the scale of the market for data centre optical connectivity. The laser manufacturing capacity that enables it is a quieter constraint, less visible than GPU supply or power infrastructure, but with similar potential to slow the pace of deployment if demand outstrips the tools available to build the hardware.
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