Molex Completes $430M Acquisition of Teramount: Co-Packaged Optics Move Closer to AI Data Center Production

Molex Bets Big on Fiber-to-Chip: The Teramount Acquisition

Molex has confirmed the completion of its acquisition of Teramount Ltd., a Jerusalem-based silicon photonics packaging specialist. The deal, reportedly valued at approximately $430 million according to Israeli technology outlet CTech, gives Molex control of a key enabling technology for co-packaged optics (CPO) — the approach that moves optical interfaces directly onto or next to the switch ASICs and processors in AI data centers.

The acquisition signals that the industry’s largest interconnect companies are no longer treating CPO as a future technology. They are investing hundreds of millions of dollars to own the manufacturing building blocks needed to deploy it at scale.

Source: Molex press release, May 2026; eeNews Europe, May 11, 2026; CTech (Calcalist)

What Teramount Brings: The TeraVERSE Platform

Teramount’s core technology is its TeraVERSE platform — a passive-alignment optical coupling system that connects optical fibers to silicon photonics chips without the expensive active alignment typically required for sub-micron fiber positioning.

Key technical capabilities:

• Passive alignment: Assembly tolerances of >±30 µm with < 0.5 dB coupling loss, far more forgiving than the 0.1–1 µm tolerances needed for conventional edge-coupled or grating-coupled approaches
• Wafer-level self-aligning optics: Can be integrated at the wafer level for high-volume manufacturing
• Detachable fiber-to-chip interface: Enables field serviceability — a critical requirement for data center operators who need to replace modules without rebonding fibers
• Universal photonic coupler: Works across different silicon photonics platforms (not locked to one foundry’s process)

The practical importance of these tolerances cannot be overstated. One of the primary obstacles to CPO adoption has been manufacturability, not link speed. If you need sub-micron active alignment for every fiber connection, volume production becomes prohibitively slow and expensive. Teramount’s passive approach could change that equation.

Why Co-Packaged Optics Matter for PCB Design

CPO represents a fundamental shift in how data center interconnects are architected. Instead of using front-panel optical transceivers (SFP, QSFP, OSFP modules) connected to the switch ASIC through long PCB traces, CPO places the optical engine on or adjacent to the ASIC package itself.

Impact on PCB Complexity

For PCB designers and fabricators, CPO both simplifies and complicates board design:

Simplification:

• Fewer high-speed electrical channels on the PCB (optical links replace 112G SerDes traces)
• Reduced trace count and layer count for I/O-heavy switch and router boards
• Lower power dissipation on the PCB (optical links are more power-efficient per bit)

New challenges:

• The CPO module sits on the PCB near the ASIC, requiring precise mechanical tolerances for optical alignment
• Thermal management becomes more complex — the optical engine adds heat near the hottest component (the ASIC)
• Power delivery for the optical engine must be integrated into the PCB design
• New connector and mechanical interface standards are still evolving

The Market Opportunity

LightCounting forecasts CPO revenue exceeding $9 billion by 2030, with a sharp rise in silicon photonics content in data center optics. As data center bandwidth demand grows from 51.2 Tbps per switch today toward 102.4 Tbps and beyond, the electrical I/O bottleneck will increasingly push designs toward optical solutions at the package level.

What This Means for the PCB Supply Chain

The Molex-Teramount deal is part of a broader trend of connector and interconnect companies vertically integrating photonics capabilities:

• Molex now has both co-packaged copper solutions (announced earlier in 2026) and co-packaged optical coupling technology
• The competition includes Broadcom (silicon photonics), Intel (integrated photonics), and Cisco (optical engine development)
• PCB fabricators serving the data center market need to prepare for substrates that incorporate optical alignment features, fine-pitch copper for power delivery, and thermal management structures co-located with optical engines

Teramount was founded in 2015 by Hesham Taha and Abraham Israel and had raised $58 million since inception, including a $50 million Series A round in 2025 led by Koch Disruptive Technologies. The company will continue as a design and engineering hub in Jerusalem, operating within Molex’s Optical Connectivity segment.

For hardware engineers designing data center equipment today, the message is clear: CPO is moving from R&D to production planning. The PCB designs you create for 2027-2028 products should account for the possibility — or probability — that optical interfaces will move from the front panel to the package.

Image: Jordan Harrison via Unsplash

Sources:

• Molex, “Molex Completes Acquisition of Teramount Ltd.,” May 2026
• eeNews Europe, “Molex Teramount deal targets co-packaged optics,” Brian Tristam Williams, May 11, 2026
• OPN (Optica), “Molex Looks to Silicon Photonics with Teramount Acquisition,” May 2026
• CTech / Calcalist, acquisition valuation report, April 2026