NEW YORK – This week saw two major announcements in the US air taxi sector. Joby Aviation raised another $500M from prior-backer and partner Toyota and Beta Technologies unveiled Monday a new passenger-carrying vehicle. While still in its nascent stages, the electric vertical take-off and landing (eVTOL) taxi market presents a compelling longer-term investment opportunity, particularly in the US and Korea. Driven by eVTOL tech advancements, a growing need for efficient urban transport solutions, and supportive government initiatives, the market looks to be poised for lift off.

Market Growth and Drivers

The global air taxi market is projected to experience significant growth, with estimates ranging from $4.04 billion at a CAGR of 23% to USD 8 billion by 2030-32. North America dominated the global market in 2023 with 30%+, due to technological innovation, investment, and favorable regulations. Key growth factors include:

• Advancements in high-energy-density batteries and efficient electric propulsion have extended flight ranges, and increased safety and reliability.
• Air taxis offer a potential solution to traffic Congestion in major cities by utilizing airspace, providing faster and more efficient point-to-point travel.
• The FAA is actively working on regulatory and certification processes and air traffic management systems for low-altitude urban airspace.
• An Influx of capital from VCs, tech giants, and established aerospace manufacturers is driving innovation and accelerating commercialization.

Key Players and Strategies

California startup Joby Aviation is a leading market contender backed by a substantial investment from Toyota now $894M. Its focus is now on obtaining FAA Type 2 Certification for commercial ops and scaling up production with Toyota's support. Joby acquired Uber’s air taxi moonshot Elevate in 2020 in a deal that saw Uber invest $75M, and it aims to make trips as affordable as an Uber Black.

LA’s Archer Aviation is another key US player. Its strategy centers around leveraging existing infrastructure like unused airports and helipads to minimize initial investment. Its data-driven approach to vertiport location selection, using customer data from partners like Southwest and United Airlines, ensures high demand and efficient routing and offers seamless integration with existing airline networks. Archer also has a partnership with automaker Stellantis, and aims to serve LA’s SoFi Stadium for major sport events like the 2026 World Cup, and the 2028 Olympics.

Vermont’s Beta Technologies has raised $860M+ from investors like Amazon. Its core strategy is to sell aircraft and infrastructure to defense, cargo, and medical logistics companies with existing UPS and U.S. Air Force deals. Beta is also expanding into air taxis by adapting its existing eVTOL aircraft. Its cargo focus and partnerships with potential customers like Blade give it a potential advantage.

Market Challenges

While the air taxi industry holds promise, challenges include:

• A lengthy and stringent Certification and Safety process.
• Development of supporting infrastructure like vertiports, charging stations, and maintenance facilities through public/private sector collaboration.
• Solving financial viability to move from R&D/testing to commercialization will require substantial investment and strong demand, which isn’t yet certain.

Investment Landscape and Opportunities

So how realistic is the investment opportunity?

• High Upside Potential with the industry still in its early stages.
• Cutting-edge Tech Proxy. The sector is driven by rapid tech advancements in battery tech, autonomous flight, and AI, so offers good exposure to these.
• The growing number of strategic partnerships between startups, aerospace & tech companies, and airlines gives the sector a degree of credibility and inevitability.
• Government Support through funding, regulatory initiatives, and pilot programs also gives it credibility.

Korea: Another Promising Market

With its focus on technological innovation and urban mobility solutions, South Korea is emerging as a significant player in the air taxi market. The Korean government's support through regulatory initiatives and pilot projects, coupled with investments in infrastructure development, creates a favorable environment. Archer has strategic partnerships with local ride-sharing player Kakao Mobility to integrate into its mobile app. Supernal, a Hyundai subsidiary, is also developing an eVTOL aircraft, targeting commercial passenger flights by 2028.

Conclusion

While challenges remain, the market's high growth potential, tech advancements, industry interest and increasing traction offer significant opportunities for investors. As the industry matures, investors who identify and back the right flying horses could reap substantial rewards. Air taxi companies like Archer and Joby are incurring deep R&D and logistics losses, per SEC filings, and this will only increase as they scale up so they likely won’t be profitable any time soon. This looks like another long- to mid-term play in the current environment unless the government intervenes.

NEW YORK – Global technology intelligence firm ABI Research recently completed its 2024 Manufacturers' Technology Adoption & Attitudes Survey, a comprehensive survey of 461 manufacturing decision-makers across the United States, Malaysia, and Germany to uncover real-world attitudes, adoption trends, and valuable insights that reflect the current technological landscape within the manufacturing industry. When asked which criteria were most important when evaluating a new solution or vendor, 64% of respondents ranked a robust onboarding process with training, resources, and post-sales follow-up as the most critical.

"Improving quality and productivity levels are key objectives for survey respondents. However, an overriding concern is how to deploy the technologies to achieve those objectives. Manufacturers require assurance that they will receive adequate support and training resources to quickly adapt, along with ongoing follow-up from the vendor," explains Michael Larner, Distinguished Analyst at ABI Research.

Vendors often prioritize outlining potential investment outcomes to provide evidence of return on investment. Benefits will take longer to accrue if users cannot fully understand and properly utilize the solution. To avoid this, the vendor or their partners must be present during the initial launch, provide training resources that enable users to map the solution to their workflows, and adhere to a strict follow-up plan with the customer. These measures will require investment in the post-sales process, emphasizing partners' education so that they effectively represent the vendor in onboarding processes.

The survey further revealed that recruiting and retaining staff is challenging for manufacturers. The lack of skills underscores the concerns not only regarding deploying technologies but also fully grasping the opportunities that digital technologies offer. "Hand holding by the vendor will be required when manufacturers are devising Proofs of Concept (PoCs), evaluating suppliers, and implementing solutions at their facilities," Larner concludes.

These findings are from ABI Research's Industrial and Manufacturing Survey 1H 2024: What Are Respondents Looking for from Vendors? report. This report is part of the company's Industrial & Manufacturing Technologies research service, which includes research, data, and ABI Insights.

CAMBRIDGE, UK – In recent years, there has been a noticeable trend in optical transceiver technology, moving toward bringing the transceiver closer to the ASIC. Traditionally, pluggable optics—optical modules inserted and removed from the front panel of a switch—have been located near the edge of the printed circuit board (PCB). These pluggable optics are widely used in data center networks to interconnect switches and servers. While they offer flexibility, scalability, and easy upgrades, they come with significant challenges, particularly high power consumption and limited bandwidth density.

To overcome these limitations, the industry is experiencing a paradigm shift. Optical transceivers are being brought closer to the ASIC, with the goal of shortening the copper channel required for electrical signal transmission. However, despite advancements in reducing the length of the copper channel, the challenges posed by deviating from the industry-standard pluggable architecture are not yet fully resolved. As a result, the industry may move directly toward more advanced solutions, like Co-Packaged Optics (CPO). IDTechEx's report, "Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts", explores the latest advancements in CPO technology. It analyzes key technical innovations and packaging trends, evaluates major industry players, and provides detailed market forecasts, highlighting how CPO adoption will transform future data center architecture.

The rise of co-packaged optics (CPO)

Co-Packaged Optics (CPO) represents a significant leap in data transmission technology. CPO integrates the optical engine and the switching silicon onto the same substrate. This design eliminates the need for signals to traverse the PCB, further reducing the electrical channel path and significantly improving performance.

Reducing the electrical channel path is crucial because the core of data transfer relies on the copper-based SerDes (Serializer/Deserializer) circuitry, which connects switching ASIC to pluggable transceivers. As data demands grow, SerDes technology has evolved to enable faster transmission, but faster ASICs require better copper connections—either through more channels or higher speeds. However, as link density and bandwidth increase, a significant portion of system power—and thus cost—is consumed by driving signals from the ASIC to optical interconnects at the edge of the rack. The size limitations of ASIC ball grid array (BGA) packages, due to warpage concerns, require higher SerDes speeds to support increased bandwidth. However, this also results in higher power consumption because greater channel loss occurs at higher frequencies.

One of the key solutions to these challenges is to reduce the distance between the ASIC and the optical transceiver. A significant portion of system power is consumed in driving data signals from the ASIC to the optical interconnects at the edge of the rack. By bringing the optical transceivers closer to the ASIC, several advantages can be realized:

Reduced Signal Losses: Shortening the electrical path between the ASIC and the optical interconnect minimizes signal degradation.

Lower Power Consumption: Reducing the distance allows for the use of lower-power SerDes options, leading to overall lower system power consumption.

Enhanced Efficiency and Performance: By cutting down the power required for data transmission, system efficiency and performance are significantly improved.

Scalability: CPO technology supports future scalability for high-bandwidth systems, making it ideal for data centers that need to meet growing data demands.

How CPO will shape interconnect architecture for AI

CPO is set to transform interconnect architecture for AI. Here, IDTechEx uses Nvidia's cutting-edge DGX NVL72 server as an example to explain how IDTechEx predicts the next generation AI architecture. Nvidia, the market leader in AI accelerators, has designed the DGX NVL72 to redefine AI performance standards, supporting up to 27 trillion parameters—far surpassing ChatGPT 4’s 1.5 trillion parameters.

The DGX NVL72 contains 18 compute nodes, each equipped with four Blackwell GPUs and two Grace CPUs, along with nine NVLink switches. Modern AI accelerator architectures, such as this, employ multiple communication networks to manage data flow:

Backside Compute Network: In the DGX NVL72 architecture, each compute node connects to an L1 compute switch via Nvidia's NVLink Spine, a high-speed copper interconnect offering 1.8T bidirectional bandwidth through 18 lanes of 100G, using 36 copper wires per connection. L1 switches are similarly interconnected, resulting in a total of 5184 copper wires across the system. To maintain signal integrity over these distances, retimers are used at the switches, though they introduce latency and bandwidth limitations, especially at higher speeds like 100G per lane. Additionally, copper links like these, while cost-effective, face signal degradation issues such as channel loss and clock jitter over longer distances, which become more pronounced as bandwidth demands increase.

Optical interconnects present a compelling alternative to copper, offering much higher bandwidth density and greater efficiency over long distances—critical for AI workloads involving massive data transfers between GPUs. Looking ahead, it is expected that copper interconnects will be replaced by Co-Packaged Optics (CPO), enabling direct connections between compute nodes and eliminating the need for L1 compute switches in the backside network.

Frontside Network: Each AI compute node currently connects to an L2 switch using pluggable optical transceivers at speeds ranging from 400G to 800G. This optical setup facilitates long-distance data transmission between racks, offering lower signal loss and greater bandwidth density than copper. In the future, CPO is expected to be adopted at the network switch level, though pluggable optics may remain at the compute node level due to their flexibility and compatibility with various system configurations.

Ultimately, CPO will reshape AI interconnect architecture by improving data movement, reducing bottlenecks, and allowing for higher efficiency and scalability in next-generation AI systems. The future will likely see direct optical connections, eliminating compute switches and increasing bandwidth for AI workloads, though the complexity of connections will also rise.

IDTechEx's report on the topic, "Co-Packaged Optics (CPO) 2025-2035: Technologies, Market, and Forecasts", offers an extensive exploration into the latest advancements within co-packaged optics technology. The report delves deep into key technical innovations and packaging trends, comprehensively analyzing the entire value chain. It thoroughly evaluates the activities of major industry players and delivers detailed market forecasts, projecting how the adoption of CPO will reshape the landscape of future data center architecture.

Central to the report is the recognition of advanced semiconductor packaging as the cornerstone of co-packaged optics technology. IDTechEx places significant emphasis on understanding the potential roles that various semiconductor packaging technologies may play within the realm of CPO.

To find out more about this report, including downloadable sample pages, please visit www.IDTechEx.com/CPO 

For the full portfolio of semiconductors, computing and AI market research available from IDTechEx, please visit www.IDTechEx.com/Research/AI 

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Victory PCB is known for its dedication to offering prompt, dependable service without sacrificing quality. The organization enables businesses to proceed with their projects effectively by providing prompt bids, frequently in less than an hour. Whether for prototypes or complete production runs, Victory PCB's quick lead times provide clients an advantage in meeting deadlines.

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