The rapid rise of generative AI is driving continuous growth in demand for high-speed data transmission in data centers. Copper cable solutions, traditionally used for short-distance intra-rack interconnects, are increasingly facing challenges in both transmission density and energy efficiency.

By comparison, Micro LED co-packaged optics (CPOs) offer significantly lower energy consumption per bit of data transmission. TrendForce estimates that the technology could reduce overall power consumption to just 5% of that of copper cable solutions, positioning it as a promising optical interconnect alternative driven by its energy-saving advantages.

TrendForce notes that data transmission speeds below 400 Gbps are already common in CSP-operated data centers. Since 2025, market demand has driven transmission specifications toward 800 Gbps and 1.6 Tbps. However, at these higher speeds, traditional copper cables, which consume over 10 pJ/bit, would substantially raise overall system power consumption, accelerating the industry’s move toward optics replacing copper.

Taking 1.6 Tbps optical communication products as an example, current optical transceiver modules consume around 30W of power. Micro LED CPO architectures substantially lower energy consumption per transmitted bit, potentially reducing total power consumption by up to nearly 20 times to approximately 1.6W. This significantly improves power efficiency while easing difficulties in regard to thermal management.

NVIDIA has already proposed target specifications for its silicon photonics CPO architecture, including ultra-low energy consumption (less than 1.5 pJ/bit), high integration density (more than 0.5 Tbps/mm2), and high reliability, defined as fewer than 10 failures in time (10 FIT)—equivalent to fewer than one failure per billion operating hours.

Within this context, Micro LED CPOs demonstrate unique advantages. By integrating sub-50 µm Micro LED chips with CMOS driver circuits, the architecture can achieve energy consumption of only 1–2 pJ/bit. In scale-up data center networks, the technology is particularly suited for high-speed, short-distance intra-rack interconnects, making it a compelling optical interconnect solution.

TrendForce also observes that the global supply chain is actively expanding into optical communication and interconnect technologies. Microsoft has introduced its MOSAIC architecture, Credo has strengthened the capabilities of its optical interconnects through the acquisition of Hyperlume, and Avicena has developed LightBundleTM to improve data transmission efficiency and power performance.

Taiwanese optoelectronics manufacturers possess strong capabilities in Micro LED fabrication, mature optical design, and light-field control expertise, positioning them well to advance Micro LED as a key light source in optical communications with both efficiency and cost advantages.

Several examples include AUO integrating Micro LED resources from Ennostar with optical receiver technologies from Tyntek; Innolux potentially leveraging integration with best Epitaxy to secure Micro LED supply and gradually build vertically integrated capabilities and competitive barriers; and PlayNitride partnering with Brillink to jointly develop Micro LED optical interconnect technologies.

TrendForce 2025 Micro LED Display and Non-Display Application Market Analysis
Release: 29 May / 30 November 2025
Languages: Traditional Chinese / English
Format: PDF
Page: 119

TrendForce 2026 Infrared Sensing Application Market and Branding Strategies
Release: 01 January 2026
Format: PDF / EXCEL
Language: Traditional Chinese / English
Page: 168