Next-generation optical interconnect solutions promise lower power consumption and faster intra-rack communication for future AI data centres.
Global demand for high-speed optical connectivity is accelerating as generative artificial intelligence workloads reshape data-centre architecture, according to new research from market analyst firm TrendForce. The firm projects that the micro-LED co-packaged optics (CPO) optical transceiver market will grow rapidly, reaching an estimated value of $848 million by 2030.
Micro-LED technology is gaining attention for its ability to deliver ultra-efficient data transmission, offering power consumption levels as low as 1–2 picojoules per bit and extremely low bit-error rates. These performance advantages position micro-LED CPO as one of the emerging solutions for short-distance, high-speed intra-rack communication within scale-up data-centre networks, alongside active electrical cables (AEC) and vertical-cavity surface-emitting laser (VCSEL)-based near-packaged optics.
Major technology companies across the global supply chain are increasingly investing in optical interconnect technologies. Microsoft has introduced its MOSAIC micro-LED CPO architecture, while MediaTek is expanding into integrated active optical cable solutions. Optical connectivity specialist Credo Technology Group strengthened its portfolio through the acquisition of Hyperlume in the third quarter of 2025.
Startup Avicena is advancing ultra-low-power optical communication with its LightBundle technology, preparing to introduce a 512Gbps micro-LED optical interconnect solution, followed by an upgraded 896Gbps version expected in 2026.
Meanwhile, ams OSRAM has entered a development partnership with a global AI data-centre infrastructure provider to accelerate commercialization efforts. Its integrated solution — combining micro-LED chips, optical components, and dedicated ASICs — is targeted for launch around 2027.
In Taiwan, display makers AUO and Innolux are advancing micro-LED optical integration through collaborations with ecosystem partners, while PlayNitride is expanding into optical interconnect applications. In China, HC Semitek is working with Shanghai New Vision Microelectronics to develop related technologies.
TrendForce notes that although industry alliances are forming quickly, product standardization and customer validation will take time. Large-scale shipments of micro-LED CPO optical transceivers are therefore expected to accelerate in the second half of 2028, paving the way for substantial market growth by the end of the decade.
