Next-Gen Micro LED CPO May Cut Data Center Interconnect Power by 95%

As generative AI drives demand for faster data transmission, traditional copper cabling used for short-distance intra-rack connections in data centers is facing growing limitations in both transmission density and energy efficiency, according to a new report from TrendForce.

Micro LED co-packaged optics (CPO) is emerging as a promising alternative.

TrendForce estimates the technology could reduce transmission energy consumption to just 5% of that required by copper interconnects, offering significant energy savings for next-generation data centers.

Data centers operated by cloud service providers have already widely adopted transmission speeds of 400Gbps and below, but since 2025, demand has increasingly shifted toward 800Gbps and 1.6Tbps. At these higher speeds, copper solutions, typically exceeding 10 pJ/bit in energy consumption, significantly increase overall system power usage, accelerating the transition from copper to optical interconnects.

For example, current 1.6Tbps optical transceiver modules consume around 30W. By contrast, Micro LED CPO could lower total power consumption to about 1.6W, nearly a 20-fold reduction, easing both energy and thermal management challenges.

Major industry players are also accelerating the development of optical interconnect technologies. NVIDIA has proposed silicon photonics CPO targets including sub-1.5 pJ/bit power consumption, high integration density, and ultra-high reliability.

TrendForce notes that global supply chains are actively investing in optical interconnect technologies, with initiatives such as Microsoft’s MOSAIC architecture and new developments from companies like Credo Technology Group and Avicena.

Taiwanese manufacturers, including AUO, Innolux, and PlayNitride, are leveraging their Micro LED manufacturing expertise to position the technology as a highly efficient and cost-competitive optical light source for future data center interconnects.