The next stop for AI computing power surge: MicroLED CPO

Recently, the concept of Micro LED CPO (co-packaged optics) has continued to surge in popularity in the global technology and capital markets. As a next-generation short-distance optical interconnect technology with high hopes, it has not only triggered a scramble for deployment by international giants, but also led to a craze for cross-border deployment by many domestic companies. So, why can Micro LED CPO be on the forefront at this moment? How will it reshape the future computing power landscape?

Interconnection Anxiety and Physical Limits under Soaring AI Computing Power

Simply put, the emergence of Micro LED CPO is to solve the problems caused by the surge in AI computing power demand.

In the era of rapid development of AI, as the core infrastructure for large artificial intelligence model training, intelligent computing clusters and data centers (Intelligent Computing Cluster or AI Cluster) are facing increasingly severe challenges in the efficiency and performance of huge data transmission.

According to the "White Paper on Optical Interconnect Technology for Large-Scale Intelligent Computing Cluster Scenarios" published by China Mobile in 2025, with the accelerated development of general artificial intelligence, large-scale model technology generally follows the law of expansion. The parameter scale of intelligent computing clusters increases approximately 400 times every two years, driving chip computing power to increase approximately three times every two years.

However, the improvement of computer interconnection speed is extremely slow, only increasing by 1.4 times every two years. The evolution of interconnection capabilities seriously lags behind the explosion of computing power, resulting in extremely high communication overhead and becoming the core bottleneck for the linear growth of ultra-large-scale cluster computing power with the number of chips.

TrendForce’s latest survey points out that with the rise of generative AI, the demand for high-speed transmission in data centers continues to increase. Copper cable solutions originally used for short-distance transmission in cabinets will face severe challenges in terms of transmission density and energy saving. Under the premise of pursuing high transmission rates, since the energy consumption of traditional copper cables exceeds 10 pJ/bit, the overall system energy consumption will increase significantly.

Copper cable solutions have reached their limits in terms of speed, power consumption, distance and physical space. The industry is actively seeking to shift to higher-speed and low-loss interconnection technology, so optical interconnection has entered the industry's field of vision.

TrendForce Research believes that the focus of future GPU design will shift to higher-density chip interconnection and higher-speed data transmission. In-cabinet chip interconnection and cross-cabinet large-scale interconnection will become core issues in planning data centers. Limited by physical limitations, copper cable solutions cannot cope with ultra-large-scale data transfer needs, prompting the industry chain to accelerate the "advancement of optical fiber and the retreat of copper". As a result, optical transmission solutions will gain broad space for development.

What is CPO? What is Micro LED CPO?

In order to solve the problem of mismatch between traditional copper cables and the computing power requirements of the AI ​​era, the industry has proposed optical interconnection technologies, which include: Near Package Optics (NPO), Co-Packaged Optics (CPO), and Optical Input/Output (OIO). Among them, CPO is one of the routes that has attracted much attention at present.

In traditional network connections, the optical module is inserted into the front panel of the device, and the electrical signal needs to travel a dozen centimeters or more on the circuit board to reach the computing chip. CPO, on the other hand, directly packages the optical engine responsible for photoelectric conversion and the computing chip (such as GPU or switching chip) next to each other on the same substrate.

In this way, the transmission distance of electrical signals is greatly shortened from centimeters to a few millimeters. This physical structure not only greatly improves the interconnection bandwidth density, but also reduces the power consumption of the entire device by about 50% by eliminating lengthy electrical link losses.

CPO Structure (Source: "White Paper on Optical Interconnect Technology for Large-Scale Intelligent Computing Cluster Scenarios")

Regarding the market prospects of CPO technology, TrendForce has given a positive forecast. It is estimated that the penetration rate of CPO in AI data center optical communication modules will grow year by year, with a chance to reach 35% in 2030.

Source: TrendForce

In the CPO light source technology route, in addition to the mainstream silicon photonics integration solutions and VCSEL (vertical cavity surface emitting laser) solutions, Micro LED is emerging as an emerging optical interconnection light source. Compared with other solutions, Micro LED CPO has demonstrated extremely unique physical and architectural advantages in meeting the ultra-short distance and high-density interconnection requirements in intelligent computing center cabinets.

First, the Micro LED solution brings about architectural subversion: replacing “narrow and fast” with “wide and slow”. Traditional interconnect technologies (including electrical interconnects and partially laser-based optical interconnects) usually rely on "narrow and fast" architectures, that is, transmitting data through a very small number of high-bandwidth channels, which not only requires extremely complex driving circuits and digital signal processors (DSP), but also places stringent requirements on the heat generation and reliability of the light source.

The Micro LED solution is completely different. It is naturally suitable for building two-dimensional high-density arrays and can adopt a "wide and slow" communication mode. For example, the MOSAIC architecture launched by the Microsoft team uses hundreds of low-speed parallel Micro LED channels (such as single channel 2Gbps) to replace a few high-speed channels, and can easily achieve a total throughput of 800Gbps or 1.6Tbps through the stacking of "numbers".

Second, the ultimate energy efficiency performance. Under the premise of pursuing high transmission rates, the energy consumption of traditional copper cables usually exceeds 10 pJ/bit, while the unit transmission energy consumption of the Micro LED CPO solution is extremely low. By integrating chip sizes below 50 microns and CMOS drive circuits, Micro LED can achieve ultra-low energy consumption of only 1 to 2 pJ/bit or even sub-pJ/bit.

This means that the Micro LED CPO solution can significantly reduce the overall interconnection energy consumption to about 5% of the traditional copper cable solution, thereby greatly alleviating the heat dissipation pressure and operating costs of the intelligent computing center.

Third, ultra-high bandwidth density. Micro LED supports multi-channel parallel and spatial division multiplexing technology, and its bandwidth density can easily exceed 1 Tbps/mm2. This high-density array feature makes it more suitable for the stringent requirements of massive data concurrency among GPU nodes in the cluster.

Fourth, excellent reliability and compatibility. Micro LED has a simpler structure than traditional lasers, is extremely insensitive to temperature changes, and its system reliability is 100 times higher than current optical links. At the same time, Micro LED optical signals are not subject to electromagnetic interference and are highly compatible with CMOS processes, making it easy to carry out high-density heterogeneous integration with logic chips.

Example of AVICENA Micro LED’s optical interconnection engine solution

Overview of the global Micro LED optical interconnection industry layout

In the era of AI, Micro LED has become a key solution to meet the computing power needs of large AI models that continue to grow rapidly due to its obvious technical advantages in the field of optical interconnection. Therefore, in recent years, more and more LED companies and technology giants have accelerated their deployment in the field of Micro LED optical interconnection technology, hoping to seize the opportunities brought by AI artificial intelligence.

In the international market, technology giants and innovative companies have formed a close ecological circle. For example, Mojo Vision, an American Micro LED microdisplay technology company, recently reached a long-term strategic cooperation with semiconductor giant Marvell;

Avicena, a developer of Micro LED optical interconnection technology, not only cooperates with ams OSRAM to promote the mass production of GaN Micro LED arrays, but also cooperates with TSMC to jointly produce optical interconnection products based on Micro LED.

Image source: Avicena

French microelectronics research center CEA-Leti launched a three-year multilateral cooperation project in November last year to promote Micro LED optical data links from the laboratory to commercial mass production. As the popularity of Micro LED optical interconnection technology increases, CEA-Leti may accelerate related project cooperation.

In the domestic market, although domestic companies started a little late in the field of Micro LED optical interconnection, they have shown strong development momentum. Major LED chip, panel and packaging companies are relying on existing production capacity to accelerate transformation.

In the core optical chip segment, Zhaochi Technology, relying on its accumulation in the fields of LED epitaxial growth and mass transfer, recently announced that its Micro LED light source chip for Micro LED optical interconnection CPO technology has successfully completed research and development and is officially in the sample verification and testing stage. It is reported that Zhaochi has formed a vertical industrial chain layout from optical chips, optical devices to optical modules, and has a highly differentiated competitive advantage.

BOE Huacan Optoelectronics and Sanan Optoelectronics have also successively carried out research and development and sample delivery testing of Micro LED optical interconnection technology products; in addition, Xinyuanji Semiconductor has also relied on its independently developed 4-6-inch DPSS GaN epitaxial platform to realize a communication-grade GaN light-emitting chip with a single-channel modulation rate exceeding 8 Gbps.

At the level of industry chain collaboration, BOE Huacan Optoelectronics and display chip design company Xixiang Micro officially signed a strategic cooperation agreement to develop low-power, high-bandwidth Micro LED optical interconnect modules suitable for intelligent computing centers.

Nitron Technology has joined forces with Brillink, a member of the World Core ecosystem, to jointly develop an AI optical interconnect platform that consumes less than 1 pJ/bit and has a bandwidth density of Tbps/mm2, striving to replace traditional active cables (AEC).

At the same time, established panels and consumer electronics giants are also crossing over with innovative attitudes. AU Optronics Chairman Peng Shuanglang clearly pointed out that AU Optronics is leveraging its 30 years of glass manufacturing experience and Micro LED mass transfer technology to strongly enter the short-distance transmission market of silicon photonics CPO through advanced packaging processes such as redistribution layer (RDL) and through glass via (TGV).

Earlier this year, MediaTek also disclosed a new active optical fiber cable (AOC) solution based on independently developed Micro LED light source technology. Just recently, MediaTek announced that it has developed a next-generation Active Optical Cable (AOC) using miniaturized Micro LED light sources with Microsoft.

Summary

Although Micro LED optical interconnect technology has shown great potential to reshape the underlying architecture of the data center, it still takes time to overcome a series of technical and industrial implementation problems from the laboratory to large-scale mass production. However, as AI artificial intelligence technology continues to develop rapidly in the future, it is believed that more companies will enter the Micro LED optical interconnection industry chain and accelerate the implementation of the technology.

In terms of commercialization timetable, according to analysts at TrendForce, most of the technical solutions are currently in the early stages of design and reliability testing. It is expected that under extremely smooth conditions, small-scale commercial introduction of optical communication applications in cabinets will be realized in two to three years (that is, between 2026 and 2027). By then, Micro LED optical interconnection technology will officially usher in its first year of development.

All in all, in the era of AI computing power and data center changes, Micro LED is completely breaking the traditional application boundaries of "ultimate display". Through the optical interconnection characteristics of low power consumption and high bandwidth density, Micro LED not only provides a highly cost-effective alternative path for the "optical advancement of copper and exit" of intelligent computing clusters, but is also expected to drive scale effects and cost optimization of the entire semiconductor and optoelectronic industry through feedback from non-display applications.

For Micro LED optical interconnection technology, senior analysts in the LED industry will soon bring the most detailed and professional prospect analysis.

At the TrendForce 2026 New Display Industry Seminar (DTS) held on April 22, Qiu Yubin, TrendForce’s senior deputy general manager of research, will give an in-depth analysis of the development status and trends of Micro LED in both display and non-display directions under the theme of “Micro LED Cross-border Integration: Dual-Track Development of AI Display and Optical Communications”. We sincerely invite everyone to sign up to listen to the latest development trends in the LED industry! (Text: LEDinside Irving)

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