Generative AI is pushing data center interconnectivity towards 800Gbps, 1.6Tbps, and even higher bandwidths, while the energy consumption, density, and heat dissipation limits of traditional copper cables are approaching their ceilings. Micro LED CPO, with its &#34;lower unit energy consumption + higher integration,&#34; is becoming an important variable for the capital market to reprice interconnect technology routes, but the &#34;ultimate solution&#34; still depends on mass production packaging, reliability, and customer adoption pace.
On March 5th, the Micro LED concept in the A-share market saw a significant surge, with stocks like Jucan Optoelectronics, Lianjian Optoelectronics, and Absen hitting the daily limit, as funds focused on new alternative paths for high-speed interconnectivity in data centers.
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According to the latest survey by TrendForce, global large data centers have generally reached transmission speeds of 400Gbps, with demand upgrading to 800Gbps and 1.6Tbps since 2025. The report points out that copper cable solutions face challenges in transmission density and energy efficiency, while Micro LED CPO has lower unit transmission energy consumption and is expected to become an alternative for optical interconnects, rewriting the cost and power consumption trade-offs between &#34;optical and copper&#34; in short-distance interconnect scenarios.
Notably, Tianfeng Securities cited a report last year that referenced the MOSAIC solution proposed by Microsoft's research team and Microsoft Azure, attempting to break the trade-off dilemma between optical and copper using Micro LED's &#34;wide and slow&#34; architecture, and pointed out that if CPO technology is further adopted, the system-level power consumption advantages of Micro LED links are expected to be amplified.
<h2>Copper Cable Shortcomings Exposed, Energy Consumption and Distance Become Expansion Bottlenecks</h2>
TrendForce believes that the large-scale application of generative AI has led data centers into a compute-intensive phase, significantly accelerating the upgrade speed of interconnect bandwidth. As transmission speeds evolve to 800Gbps and above, the losses and system energy consumption issues of copper cables at high frequencies become increasingly difficult to avoid.
Energy consumption pressure is directly transmitted to the operational side. According to TrendForce's data, when traditional copper cables reach a transmission speed of 1.6Tbps, the unit transmission energy consumption exceeds 10pJ/bit, while the corresponding optical transceiver module power consumption can reach about 30W, which not only increases operational costs but also brings heat dissipation pressure.
The report also points out that energy costs in data centers now account for more than 30% of operational costs, with transmission system energy consumption accounting for nearly 20%, making interconnect energy efficiency one of the key constraints for further expansion of compute clusters.
Tianfeng Securities further emphasizes in the report that there is a fundamental trade-off between transmission distance, power consumption, and reliability in link technology. Copper cable links are energy-efficient and highly reliable, but their transmission distance is extremely limited (&lt;2m). Even with active copper cables, the distance is expected to only increase to 5 to 7m, and continued bandwidth increases will exacerbate the challenges.
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<h2>Core Selling Point of Micro LED CPO: Unit Energy Consumption Reduced to 1 to 2 pJ/bit</h2>
In the context of &#34;bandwidth leap + energy consumption rigidity,&#34; TrendForce has positioned Micro LED CPO as a route with replacement potential. The key lies in the deep integration of Micro LED chips below 50 microns with CMOS driver circuits, and under the CPO architecture, the optical devices are co-packaged with switching chips and driver circuits to shorten signal paths, reduce losses, and enhance stability.
Research by TrendForce shows that the unit transmission energy consumption of Micro LED CPO can be reduced to 1 to 2 pJ/bit, only 5% of traditional copper cable solutions. Taking 1.6 Tbps optical communication products as an example, the power consumption of traditional optical transceiver modules is about 30W, while the overall power consumption can be reduced to about 1.6W with the Micro LED CPO architecture, a reduction of nearly 95%, which has direct significance for data center cooling and cabinet power density constraints.
Density and reliability are also reasons why this solution is being bet on. TrendForce points out that Micro LED chips have characteristics such as long lifespan, fast response speed, and strong anti-interference ability. Coupled with the high integration of CPO, it can achieve transmission densities of over 0.5 Tbps/mm², saving cabinet space and better meeting high-density deployment needs.
<h2>From MOSAIC to CPO: Pluggable Verification and System-Level Power Reduction Pathways</h2>
In a report, Tianfeng Securities cited the MOSAIC solution launched by the Microsoft research team and Microsoft Azure, proposing to use Micro LED as the transmitter and CMOS sensors as the receiver, adopting a WaS (wide-and-slow) architecture to replace a few high-speed channels with a large number of parallel low-speed channels, thereby reducing reliance on lasers, ADC/DAC, complex DSP, and FEC.
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The report states that the Microsoft team built an end-to-end prototype system containing 100 channels, each with 2 Gbps, and tests showed that MOSAIC can maintain stable transmission capability over a distance of 30 meters, with simulation data indicating a reachable distance of over 50 meters. In terms of power consumption, the prototype link data provided in the report shows that the MOSAIC digital backend consumes only 0.4W, with the entire end consuming about 3.1 to 5.3W, while mainstream optical links consume 9.8 to 12W.
MOSAIC also presents the expansion method of &#34;increasing channels and reducing single-channel rates.&#34; Based on 2 Gbps/channel calculations, 800 Gbps unidirectionally would require about 400 Micro LED channels, excluding redundancy; with the addition of lightweight ECC, the number of channels can increase to 460, and further configuration of hot backup channels can enhance reliability. Tianfeng Securities also pointed out that if CPO technology is adopted, MOSAIC will gain greater benefits, as the inter-chip interconnection data rate is lower, allowing for direct driving of Micro LED modulation, reducing power consumption and complexity caused by high-speed conversions
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<h2>Industry Chain Focus: Epitaxy and Chips, Mass Transfer, Advanced Packaging, and Optical Components</h2>
If Micro LED CPO moves towards commercialization, the incremental growth will not only be in &#34;light source replacement&#34; but also in the systematic drive for manufacturing and packaging capabilities. Three highly sensitive links are worth noting: upstream epitaxial wafers and chips, midstream mass transfer and advanced packaging, as well as supporting optical and receiving end devices.
<ul>
<li>As a leading domestic compound semiconductor company, Sanan Optoelectronics has the largest Micro LED epitaxial wafer production capacity in China and has established a 6-inch large-scale production line. Its subsidiary, Sanan Integrated, has the capability for optical communication chip foundry, and related products have entered the verification stage with major clients.</li>
<li>HC Semitek is described as a first-tier domestic Micro LED chip technology company, possessing the world's first 6-inch Micro LED large-scale production line with a production yield exceeding 90%. Its optical communication samples aimed at short-distance optical interconnects for AI servers have been sent to major clients for verification.</li>
</ul>
From the component perspective, Tianfeng Securities believes that if the MOSAIC solution scales up, Micro LED, multi-core imaging optical fibers, TIR lenses, CMOS sensors, and Micro LED optical connectors will become the main beneficiaries

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Micro LED CPO, through co-packaged optics and parallel low-speed channel architecture, can reduce the unit transmission energy consumption to 1–2 pJ/bit, significantly lowering power consumption in data centers and enhancing interconnection density. As solutions like Microsoft's MOSAIC validate its feasibility, Micro LED optical interconnect is becoming a potential technological route of interest in the capital market, with opportunities in the industry chain concentrated in areas such as epitaxial chips, mass transfer, and advanced packaging

- The article discusses the advancement of Micro LED CPO technology as a significant alternative to traditional copper cabling in data centers, highlighting its lower energy consumption and higher integration capabilities.  
- It notes that data center transmission speeds are rapidly approaching 800 Gbps and 1.6 Tbps, while the energy efficiency of copper cables is declining, leading to rising operational costs.  
- Key players in the Micro LED space are positioned for growth, with innovations in manufacturing and packaging likely to drive future successes in this field.

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Power consumption plummets by 95%, breaking the dilemma of light and copper trade-offs... Will Micro LED CPO be the ultimate solution?