Power Consumption Slashed by 95%! Only 5% of Copper Cables! How Display Black Tech Is Shaking the AI Computing World
sourcewww.lightingchina.com.cn
time2026/03/18
- It has not only become a new favorite in the capital market but also opened up a hundred-billion-level growth opportunity for the entire LED industry.
Recently, the A-share MicroLED sector has seen a lot of limit-up rallies, with concept stocks such as Sanan Optoelectronics and HC Semitek continuing to strengthen, becoming one of the hottest capital magnets outside the AI computing track.
What has ignited this surge is not the familiar iteration of display technologies, but a disruptive breakthrough capable of reshaping the underlying architecture of AI data centers—MicroLED CPO technology. This innovation can reduce optical transmission power consumption to just 5% of traditional copper cable solutions, cutting overall energy consumption by 95% and boosting energy efficiency by nearly 20 times.
With the explosive popularity of phenomenon-level AI agents such as OpenClaw (nicknamed “Little Lobster”), and the rapid deployment of multimodal AI applications, global demand for AI computing power is growing exponentially. Energy consumption concerns in data centers are approaching a critical threshold.
At a time when the entire industry is struggling with the dilemma of high-speed transmission versus power consumption control, MicroLED CPO has entered the AI optical communication field from the LED display sector with overwhelming energy-saving advantages. It has not only become a new favorite in the capital market but also opened up a hundred-billion-level growth opportunity for the entire LED industry.
MicroLED CPO Breaks the Energy Deadlock of AI Computing in One Move
The explosive growth of AI computing power is placing unprecedented pressure on data centers in terms of both transmission speed and energy consumption. According to the latest report from TrendForce, data transmission standards of ≤400 Gbps have already been widely adopted in data centers of global cloud service providers. Since 2025, market demand has continued to push transmission speeds toward 800 Gbps and even 1.6 Tbps, bringing the contradiction between high-speed transmission and energy consumption control to a critical point that must be resolved.
Under the ultra-high transmission requirement of 1.6 Tbps, the shortcomings of traditional solutions have become increasingly evident. Conventional copper cable solutions consume more than 10 pJ/bit, leading to exponential growth in overall system energy consumption. Even the current mainstream optical transceiver module solutions still have a power consumption of around 30W per module. Industry data shows that in large-scale data centers, optical modules alone account for over 25% of total power consumption, becoming a critical bottleneck that restricts the large-scale deployment of AI computing clusters. As a result, the industry trend of “replacing copper with optics” is being rapidly accelerated.
Against this backdrop, MicroLED CPO has introduced a disruptive solution. By integrating MicroLED chips smaller than 50 microns with CMOS driver circuits, this technology can achieve an ultra-low energy consumption of just 1–2 pJ/bit, perfectly aligning with the core low-power target of <1.5 pJ/bit proposed in silicon photonics CPO specifications by NVIDIA.
The most striking figures are as follows: taking a 1.6 Tbps optical communication product as an example, after adopting the MicroLED CPO architecture, overall power consumption can be reduced dramatically from around 30W for traditional optical transceiver modules to approximately 1.6W—only 5% of conventional solutions, with energy efficiency improved by nearly 20 times.
The real-world impact is even more compelling: for a 100,000-GPU cluster, if inter-rack connections fully adopt the MicroLED CPO solution, it can save about 15 million kWh of electricity per year, equivalent to reducing approximately 12,000 tons of carbon emissions. This fundamentally alleviates power consumption and heat dissipation pressures in AI data centers, while directly cutting massive operational costs.
Why Can Power Consumption Drop by 95%? The Core Logic of MicroLED CPO Explained
At its core, MicroLED CPO is the deep integration of micron-scale light-emitting diodes (MicroLEDs) with co-packaged optics (CPO) technology. This combination delivers a breakthrough where 1 + 1 > 2, and is widely regarded in the industry as CPO 2.0, clearly distinguishing it from the earlier “laser + CPO” (CPO 1.0) approach.
Let’s first look at CPO (Co-Packaged Optics). Its core value lies in integrating the optical engine with the ASIC switch chip within the same package, thereby shortening the electrical channel distance between the optical module and the switch chip. This effectively suppresses high-frequency signal attenuation and electromagnetic interference, addressing the key issues of signal integrity degradation and soaring bit error rates in traditional pluggable optical modules at speeds above 1.6 Tbps. In recent years, CPO has gradually entered large-scale commercial deployment. However, constrained by the modulation bandwidth and thermal management limitations of traditional VCSEL lasers, the CPO architecture has long been forced to compromise among speed, power consumption, and packaging density, leaving its full physical potential untapped.
The introduction of MicroLED directly solves this core challenge at the light source level. Traditionally known for display applications, MicroLEDs—featuring micron-scale pixel size, nanosecond-level response speed, and ultra-high luminous efficiency—provide an ideal light source for optical interconnects. Compared with conventional edge-emitting lasers (EEL) and vertical-cavity surface-emitting lasers (VCSEL), MicroLEDs offer smaller emission areas, lower driving voltage, and higher modulation bandwidth, enabling a leap in optical signal generation efficiency by an order of magnitude.
From a fundamental perspective, the gap between the two can be described as a dimension-reducing advantage:
Traditional lasers are like “large searchlights”—with millimeter-scale sizes, high lasing threshold currents, and driving currents typically exceeding 200 mA. They also require high-power TIA and DSP chips, resulting in energy consumption generally above 1.2 pJ/bit. At temperatures above 85°C, they exhibit significant wavelength drift and efficiency degradation, making them heavily reliant on high-power thermoelectric cooling systems.
In contrast, MicroLEDs function more like arrays of hundreds or even thousands of “mini flashlights.” Each chip is smaller than 50 microns and can be integrated with CMOS driver circuits for high-density parallel optical emission. Every MicroLED corresponds to an independent data channel, requiring only microamp-level ultra-low driving current, with no need for additional modulators. The transmitter-side energy consumption can be as low as 80 fJ/bit (1 pJ = 1000 fJ).
At the same time, MicroLEDs operate across a wide temperature range from -40°C to 125°C, maintaining over 90% optical output even at 85°C, eliminating the need for TEC (thermoelectric cooling). This fundamentally resolves the heat dissipation challenges brought by high integration in CPO architectures.
It is important to note that MicroLEDs for optical communication differ fundamentally from display-grade MicroLEDs. Display applications primarily use visible light wavelengths with modulation bandwidths typically below 10 GHz. In contrast, optical communication MicroLEDs must operate at specific wavelengths such as 850 nm and 1310 nm, requiring per-channel modulation bandwidths above 50 GHz. This places entirely different demands on epitaxial materials, chip design, and thermal management, meaning it is not a simple extension of display technology.
Why Can Power Consumption Drop by 95%? The Core Logic of MicroLED CPO Explained
In overseas markets, Microsoft has introduced the MOSAIC architecture, adopting a “wide and slow” optical link design. Its 800G prototype has already been successfully tested and remains backward compatible with existing interfaces.
NVIDIA has not only defined key targets for silicon photonics CPO—low power consumption, miniaturization, and high reliability—but has also reserved standardized integration interfaces for CPO solutions in its latest AI computing platforms such as GB200 and Blackwell. At the same time, it has invested $4 billion in optical technology companies Lumentum and Coherent Corp., making a strong strategic bet on optical interconnects.
TSMC has opened its 3D Fabric advanced packaging platform and is collaborating with U.S. startup Avicena to manufacture MicroLED-based interconnect products. Meanwhile, MediaTek has independently developed MicroLED light source technology and plans to showcase its active optical cable solution at the upcoming OFC conference in April.
On the hardware front, Samsung has completed development of a 100 Gbps single-channel optical interconnect prototype based on MicroLED, while Sony has validated the technology in automotive optical interconnect scenarios.
China’s domestic industry chain is not lagging behind in this wave of transformation. Leveraging the world’s most complete MicroLED industrial ecosystem, Chinese companies have already achieved key technological breakthroughs and are now transitioning from sample validation to small-scale mass production. The year 2026 is widely regarded by the industry as the starting point for the accelerated realization of domestic substitution.
Among them, San’an Optoelectronics, in collaboration with Tsinghua University and China Mobile, has achieved major breakthroughs in MicroLED optoelectronic devices and high-speed optical communication. They have successfully developed a MicroLED light source device with high-speed modulation capability. Test results show its 3 dB modulation bandwidth exceeds 7 GHz, and based on communication models, NRZ-OOK data transmission rates are expected to surpass 10 Gb/s, laying a critical technical foundation for short-distance high-speed optical interconnects. Meanwhile, MTC (Zhaochi Co., Ltd.) has also realized the commercialization of related technologies, completing the industry’s first development and production of MicroLED-based products.
In the traditional display sector, leading Chinese companies such as Ledman Optoelectronic, Leyard, and Unilumin have already established a strong presence in MicroLED display panels and modules, continuously driving down costs and accelerating technological iteration.
Meanwhile, in the core components and equipment segments, domestic enterprises are rapidly advancing key technologies such as mass transfer, driver ICs, and full-color chip development, breaking through industry bottlenecks and laying a solid foundation for the large-scale commercialization of MicroLED technology.
Beyond Optical Communication! Three Major MicroLED Tracks Unlock a Trillion-Dollar Opportunity
This wave of breakthroughs in MicroLED CPO is not only opening up an entirely new growth market in optical communication, but also pushing the entire MicroLED industry to the brink of multi-scenario commercialization. Three core tracks are now emerging with clear and highly certain growth potential.
1. MicroLED CPO Optical Communication: The Second Growth Curve Driven by AI Computing
This is the core focus of the current industry boom, with growth driven by technological transformation fueled by AI computing demand. With its extreme energy-saving advantage—reducing power consumption to just 5% of copper cable solutions—MicroLED CPO has become an ideal optical interconnect solution for short-distance, high-speed transmission within racks, perfectly aligning with the needs of vertically scaled AI data center networks. As global AI clusters continue to expand, this sector is set to become the most promising second growth curve for the MicroLED industry, where companies with early technological positioning will gain a first-mover advantage in the localization of optical interconnects.
2. MicroLED Display Panels & Modules: From High-End Commercial to Consumer Explosion, Shipments to Grow 9× in 3 Years
As the traditional core application of MicroLED technology, this sector is reaching a critical turning point—from high-end commercial use to broader consumer adoption. Industry data shows that total MicroLED display shipments doubled in 2024 and are expected to grow ninefold by 2026. On one hand, Samsung and LG continue expanding their ultra-large MicroLED TV product lines, while leading Chinese companies accelerate market entry, driving prices down and increasing awareness. On the other hand, breakthroughs in glass-based MicroLED technology have solved mass production bottlenecks for small pixel pitch displays, accelerating adoption across smartwatches, AR smart glasses, high-end automotive HUDs, and 100-inch+ ultra-premium TVs.
3. MicroLED Core Components, Materials & Equipment: The Strategic High Ground for Localization
This segment forms the foundation of the entire industry, covering chips, mass transfer equipment, driver ICs, and key materials. Its core investment logic lies in high technical barriers and urgent demand for domestic substitution. Whether in optical communication or display applications, commercialization depends on breakthroughs in core technologies—such as efficiency improvements in red MicroLED chips, yield breakthroughs in mass transfer processes, and localization of high-frequency driver ICs. These high-value segments will capture the largest share of industry value, and companies with strong R&D capabilities and patent portfolios will continue to benefit throughout the industry’s rapid expansion.
Behind the Boom: The Real Challenges to Industrialization Must Be Clearly Understood
Although MicroLED CPO demonstrates disruptive advantages in theory and has attracted significant attention from the capital market, from an industrial perspective, its large-scale commercialization still faces multiple core challenges, making widespread adoption difficult in the short term.
First, bottlenecks in core technology breakthroughs. For optical communication, MicroLED still faces challenges in material systems, wavelength matching, and high-frequency modulation. At present, samples above 50 GHz are largely still in the validation stage, and thermal management issues of InP-based MicroLEDs under high-frequency driving remain unresolved. In addition, MicroLED optical coupling requires nanometer-level alignment, with extremely low process tolerance—coupling accuracy must be controlled within ±1–2 microns, otherwise efficiency losses can exceed 30%, placing exceptionally high demands on packaging processes.
Second, constraints in mass production processes and cost. Mass transfer technology is the key to large-scale MicroLED manufacturing. It requires transferring millions or even hundreds of millions of micron-scale LED chips onto driver backplanes with high speed and precision. Any deviation can significantly reduce yield and drive up costs. Currently, multiple technical approaches are still under development and have not yet reached mature large-scale application. High R&D and manufacturing costs remain a major barrier to widespread adoption.
Third, commercial reliability and application limitations. Data center optical interconnects demand far higher reliability than display applications. Devices must operate under high temperature, high humidity, and continuous full-load conditions, with optical power degradation below 0.1% per 1,000 hours and lifespans exceeding 25 years, posing stringent requirements on environmental durability. Meanwhile, due to the broad spectrum and high dispersion characteristics of LEDs, MicroLED CPO is currently limited to short-range interconnects within 50 meters. For medium- to long-distance scenarios—such as inter-data center or metropolitan networks—traditional optical modules are still անհրաժեշտ to complement it.
Industry experts generally predict that MicroLED CPO will require 3–5 years to truly enter large-scale commercialization. Even under the most optimistic outlook, widespread deployment is unlikely before 2027.
A New Era for the Industry: Opportunities for Leapfrogging in China's LED Sector
Guotai Haitong Securities points out that if the MicroLED industry can continue to achieve breakthroughs in two key areas—reducing the cost of large-scale mass production and advancing the technical feasibility of optical interconnect applications—it is expected that, starting from 2026, the industry will see comprehensive expansion across application scenarios. The adoption will gradually extend from smartwatches and AR smart glasses to ultra-large, high-end TVs, commercial displays, premium in-vehicle HUDs, and short-range communication for AI computing servers, driving a leapfrog growth in market scale.
For China's LED industry, which has been deeply cultivated over many years, the emergence of MicroLED CPO technology is far from a mere short-term hype in the capital market. It represents a historic opportunity for the industry to expand from the display sector into the broader field of optoelectronics. In the display domain, China has already built the world's most complete LED industrial chain, with a solid industrial foundation and deep technical accumulation. Meanwhile, in the entirely new track of optical interconnects, global industries are still at the early stages of R&D and industrialization. Chinese companies and international giants are starting from the same line, presenting an excellent opportunity for leapfrogging.
With the continuous rise in AI computing demand and collaborative breakthroughs across upstream and downstream industry chains, MicroLED technology will steadily overcome industrialization bottlenecks. It will not only reshape the technical landscape of data center optical interconnects with a disruptive 95% reduction in power consumption but also propel China's LED industry into a new era of cross-industry integration and high-quality development. As a professional media outlet dedicated to the LED and lighting sector, China Lighting Network will continue to follow the industrialization progress of MicroLED technology, witnessing the breakthroughs and growth of China's LED industry in this new round of global technological transformation.