Why Optical Interconnects Are Overtaking Copper in Data Centers

Background: Data Growth and Copper Limits

Rapid advances in AI, cloud computing, and 5G are causing global data traffic to surge exponentially. IDC predicts that by 2025 total data will exceed 175 ZB, and data‑center bandwidth demand will double every two years. At 224 Gbps, copper cables can only transmit reliably over about 1 m, with rising power consumption and signal‑integrity challenges.

Bandwidth Bottleneck of Copper Interconnects

According to LightCounting, the optical‑module market will grow at a 14 % CAGR from 2023‑2027, with modules above 224 Gbps accounting for over 60 % of shipments. Historically, Ethernet front‑ends used optical links, while internal data‑center expansion relied on copper. However, copper back‑plane cables lose effective distance as speeds increase: at 112 Gbps the distance is ~2.5 m, dropping to ~1 m at 224 Gbps.

Current Copper‑Based Solutions

Direct‑Attach Copper (DAC)

Active Electrical Cable (AEC)

Active Optical Cable (AOC)

While DAC and AEC dominate short‑range high‑speed links, optical interconnects are the clear long‑term direction because they support longer distances and higher bandwidth.

Latency Considerations

Optical links introduce higher latency than copper due to Reed‑Solomon (RS) coding and Hamming error correction. For latency‑sensitive operations such as loading and storage, copper remains preferable, whereas latency‑tolerant tasks like data partitioning and distribution increasingly adopt optical solutions.

Power‑Efficiency Trade‑off

Active optical modules consume 2.5–4 × the power of comparable active‑copper modules because of additional components like laser drivers and transimpedance amplifiers (TIA). Despite higher power, the demand for optical interconnects grows as they enable higher data rates and longer reaches; research focuses on reducing this power gap.

Rise of Linear Optical Interfaces

Since the early 2010s, linear optical interfaces (especially at 10 Gbps) have been discussed, but only recently have they seen widespread adoption. Higher data rates and the limitations of traditional retimed interfaces have revived interest in directly‑driven linear optics.

Figure 1: Energy comparison of linear driver optics (source: OFC 2023 – Innovating Networks for AI workloads).

Linear Driver Optics vs. Traditional Retimed Interfaces

Traditional retimed interfaces use DSP chips to drive optical components, adding complexity and latency. Linear driver optics eliminate the need for intermediate DSPs by integrating analog and mixed‑signal design directly into the host’s SerDes, simplifying the signal path, reducing latency, and lowering power consumption.

At 112 Gbps, linear driver optics can directly interface with optical components, delivering a clean, high‑fidelity signal path. This is achieved by embedding advanced analog and mixed‑signal techniques within the SerDes.

When data rates reach 224 Gbps, higher Nyquist frequencies introduce non‑linearity in the optical domain, requiring additional components for signal integrity. Hybrid approaches combining automatic gain control (AGC) and clock‑data recovery (CDR) chips are emerging to address these challenges.

UCIe and the Evolution of Co‑Packaged Optics (CPO)

Co‑packaged optics (CPO) integrate optical components directly onto the host chip, shortening the electrical‑to‑optical interface and boosting performance. The Universal Chiplet Interconnect Express (UCIe) standard plays a pivotal role in enabling high‑density, high‑speed chip‑to‑chip communication for multi‑chip systems.

Two primary CPO implementations are emerging:

Serial PHY with direct/linear optical drive: UCIe facilitates chip‑to‑chip communication within the host, then uses an I/O chip containing SerDes and optical components for the interface. This supports longer distances but adds latency and power due to the extra SerDes.

Parallel PHY with direct/linear optical drive: This approach removes the SerDes, connecting the host directly to an I/O chip with integrated silicon‑photonic components. It offers shorter distances, lower latency, and higher energy efficiency, but requires advanced optical multiplexing (e.g., CWDM) for effective fiber management.

Figure 2: CPO use case – longer distance but higher latency and power (pJ/bit), lower Gb/s/mm.

Figure 3: CPO use case – shorter distance, lower latency and power (pJ/bit), higher Gb/s/mm.

Co‑Evolution of Linear Driver Optics and Hybrid Signal Techniques

The transition from copper to optical requires a holistic approach to ensure new optical systems meet performance goals and address inherent challenges. Linear driver optics are a key innovation, offering efficient high‑speed data transmission.

At 224 Gbps and beyond, signal‑integrity issues such as non‑linearity and loss become more pronounced. The industry is developing a semi‑retimed hybrid method that combines the benefits of linear driver optics with additional signal‑conditioning components (AGC, CDR) to mitigate these effects and preserve signal integrity over long distances.

Industry Adoption and Commercial Demonstrations

Synopsys recently showcased PCIe 7.0 and 224 Gbps linear driver optical solutions, highlighting passive components, linear amplifiers, and integrated laser drivers, demonstrating the feasibility of these technologies for next‑generation data centers.

Conclusion

The shift from copper to optical interconnects is driven by the need for higher bandwidth, longer reach, and better overall performance. While copper remains valuable for latency‑critical workloads, optical solutions—especially linear driver optics and standards like UCIe—are set to dominate expansion scenarios. Continued advances in energy‑efficient, low‑latency optical components will be crucial for meeting the challenges of future ZB‑scale compute networks, ultimately achieving the vision of “optics in, copper out.”