Cathay Haitong: MicroLED optical communication enters the industrial deployment stage; upstream equipment and midstream packaging and testing manufacturing links are both expected to benefit

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（Source: Zhitong Finance）

Zhito ng Finance APP learned that Guotai Haitong released a research report saying that MicroLED is moving from the display sector into optical communications. It has broken through the limitations of traditional laser solutions and copper interconnects, and has already entered the industrial implementation stage. The TAM for MicroLED optical communications is expected to exceed $10 billion. The firm is optimistic about the application potential of MicroLED in optical communications. In 2026, it is expected to see more product implementations, and in 2027 and 2028 it will gradually begin to enter mass production. The potential market space for MicroLED optical communications is expected to exceed $10 billion. Upstream components such as MicroLED chips, optical lenses, multi-fiber optical fibers, drivers, and upstream equipment, as well as midstream packaging, testing, and manufacturing processes, are all expected to benefit.

The main views of Guotai Haitong are as follows:

The MicroLED solution breaks through the limitations of traditional laser schemes and copper interconnects, with clear advantages in power consumption, reliability, cost, and transmission distance

As a communication light-emitting source, MicroLED adopts a “wide and slow” (WaS) architecture. It uses hundreds of parallel low-speed optical communication channels. With a simple switching scheme, each channel can achieve modulation rates of several Gbps. Based on MicroLED light sources, power consumption for 1.6Tbps CPO optical communication products is expected to be reduced to around 1.6W, and 800G optical module power consumption can be reduced to 3–5W. It can eliminate some complex electrical chips, delivering significant advantages in cost-effectiveness and power consumption. The transmission distance can reach dozens of meters, reliability can reach the level of copper interconnects, and it supports packaging schemes such as plug-and-play, CPO, and OBO

Micro LED optical communication technology is gradually moving toward industrial implementation, forming an ecosystem in which CSPs, LED manufacturers, and communication manufacturers participate together

Overseas leading manufacturers have already launched products. Overseas Avicena released a single-channel 4Gbps communication solution in November 2025, and released the world’s first Micro LED optical interconnect evaluation kit in March 2026. Microsoft proposed the MOSAIC technology, working with MediaTek to develop and release a MicroLED-based 800GAOC. Credo plans to launch an ALC innovative product category in fiscal year 2027, and enter mass-production ramp-up in fiscal year 2028. Marvell invested in MicroLED maker Mojo Vision and collaborated to develop optical communication technologies.

Domestic follow-up is fast, and multiple MicroLED manufacturers have already submitted sample optical interconnect products

Hua Can Optoelectronics, Zhaochi Shares, Leyard, and Sanan Optoelectronics have all developed MicroLED-related communication products, which are in the verification and testing stage. For example, the NRZ-OOK transmission rate of MicroLED light source devices produced by Sanan Optoelectronics can exceed 10Gb/s. Some products from Chinese manufacturers are relatively close to the levels of overseas leading manufacturers. The domestic industrial chain is expected to usher in major development opportunities.

Risk warning: R&D not meeting expectations risk, market expansion not meeting expectations risk, technology route competition risk, downstream demand fluctuation risk, equipment and materials supply risk, intellectual property and patent dispute risk

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