Why HYBRID Architectures Outperform LRO in Real-World Systems—and Are Reshaping Short-Reach Interconnects in AI Data Centers 2026, Product News

1. Introduction: AI and Data Center Short-Reach Interconnects Must Return to System Engineering Reality

As AI and data center interconnects accelerate toward 800G and 1.6T, short-reach optical connectivity is no longer a question of power optimization alone. It has evolved into a system-level engineering challenge, encompassing port density, thermal design, link stability, and large-scale deployability.

Amid growing industry discussions around “de-DSP” architectures, LPO has been pushed toward its theoretical limits, while traditional DSP-based solutions continue to serve as the foundation for reliability. LRO, however, has yet to establish a stable position in large-scale deployments. Its reliance on TX-only DSP architectures increasingly exposes constraints in chip reusability, ecosystem scalability, and long-term sustainability.

By contrast, HYBRID (semi-DSP) architectures take a more pragmatic approach. By reusing mature full-duplex DSP platforms and reducing DSP utilization rather than redefining DSP architectures, HYBRID achieves a more realistic balance across power efficiency, latency, signal quality, and engineering controllability.

From a system engineering perspective, this article argues that AI and data center short-reach interconnects are entering a phase where architectural momentum is shifting from LRO toward HYBRID-based design methodologies. The following sections examine the technical and industrial factors driving this transition.

2. Revisiting the Core Architectures: DSP, LPO, and LRO

2.1 DSP-Based Modules: The Anchor of Performance

Architecture: Full DSP processing on both TX and RX paths.

Strengths:

• • Strongest signal processing capabilities (equalization, CDR, FEC, nonlinear compensation)
  • Supports medium-, long-, and ultra-long-reach links
  • Mature ecosystem and standardized interfaces for plug-and-play deployment

Limitations:

• • High power consumption (typically >14–16 W at 800G)
  • Increased latency
  • Highest cost

Typical Applications: Metro networks, backbone networks, DCI, and mission-critical links where reliability is paramount. 

2.2 LPO: Maximum Energy Efficiency

Architecture: No DSP inside the module; all signal processing is handled by the host SerDes.

Strengths:

• • Lowest power consumption (30–50% lower than DSP modules)
  • Ultra-low latency
  • Lowest module BOM cost

Limitations:

• • Requires exceptional host SerDes performance and channel consistency
  • Limited reach (typically ≤100 m)
  • Complex system tuning; ecosystem still maturing

Typical Applications: Ultra-short-reach links within or between AI racks. 

2.3 LRO: A Conceptual Compromise

Architecture: DSP retained on TX; linear reception on RX.

Strengths:

• • Lower power than full DSP
  • Longer reach than LPO

Challenges: 

• • Fragmented TX-only DSP variants
  • Poor chip reusability, weak economies of scale
  • Ecosystem adoption remains limited 

3. HYBRID: The Semi-DSP, Engineering-Ready Approach

3.1 What HYBRID Means 

HYBRID is not simply LRO. It represents a system-level reallocation of DSP resources:

• • Only a portion of TX/RX channels pass through DSP
  • Remaining channels use a linear architecture
  • DSP may be applied selectively to either TX or RX

Conceptually: HYBRID ≈ (LRO + LTO) / 2

3.2 Key Differences: HYBRID vs. LRO

4. HYBRID: Advantages and Practical Considerations 

Key Advantages: 

Power Efficiency: 20–30% lower than full DSP

Ultra-Low Latency: DSP usage halved, latency comparable to LRO 

Predictable Signal Quality: 

MMF 50 m: PRE-FEC BER E-7 to E-8

SMF 500 m: PRE-FEC BER E-10

Cost Optimization: ~20% reduction vs. traditional DSP modules

Supports Higher Density: Enables 16-channel / 3.2T pluggable modules

Challenges:  

• • Linear RX channels require slightly higher host SI tuning
  • System-level co-optimization is needed; not plug-and-play
  • Large-scale adoption is in early stages and requires close collaboration

Compared with LPO and LRO, HYBRID offers more controllable engineering risk. 

5. Parallel Coexistence Is Inevitable 

LPO represents the idealized extreme for efficiency

DSP remains the foundation for reliability

LRO offers conceptual compromise but faces scalability limits

HYBRID emerges as the deployable, scalable intermediate solution

HYBRID leverages mature duplex DSPs, avoiding the specialized TX-only variants of LRO. This gives it superior performance, efficiency, cost-effectiveness, ecosystem readiness, supply-chain stability, and real-world deployability.

Looking forward, LPO, HYBRID, and DSP will coexist, forming the technological foundation for AI and next-generation data center interconnects.