TECHNOLOGY EXPLAINER
Optical Modulation and Modulation Formats
— putting information on light is a materials problem: how far can you move the refractive index?
Optical communication puts information onto laser light by working on its brightness, phase and polarisation. NRZ carries one bit per symbol, PAM4 two, and DP-16QAM, which also uses polarisation, eight. The part that does the work is the modulator, and there are three main types: Mach-Zehnder, electro-absorption and microring. Every one of them comes down to using a voltage to change a material's refractive index or absorption very slightly. Which material, and by how much — that is where the contest is.
- What optical modulation is (the short version)
- Modulation formats — NRZ, PAM4 and QAM differ in how many bits each symbol carries
- Our calculation: the price of PAM4, and the bit arithmetic of QAM
- How modulators work (1): Mach-Zehnder — turning phase into light and dark by interference
- How modulators work (2): electro-absorption and microrings
- A materials engineer's view (1): the refractive index barely moves
- A materials engineer's view (2): the material decides how the effect works
- What is still hard
- Glossary / References / Claim-to-source audit
Sourced = stated in a standard, a public document from a standards body, or a peer-reviewed paper (link given)
Our calculation = a figure this article derived, with the assumptions spelled out
Not yet confirmed = still in development or at the research stage, with nothing settled and no confirmed volume production
General explanations of the physics and materials-design interpretations are marked separately as Commentary.
1. What optical modulation is (the short version)
- What it does: it takes laser light shining at a constant level and varies its brightness (intensity), the offset of its peaks and troughs (phase) and the direction in which it oscillates (polarisation) in step with an electrical signal, so that the light carries information (commentary)
- How the information goes on (the modulation format): short data-centre links use NRZ and PAM4, which encode data in brightness levels; long-haul links use QAM, which also uses phase and polarisation. The LPO specification for 100 Gb/s per lane uses 53.125 GBd PAM4Sourced, and OIF's 400ZR uses DP-16QAMSourced
- What puts it on (the modulator): either the laser's drive current is varied directly, or a separate modulator outside the laser works on the light. The main modulator types are Mach-Zehnder, electro-absorption and microring (commentary)
Our silicon photonics explainer mentioned that imec developed three kinds of silicon modulator: ring, Mach-Zehnder and GeSi electro-absorption. This article looks, from the materials side, at why and how those three change light. How QAM is received and recovered is covered in our explainer on coherent optical communication and DSP, thin-film lithium niobate in our thin-film lithium niobate explainer, integrating InP modulators with lasers in our explainer on photonic integrated circuits and indium phosphide, and the use of microrings for wavelength multiplexing in our explainer on wavelength-division multiplexing and microrings.
2. Modulation formats — NRZ, PAM4 and QAM differ in how many bits each symbol carries
An optical signal is a sequence of symbols, each occupying a fixed slot of time. The number of symbols per second is the baud rate (Bd, GBd), and what distinguishes one modulation format from another is how many bits each symbol carries (commentary).
| Application / standard | Modulation format | Symbol rate | What the document says |
|---|---|---|---|
| 100G-DR-LPO (LPO MSA) | PAM4 | 53.125 GBd | 100 Gb/s per lane, up to 500 m over SMF |
| 1.6TAUI-8 (electrical lanes in the OSFP specification) | 224G-PAM4 | 106.25 GBaud | 8 lanes × 200 Gb/s = 1.6 Tb/s |
| 400ZR (OIF) | DP-16QAM | 59.84375 GBaud per polarisation | 478.750 Gbps in total. For amplified links up to 120 km and other uses |
| 800ZR (OIF) | DP-16QAM | 118.203350603 Gbaud | Single-span, amplified DWDM over 80 to 120 km |
All Sourced (LPO MSA specification [Ref. 3], OSFP specification [Ref. 4], OIF 400ZR implementation agreement Rev 3.0 [Ref. 5], OIF 800ZR implementation agreement Rev 1.0 [Ref. 6]). 1.6TAUI-8 values are for electrical lanes.
3. Our calculation: the price of PAM4, and the bit arithmetic of QAM
Put more bits on each symbol and you can send more data at the same baud rate. But it does not come free. The calculation below shows what is being paid.
- The price of PAM4: put four evenly spaced levels into the same brightness range and the gap between neighbours is 1/3 of NRZ's. In amplitude terms that is 20 log10(1/3) = about −9.5 dBOur calculation
- The return on PAM4: 1.6TAUI-8 runs at 106.25 GBaud × 2 bits = 212.5 Gb/s. Sending the same bits with NRZ would take 212.5 GBdOur calculation
- The bit arithmetic of QAM: 16QAM has 16 points, so log216 = 4 bits; using two polarisations gives 8 bits per symbol. For 400ZR, 59.84375 × 8 = 478.75 Gb/s, which matches OIF's stated 478.750 GbpsOur calculation. For 800ZR, 118.203 × 8 = about 945.6 Gb/sOur calculation
Assumptions and limits: −9.5 dB is a geometric ratio assuming four ideal, evenly spaced levels. The real performance difference with PAM4 depends on the kind of noise, modulator nonlinearity and receiver equalisation. The calculated bit rates include error correction (FEC) and framing overhead, so they are higher than the data rate available to users (400 Gb/s and so on).
So PAM4 is a format that, instead of asking the electronics and the modulator to go twice as fast, asks them to produce steps three times finer, accurately. That ability to produce steps accurately — modulator linearity — is set by materials and device structure (our commentary). The non-linear compensation in the LPO specification, discussed in our explainer on NPO and LPO, is precisely a mechanism for correcting distortion in those steps.
4. How modulators work (1): Mach-Zehnder — turning phase into light and dark by interference
A Mach-Zehnder (MZ) modulator splits light into two paths, shifts the phase in one path (or both) and then recombines them. If the phases match, the waves reinforce each other and the output is bright; if they are half a wavelength (π) apart, they cancel and the output is dark (commentary).
The strength of the MZ type is that it can manipulate phase itself, not just brightness. Combine two MZs and you can place points freely in phase and amplitude, as in the QAM of Section 2 (commentary). Its weakness is length. Because the refractive index of a material changes only slightly, shifting the phase by π needs arms of a certain length (calculated in Section 6).
Which material does the phase shifting changes the character of the device a great deal.
- Lithium niobate (LiNbO₃): a crystal with an electro-optic effect (the Pockels effect) in which the refractive index changes with voltage. In Nature (2018), Wang et al. describe conventional LiNbO₃ modulators as "bulky, expensive, limited in bandwidth and require high drive voltages", and with a thin-film, integrated modulator demonstrated CMOS-compatible drive voltages, data rates of up to 210 Gb/s and on-chip optical loss of less than 0.5 dBSourced
- Silicon: in Nature (2004), Liu et al. noted that silicon waveguide modulators had until then reached modulation frequencies of only about 20 MHz, and demonstrated an all-silicon modulator with an embedded MOS capacitor structure and a modulation bandwidth exceeding 1 GHzSourced. The paper says the device is compatible with CMOS processing and opens the way to monolithic integration with advanced electronics on the same silicon substrateSourced
5. How modulators work (2): electro-absorption and microrings
Electro-absorption (EA) — moving the absorption edge with a voltage
A semiconductor absorbs light at wavelengths shorter than a certain value and lets longer wavelengths through. Near that boundary (the absorption edge), applying an electric field to shift the edge lets you switch between passing and absorbing the light. In Physical Review Letters in 1984, Miller et al. showed in theory and experiment that applying an electric field perpendicular to the layers of a GaAs-AlGaAs quantum-well structure produces large shifts in optical absorption (the quantum-confined Stark effect)Sourced. Because the EA type does not rely on interference, it can be made short, and it lends itself to being combined on one chip with a laser made from the same compound semiconductor (commentary).
Microring (MR) — using resonance to amplify a small change
In Nature in 2005, Xu et al. reported a modulator using a silicon ring resonator. They wrote that the resonant structure "enhances the sensitivity of light to small changes in refractive index of the silicon", and demonstrated a modulator 12 µm in diameter, three orders of magnitude smaller than previous demonstrationsSourced. Because the wavelength of the resonance dip shifts with refractive index, the ring acts as a light-and-dark switch for light of a fixed wavelength (commentary). The catch is that the resonant wavelength also moves with temperature, a problem covered in our silicon photonics explainer.
| Type | What it changes | Typical size | Strengths | Watch out for |
|---|---|---|---|---|
| Mach-Zehnder | Phase (turned into light and dark by interference) | Long (tends to be millimetre-scale) | Phase control, QAM | Length, drive voltage, nonlinear transfer characteristic |
| Electro-absorption | Absorption | Short | Integration with the laser | Wavelength and temperature dependence of absorption |
| Microring | Resonant wavelength | Very small (e.g. 12 µm diameter) | Small size, low capacitance, wavelength multiplexing | Resonance shifts with temperature |
"12 µm diameter" is Sourced from the paper by Xu et al. [Ref. 7]. The other cells are this article's framing based on physical principles (commentary), not a performance comparison of individual products.
6. A materials engineer's view (1): the refractive index barely moves
How much must the refractive index change to shift the phase by π in a Mach-Zehnder modulator? The phase shift is Δφ = 2π × Δn × L / λ (Δn: change in refractive index, L: arm length, λ: wavelength), so setting Δφ = π gives Δn = λ / (2L) (commentary).
To shift the phase by π with a 1 mm arm takes a refractive index change of Δn = 1.31 µm / (2 × 1,000 µm) = about 6.6 × 10−4Our calculation. Raising and lowering the refractive index by a few parts in ten thousand, by voltage, tens of billions of times a second — that is the modulator's job.
When a material can deliver only a small Δn at a time, there are only two ways to make up the difference.
- With length (Mach-Zehnder): longer arms lower the Δn required. But longer electrodes add electrical capacitance and loss and are harder to drive at high speed. Wang et al. say they solved this by simultaneously designing for "group-velocity matching" between the microwave and the lightSourced
- With resonance (microring): the light circulates many times round the ring, so a small change per round trip accumulates. The circumference of Xu et al.'s 12 µm ring is π × 12 µm = about 38 µmOur calculation, a few tens of times shorter or more than a millimetre-scale MZ arm. The price is that it works only at one wavelength and is sensitive to temperature
Put another way, raise a material's electro-optic strength by an order of magnitude and the modulator can be an order of magnitude shorter. A shorter device has less electrode capacitance, and lower drive voltage and power. That is why new modulator materials such as thin-film lithium niobate and polymers continue to be researched (our commentary).
7. A materials engineer's view (2): the material decides how the effect works
The three material systems differ in the very mechanism by which they change refractive index or absorption, and that sets the character of each device (our commentary).
- Lithium niobate (the Pockels effect): an electric field slightly displaces the ions in the crystal, and the refractive index changes in proportion to the field. The response tends to be free of absorption and linear. On the other hand, as Wang et al. write, "difficulties in microstructuring lithium niobate" long held back integrationSourced
- Silicon (carrier-induced index change): crystalline silicon has no Pockels effect, so the refractive index is changed by using a voltage to move electrons and holes in and out. Carriers also absorb light, so changing the phase also changes the loss (a well-known general property of the material). Even so, as Liu et al. note, compatibility with CMOS processing and monolithic integration with electronics are advantagesSourced
- Compound-semiconductor quantum wells (electro-absorption): well structures a few nanometres thick are built in by crystal growth to engineer where the absorption edge sits. Miller et al.'s work used GaAs-AlGaAs quantum wellsSourced. Precision in layer thickness and composition translates directly into the usable wavelength and the depth of extinction
Seen from a materials supplier's side, choosing a modulator means choosing which physical property can be built in, by which manufacturing process, to what precision. The Pockels effect is set by crystal symmetry, the carrier effect by the doping profile and the quantum-confinement effect by epitaxial layer thickness. Though all are "modulators", the materials technologies they call for — single-crystal growth, ion implantation, MOCVD — belong to entirely separate lineages (our commentary).
And as Section 3 showed, PAM4 and QAM demand modulator linearity. Between the Pockels effect, whose response is inherently linear, and the carrier effect, in which absorption and phase move together, producing the same four levels or sixteen points is not equally easy (our commentary).
8. What is still hard
(1) Towards 400 Gb/s per lane
While 200 Gb/s per lane (PAM4 at 106.25 GBaud) is still on its way through standardisationSourced, the signalling for the next generation has not been decided. OIF held a "448Gbps Signaling for AI Workshop" (April 2025), and an IEEE P802.3dj task force document lists the start of work on 400 Gb/s signalling (a Call for Interest, CFI) as a planned itemSourced. Whether the baud rate will double again or more bits will go on each symbol — the next generation's modulation format had not been settled as of this article's researchNot yet confirmed.
(2) No single modulator material has won
As this article has shown, LiNbO₃, silicon and compound semiconductors each work by different physics and each has different weaknesses. Wang et al.'s paper says that integrated modulators based on silicon, InP and polymers have, because of intrinsic material limitations, "not yet been able to meet ... simultaneously" the requirementsSourced. Which material will become the mainstream of the next generation cannot be judged within the scope of this articleNot yet confirmed.
(3) What this article does not cover
The electro-optic coefficients of each material, and the drive voltage, bandwidth and power of particular products, are not given, because the primary sources this article could open and check did not provide them in a comparable form. Soref and Bennett's 1987 paper (IEEE Journal of Quantum Electronics) is known as a foundational reference on electro-optic effects in silicon, but because this article could not check its text, no figures from it are quoted.
- Modulation formats differ in how many bits each symbol carries. NRZ carries 1, PAM4 2 and DP-16QAM 8 (commentary)
- PAM4 halves the speed but cuts the gap to 1/3 (about −9.5 dB)Our calculation
- 400ZR is DP-16QAM at 59.84375 GBaud, for 478.75 Gb/s in totalSourced
- The three main modulator types are Mach-Zehnder (phase and interference), electro-absorption (shifting the absorption edge) and microring (resonance) (commentary)
- Shifting the phase by π with a 1 mm arm needs a refractive index change of about 6.6 × 10−4Our calculation
- A thin-film LiNbO₃ modulator showed CMOS-compatible drive voltage, 210 Gb/s and less than 0.5 dB loss (Nature 2018)Sourced
- Choosing a modulator material means choosing between separate lineages of materials technology: crystal symmetry, doping and epitaxial growth (our commentary)
9. Glossary
- Modulation
- Varying the intensity, phase, polarisation and so on of light in step with an electrical signal so that it carries information.
- Baud rate (Bd)
- The number of symbols sent per second. 1 GBd is a billion symbols per second.
- NRZ
- A format that sends one bit per symbol using the presence or absence of light (two levels).
- PAM4
- A format that sends two bits per symbol using four brightness levels.
- QAM
- A format that creates many points from combinations of phase and amplitude. 16QAM carries four bits per symbol.
- DP (dual polarisation)
- Putting separate signals on two orthogonal polarisations to double capacity.
- Mach-Zehnder modulator
- A modulator that splits light in two, introduces a phase difference and recombines the paths so that interference produces light and dark.
- Electro-absorption modulator
- A modulator that uses an electric field to shift a semiconductor's absorption edge, so that light is absorbed or passed.
- Microring modulator
- A modulator that switches light by using the refractive index to shift the resonant wavelength of a small ring resonator.
- Pockels effect
- An electro-optic effect in which the refractive index changes in proportion to the electric field. Found in LiNbO₃ and similar crystals.
- Quantum-confined Stark effect
- The shift of the absorption edge when an electric field is applied to a quantum well. The principle behind electro-absorption modulators.
- Direct detection
- Reception that measures only the brightness of the light. Used with NRZ and PAM4.
10. References (primary sources)
- Wang C. et al. (Nature, 2018) "Integrated lithium niobate electro-optic modulators operating at CMOS-compatible voltages", Nature 562, 101–104. DOI: 10.1038/s41586-018-0551-y — doi.org
- Miller D. A. B. et al. (Physical Review Letters, 1984) "Band-Edge Electroabsorption in Quantum Well Structures: The Quantum-Confined Stark Effect", Phys. Rev. Lett. 53, 2173–2176. DOI: 10.1103/PhysRevLett.53.2173 — doi.org
- LPO MSA "100G-DR-LPO Revision 1.0", March 2025 (PDF) — lpo-msa.org
- OSFP MSA "Specification for OSFP Octal Small Form Factor Pluggable Modules, Rev 5.22", 9 August 2025 (PDF) — osfpmsa.org
- OIF "Implementation Agreement 400ZR (OIF-400ZR-03.0)", 8 October 2024 (PDF) — oiforum.com
- OIF "Implementation Agreement for 800ZR Coherent Interfaces (OIF-800ZR-01.0)", 8 October 2024 (PDF) — oiforum.com
- Xu Q. et al. (Nature, 2005) "Micrometre-scale silicon electro-optic modulator", Nature 435, 325–327. DOI: 10.1038/nature03569 — doi.org
- Liu A. et al. (Nature, 2004) "A high-speed silicon optical modulator based on a metal–oxide–semiconductor capacitor", Nature 427, 615–618. DOI: 10.1038/nature02310 — doi.org
- IEEE P802.3dj Task Force "Timeline Consideration", 9 December 2025 (PDF) — ieee802.org
- OIF "OIF Publishes Implementation Agreement for 112 Gb/s Retimed Transmitter Linear Receiver (RTLR) ...", 18 November 2025 (the site's events listing includes "448Gbps Signaling for AI Workshop – April 15-16, 2025") — oiforum.com
11. Claim-to-source audit
| Claim in the text | Basis | Label |
|---|---|---|
| That conventional LiNbO₃ modulators are "bulky, expensive, limited in bandwidth and require high drive voltages". That integration of LiNbO₃ was hampered by "difficulties in microstructuring lithium niobate". That integrated modulators in silicon, InP and polymers have not yet met the requirements simultaneously. That CMOS-compatible drive voltage, up to 210 Gb/s and on-chip optical loss below 0.5 dB were demonstrated. That group-velocity matching between microwave and light was designed simultaneously | Wang et al., Nature 562, 101 (2018)Reference 1 https://doi.org/10.1038/s41586-018-0551-y | Sourced |
| That applying an electric field perpendicular to the layers of a GaAs-AlGaAs quantum-well structure was shown in theory and experiment to shift optical absorption substantially (the quantum-confined Stark effect) | Miller et al., Phys. Rev. Lett. 53, 2173 (1984)Reference 2 https://doi.org/10.1103/PhysRevLett.53.2173 | Sourced |
| That 100G-DR-LPO uses 53.125 GBd PAM4 at a nominal 1310 nm, up to 500 m over SMF. The provision for host-side non-linear compensation | LPO MSA 100G-DR-LPO specificationReference 3 https://www.lpo-msa.org/files/live/sites/lpomsa/files/specs/LPO_MSA_Specification_v1p0_final.pdf | Sourced |
| That 1.6TAUI-8 is eight lanes of 224G-PAM4 at 106.25 GBaud, for 1.6 Tb/s in total | OSFP MSA specification Rev 5.22Reference 4 https://osfpmsa.org/assets/pdf/OSFP_Module_Specification_Rev5_22.pdf | Sourced |
| That 400ZR is single-carrier coherent DP-16QAM at 59.843750000 GBaud per polarisation, 478.750 Gbps in total. Uses including amplified DWDM up to 120 km | OIF 400ZR implementation agreement Rev 3.0Reference 5 https://www.oiforum.com/wp-content/uploads/OIF-400ZR-03.0.pdf | Sourced |
| That 800ZR is DP-16QAM at a nominal 118.203350603 Gbaud, targeting single-span, amplified DWDM over 80 to 120 km | OIF 800ZR implementation agreement Rev 1.0Reference 6 https://www.oiforum.com/wp-content/uploads/OIF-800ZR-01.0.pdf | Sourced |
| That the ring resonator structure "enhances the sensitivity of light to small changes in refractive index of the silicon". That a modulator 12 µm in diameter, three orders of magnitude smaller than before, was demonstrated | Xu et al., Nature 435, 325 (2005)Reference 7 https://doi.org/10.1038/nature03569 | Sourced |
| That silicon waveguide modulators had previously reached only about 20 MHz. That a modulation bandwidth exceeding 1 GHz was shown with a MOS capacitor structure. Compatibility with CMOS processing | Liu et al., Nature 427, 615 (2004)Reference 8 https://doi.org/10.1038/nature02310 | Sourced |
| That a P802.3dj task force document lists a CFI on 400 Gb/s signalling as a planned item | IEEE P802.3dj task force documentReference 9 https://www.ieee802.org/3/dj/public/25_1209/dambrosia_3dj_01b_251209.pdf | Sourced |
| That OIF held a "448Gbps Signaling for AI Workshop" (15–16 April 2025) (as listed in the site's events listing) | OIF websiteReference 10 https://www.oiforum.com/oif-publishes-implementation-agreement-for-112-gb-s-retimed-transmitter-linear-receiver-rtlr-electrical-and-optical-interface-advancing-energy-efficiency/ | Sourced |
| 20 log10(1/3) = −9.5 dB. 106.25 × 2 = 212.5 Gb/s (212.5 GBd for NRZ). log216 = 4, 8 bits with two polarisations, 59.84375 × 8 = 478.75 Gb/s, 118.203 × 8 = 945.6 Gb/s. Δn for each length from Δn = λ/(2L) (λ = 1.31 µm). π × 12 µm = 38 µm | Our calculation. Assumes four ideal, evenly spaced levels and a simplification that ignores optical confinement and electrode efficiency. Bit rates include FEC and other overhead | Our calculation |
| The modulation format of the next generation (around 400 Gb/s per lane). The mainstream modulator material of the next generation | Still under study; an outlook not settled as of this article's research | Not yet confirmed |
| General explanations of modulation basics (intensity, phase, polarisation, baud rate, MZ interference, the EA absorption edge, resonance). The principle-based cells in the comparison table of the three types. The property that carriers in silicon absorb light. The framing of making up for a small Δn with length or resonance. The reading that a stronger material effect allows a shorter device. Framing the three material systems as separate lineages of materials technology (single-crystal growth, ion implantation, MOCVD). The reading on the difference in linearity between the Pockels and carrier effects | General explanations of the physics, and this article's framing and commentary based on published literature. Not views expressed by any of the researchers or bodies | Commentary |
| Electro-optic coefficients of each material; the drive voltage, bandwidth and power of particular products. Figures from Soref and Bennett (1987) | Not stated in this article, because the primary sources it could open and check did not provide them in a comparable form, or their text could not be checked | Commentary |
| That Figs. 1, 3 and 4 are explanatory drawings, that Figs. 2 and 5 are drawings that include our calculation, and that the hero image is AI-generated | A note by this article | Commentary |
Last updated 25 September 2026. Sources are limited to primary material (peer-reviewed papers, OIF implementation agreements, the LPO MSA and OSFP MSA specifications, and public IEEE 802.3 documents). Because the article includes general explanations of the physics and materials-design interpretations, those are marked as Commentary and kept separate from sourced fact. The electro-optic coefficients of each material and the drive voltage, bandwidth and power of particular products are not given, because comparable primary sources could not be confirmed. The next generation's modulation format and modulator materials are treated as not yet settled as of this article's research. All figures are for explanation. Figs. 1, 3 and 4 are vector drawings, Figs. 2 and 5 are vector drawings that include our calculation, and the hero image is AI-generated; none of them shows the structure, spectrum or dimensions of a real device.