The constraint in free-space optical communications is not the laser. It is the optics required to aim it. Conventional semiconductor lasers are dim and divergent; they need large, precisely aligned lens arrays to form a usable beam over meaningful distances. Vector Photonics, a University of Glasgow spinoff, just demonstrated the first outdoor free-space data link using photonic-crystal surface-emitting lasers (PCSELs), which emit bright, narrow beams natively at 1310nm (telecom O-band). The collimation problem shrinks to a simple lens array. The demo ran using hardware from Fraunhofer Center for Applied Photonics and transmitted HD-quality data through open air.
Co-packaged optics is where this matters for hardware teams. AI fabric interconnects are pushing packaging density to the point where conventional pluggable transceivers cannot fit. Co-packaged optics is the industry bet, but it requires lasers and optics small and efficient enough to integrate at the chip package level. Conventional diode lasers require external collimation hardware that consumes exactly the space and power budget co-packaging is trying to recover. PCSELs, if they reach volume manufacturing cost, remove that tradeoff. Vector Photonics makes its PCSELs in indium phosphide at a commercial fab, which means the path to production is not exotic.
Vector Photonics is not a tier-1 transceiver supplier. This is a lab-to-outdoor demo from a spinoff. But the physics is demonstrated, the manufacturing path is commercial, and the timing is aligned with the 2027-to-2029 window when co-packaged optics is expected to proliferate across AI training clusters. Optical transceiver vendors whose margin depends on pluggable form factors should be watching this closely.