Throughput, power consumption, signal integrity, pin count and routing complexity are all increasingly important interconnect issues that the system designer must deal with. Recent advances in integrated optical devices may deliver alternative interconnect solutions enabling drastically enhanced performance. This paper begins by outlining some of the more pressing issues in interconnect design, and goes on to describe system-level optical interconnect for inter- and intra-chip applications. Inter-chip optical interconnect, now a relatively mature technology, can enable greater connectivity for parallel computing for example through the use of optical I/O pads and wavelength division multiplexing. Intra-chip optical interconnect, technologically challenging and requiring new design methods, is presented through a proposal for heterogeneous integration of a photonic “above-IC” layer followed by a design methodology for on-chip optical links. Design technology issues are highlighted ...