A new industry alliance, called X40 Multi-Source Agreement (MSA) Group, was set up to cut 40 Gbit/s costs with hot-pluggable multi-rate 40Gbit/s optical transceiver. The X40 MSA is made of 9 networking, optical module and semiconductor companies, i.e. Aeluros, Broadcom, Emcore, Finisar, Infinera, Juniper, MergeOptics, Tyco Electronics and Vitesse Semiconductor. The group targets to enable network equipment manufacturers to increase port density and system data throughput, extend link distances, reduce power and reduce cost per Gbit/s. The hot-pluggable transceiver module could integrate and multiplex four transmit and four receive channels into a single pair of fibers. The initial requirements include short reach metro access links up to 10 km, four uncooled CWDM wavelengths around 1310 nm, and embeded diagnostic capability to monitor the link.