A high bandwidth optical interconnect is designed based on parallel optical VCSEL links. Large matrices with 168 data channels are utilized exhibiting the highest reported full duplex aggregate bandwidth of 1.34Tb/s. Optical links of 300m are measured with BER < 10-12 while the power efficiency is 10.2 pJ/bit. The interconnect design is that of hybrid device with the III-V optoelectronics assembled directly onto the ASIC using Au/Sn eutectic bonding. Optical packaging is enabled using fiber bundle matrices whose dimensions are identical to those of the optoelectronic chips. The entire chip is assembled onto a system PCB in telecom and datacom applications. The backplane of the system becomes passive optical backplane and is entirely fiber based. The hybrid integration allows for a 3-fold increase in the number of SerDes available on a single package to about 500 lanes.