To meet the demand of delivering ever-increasing Internet traffic, optical network must response by increasing its transmission capacity. Since transmission capacity of an individual fiber is still well exceed the capacity of transmitters (TXs) and receivers (RXs), wavelength-division multiplexing (WDM), in which many TXs and RXs at the transmitting ends of a fiber are used to send and receive many signals, becomes the necessary technology for increasing the transmission capacity of each link of an optical network. This trend, however, demands for increasing density not only the TXs and RXs, but all other components at the sending and receiving ends of communications links. As the number of wavelengths in WDM configuration getting greater, the number of all these components that must be placed on one board has to increase too; hence, the density of packaging comes to micro-and even nano-scale. The TXs and RXs are produced in arrays on a chip quite similar to production of VLSI electronic circuits. At that scale, traditional optical operations used today in an optical-communications technology, such as launching light into optical fiber from TXs and directing light from optical fiber into RXs, multiplexing and demultiplexing individual channels (wavelengths), and electro-optical (E/O) and opto-electrical (O/E) conversions become problems primarily because of the diffraction limit. The problems associated with the diffraction limit are particularly acute for optical interconnects. One of the possible solutions to all these-and some other-problems could be the use of plasmonics. In the last years, the optical-communications industry shows a great interest in developing this topic, as the growing number of publications and practical results can attest.This paper consists of two parts. The first part reviews the current trends in application of plasmonics in optical communications and the second part discusses the theoretical foundation of the proposed WDM demultiplexer and offers the scheme of possible implementation of the device.Plasmonics [1] is a branch of science and technology dealing with coupling of photons to free electron oscillations at the interface between a conductor and a dielectric. Though the concept of plasmons was introduced more than a century ago (G. Mie, 1908), only today practical realization of the plasmonics becomes feasible thanks to new nanofabrication technology and powerful simulation tools.Plasmonics' main entity is surface plasmon polaritons (SPPs), which are twodimensional electromagnetic waves that propagate between conductors (metals) and dielectrics. These surface waves are excited when light strikes the dielectric-metal interface; the energy of the photons is transferred to the metal and resonantly excites the oscillations of free electrons. The electrons' response results in the creation of dynamic Frontiers in Electronics Downloaded from www.worldscientific.com by MONASH UNIVERSITY on 04/22/17. For personal use only.