MZM modulation is based on interference. In this process, part of the light is picked up by optical splitters, its phase is changed by the modulation voltage, and it is combined with the unchanged light beam in another beam splitter. Due to the phase shift, interference occurs and the light beam is modulated. The magnitude of the applied voltage determines the phase shift and is a measure of the light modulation.
Mach-Zehnder modulators for optical transmission are electro-optic modulators made of lithium niobate (LiNbO), a quartz diffused with titanium. Thanks to advanced technologies, they have now been scaled down so that they can also be used for optical communication between functional blocks of a single chip.