A method to reduce a peak power consumption of an optical transceiver including a thermoelectric cooler (TEC) is disclosed. The transceiver includes three power units, one of which powers the temperature control unit including the TEC driver and the TEC, second one of which powers the transmitter unit including an LD and an LD driver, and the last of which powers the receiver unit. Once the transceiver is set in the host system, the transceiver first activates the first and second power units to start up the temperature control unit and the transmitter unit, and subsequently, the transceiver sets up the third power unit after the temperature of the LD is stabilized at a target temperature.