A novel Y-branch based monolithic transceiver with a superluminescent diode and a waveguide photodiode (Y-SDL-PD) is designed and fabricated by the method of bundle integrated waveguide (BIG) as the scheme for monolithic integration and angled Y-branch as the passive bi-directional waveguide. The simulations of BIG and Y-branches show low losses and improved far-field patterns, based on the beam propagation method (BPM). The amplified spontaneous emission of the device is up to 10 mW at 120 mA with no threshold and saturation. Spectral characteristics of about 30 nm width and less than 1 dB modulation are achieved using the built-in anti-lasing ability of Y-branch. The beam divergence angles in horizontal and vertical directions are optimized to as small as 12° × 8°, resulting in good fibre coupling.