Optical interconnect in integrated optoelectronic circuits is one of the promising next-generation technologies for replacing metalized interconnect. Efforts have been made to use silicon (Si)-compatible materials such as germanium (Ge) and Ge-buffered III–V compound semiconductors, along with Si, as optical sources for Si and group-IV integrated optoelectronic systems. This opens the possibility that higher fraction of Ge with its high refractive index (n) can be incorporated in Si waveguide for optical interconnect and the graftability between Si and group-IV or III–V materials would be improved in silicon photonics. In this work, advantageous features of nano-structured silicon germanium (Si1−xGex) optical waveguide with different Ge fraction (x) were evaluated by both optical simulations and theoretical calculations, which are mainly found in the enhanced optical confinement and better interfacing capability. Along with the SiGe waveguide, performance of Si1−xGex microring resonator under material loss in the effect of extinction coefficient (k) has been investigated to suggest the necessity of optimizing the Ge content in Si1−xGex passive devices. While carrying out the establish design criteria, n and k have been modelled in closed-form functions of Ge fraction at 1550nm. Furthermore, by examining high-resolution transmission electron microscopy (HR-TEM) images, process compatibility of Ge with either group-IV alloys or III–V compound semiconductors is confirmed for the monolithically integrated photonic circuits.