A method includes: a first chip receives a first data stream from a second chip, where the first data stream is obtained through encoding by using a first forward error correction (FEC) code type; and the first chip re-encodes the first data stream at least once, to obtain a second data stream, where the second data stream is a concatenated FEC code stream obtained through encoding by using at least the first FEC code type and a second FEC code type. This application provides a concatenated coding scheme, so that a gain is higher, an FEC code type conversion process is simplified, a delay and device power consumption that are required during FEC code type conversion are reduced, and a data transmission distance and a data transmission rate are increased.