Provided is a data compression method for improving HDMI transmission in terms of interconnection, comprising in particular: a source device parsing EDID content so as to understand the overall capabilities of the display device, understanding in particular, by means of parsing the SCDS data structure, display device capability in terms of DSC, comprising the maximum FRL rate, and the number of DSC slice processing units (e.g. 8); if DSC_422_Option, at the 4th bit of the 8th byte of the SCDS, is 1, this indicates that under certain conditions (e.g. 8K 120) the display device may support 4:2:2 DSC, hence required DSC resources are less than 4:4:4 DSC; if 0, this indicates that under these particular conditions the display device does not support 4:2:2 DSC. The present method allows HDMI 2.1 devices to conditionally support up to 8 DSC slice units, ensuring the normal operation of 8K 120 422 video streams, while not influencing other scenarios; backward compatibility is ensured, and the mismatch problem of VESA/DSC capability and HDMI transceiving terminals is resolved.