A method is provided for forming a silicon oxide (SiOx) thin-film with embedded nanocrystalline silicon (Si). The method deposits SiOx, where x is in the range of 1 to 2, overlying a substrate, using a high-density (HD) plasma-enhanced chemical vapor deposition (PECVD) process. As a result, the SiOx thin-film is embedded with nanocrystalline Si. The HD PECVD process may use an inductively coupled plasma (ICP) source, a substrate temperature of less than about 400.degree. C., and an oxygen source gas with a silicon precursor. In one aspect, a hydrogen source gas and an inert gas are used, where the ratio of oxygen source gas to inert gas is in the range of about 0.02 to 5. The SiOx thin-film with embedded nanocrystalline Si typically has a refractive index in the range of about 1.6 to 2.2, with an extinction coefficient in the range of 0 to 0.5.