An innovative readout channel, based on analog amplitude modulation of the signals recorded by each sensing site, is developed for high-density CMOS-based microelectrode arrays. A single amplification stage simultaneously records the neural activity acquired from several sensors. A theoretical analysis has demonstrated that a major physical limitation of the readout architecture relates to the summation of the thermal noise of each recorded signal at the input node of the front-end amplification stage. After implementation of the proposed readout architecture in a UMC 0.18 um CMOS technology, it has been shown that the maximum number of sensors which can simultaneously be recorded depends on the electrical characteristics of the recorded extracellular voltages, which depend on the experimental setup. Considering a typical case encountered during electrophysiological experiments, the maximum number of sensors which can simultaneously be recorded is approximately in the range of 5-10.