Photonic Integrated Circuit Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 15.11 Billion |
| Market Size (2029) | USD 38.35 Billion |
| CAGR (2024 - 2029) | 20.47 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | Asia Pacific |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
Photonic Integrated Circuit Market Analysis
The Photonic Integrated Circuit Market size is estimated at USD 15.11 billion in 2024, and is expected to reach USD 38.35 billion by 2029, growing at a CAGR of 20.47% during the forecast period (2024-2029).
- As soon as a single chip is attached, different components of the photonics, like waveguides, lasers, modulators, and detectors, become known as photonic integrated circuits. Photonic integrated circuits are extremely fast, accommodate higher bandwidth, and have high energy efficiency compared to traditional ICs. These features have dealt with some of the fundamental drawbacks associated with traditional ICs.
- In the case of photonic ICs, the power consumed in such critical applications could be reduced by at least 50%. The frequencies that could be covered with photons are about 1,000-10,000 times higher than the spectrum covered with microelectronics, implying that by using photonic ICs, end users can achieve much higher frequencies that are far more energy-efficient than traditional ICs.
- These low costs of photonics devices manufactured through the hybrid monolithic approach are growing exponentially every year as a result of DataDriven Ecosystems, finding great demand from end users' applications.
- In addition, several market participants are working to take advantage of PIC's active developments as part of a highly integrated photonic technology and in order to meet the growing volume of network traffic driven by COVID-19 pandemic responses, particularly within data centers.
- While hybrid photonic ICs are highly efficient and have a number of advantages compared to previous generations of conventional ICs, they do not achieve the level of market penetration found in traditional ICs.
- The surveillance market is growing with threats and scenarios like COVID-19. Many public places worldwide are deploying optical and photonic sensors that enable high-sensitivity night vision sensors, cameras, and systems combined with semiconductor photocathode technology with silicon-based digital video technology.
Photonic Integrated Circuit Market Trends
Growing Applications in Telecommunications and Data Centers to Drive the Market
- In telecommunication businesses and data centers, hybrid PICs offer a wide range of applications. The basic factor that has led to the increased adoption of hybrid PICs in the telecommunications and data center markets is their need for a higher transfer rate, which existing ICs cannot accommodate.
- The development of high-capacity networks and 5G have also contributed to an increase in speed. Through the development and widespread acceptance of transceivers and passive components, PIC technologies have emerged as a technology well-known within the telecommunications sector. Wireless and radio technology has become a focus of the development of 5G.
- However, photonics and fiber optics have been critical in transporting signals to and from the new generation of base stations.
- Moreover, many manufacturers are benefiting from the high degree of innovation that is allowing them to develop low-cost hybrid PIC hardware in line with their needs. In addition, an increasing number of cloud applications are rapidly upscaling the traffic that has to be handled by data centers (DC).
- According to the survey conducted by Uptime Institute on the data center industry, most operators employ a mix of strategies related to DC operations. With IT workloads spread across various services and data centers, Uptime shared that about one-third of all workloads shifted to the cloud, colocation, hosting, and Software-as-a-Service (SaaS) suppliers.
- As a matter of fact, according to Cisco, 92% of the workload in data centers will be cloud computing by 2022, which indicates that there is an important need for more advanced switching and data transfer devices available through hybrid PICs.
- Additionally, booming demand for larger bandwidth and strong adoption of cloud services by SMEs typically heightened amid COVID-19 boosted the demand for data centers. A growing trend of increasing switch data and transceiver data rates is driving PIC adoption.
North America to Hold Major Market Share
- In North America, the demand for photonic integrated circuits (PIC)-based products is driven by data centers and fiber optic communication WAN applications. A growing need to transmit data at fast speeds has led to an increase in cloud computing traffic, and the rapid introduction of the Internet of photonics is likely to lead to a flourishing IC industry across the region.
- According to Cloudscene, the United States holds the highest number of data centers globally, i.e., almost 2,700, which is almost 33% of the world's.
- In addition, service providers must meet the growing demand for network capacity as mobile, video, and cloud services increasingly become an integral part of their business. In particular, it is expected that companies will base their optical networks on PICs, which may have a positive effect on the growth of the market. International companies working on PIC-based solutions for telecommunications challenges, including IBM Corporation, Intel Corporation, and Cisco Systems Inc., have worked together with academia, business, and government partners throughout the region.
- Public-private partnerships have forged national research consortiums for smaller enterprises, such as the American Institute for Manufacturing Integrated Photonics (AIM Photonics, Rochester, NY) in the United States, the Canadian Photonic Industry Consortium Florida Photonics Cluster, and the Ontario Photonics Industry Network.
- With increasing data rates and bandwidth requirements, companies have started to push for a shift toward PICs. PICs working with light and photons instead of electricity and electrons could offer higher bandwidth and efficiency, making them well-suited for future applications. PICs have been finding new ways to improve technology, like quantum computing.
- In Dec 2022, OpenLight unveiled an 800 G DR8 photonic integrated circuit to advance the global data center interconnect industry. OpenLight has fabricated and tested these wafers using the open silicon photonics foundry platform with integrated lasers offered by open silicon photonics foundry platform with integrated lasers offered by Tower Semiconductor.
Photonic Integrated Circuit Industry Overview
The photonic integrated circuit market is moderately competitive and consists of several major players like Neophotonics Corporation, Poet Technologies, Cisco Systems Inc., and Infinera Corporation. In terms of market share, few major players currently dominate the market. However, with innovations and technological advancements, many companies are increasing their market presence by securing new contracts and tapping new markets. Some of the recent developments in the market are:
In March 2023, iPronics created a programmable photonic chip for wireless signal processing, data centers, machine learning, and other advanced computing applications. The company is developing programmable photonic systems based on optical hardware that can be adapted to meet the needs of different applications.
In March 2022, EFFECT Photonics and Jabil Photonics announced a cooperation with the aim of developing a new generation of coherent optical modules. The modules offer a unique solution for network operators and hyper-scalers seeking to benefit from QSFP-high DD's performance, small footprint, low power consumption and cost, field replaceability, and vendor interoperability for cloud DCIs (Data Center Interconnects). The next-generation coherent optical modules handle the increased demand for data flow, service continuity, security issues, global expansion, and sustainability.
In March 2022, ColorChip Group and Skorpios Technologies Inc., a vertically integrated pioneer in heterogeneously integrated silicon photonics, established a strategic partnership to use Skorpios' disruptive optical technology to produce optical modules at previously unheard-of prices. ColorChip will sell its brand of modules and private label modules for Skorpios to sell at various speeds and performance levels. Future products, such as Co-packaged Optics and Coherent Modules, will be developed in collaboration.
Photonic Integrated Circuit Market Leaders
NeoPhotonics Corporation
POET Technologies Inc
II-VI Incorporated
Infinera Corporation
Intel Corporation
*Disclaimer: Major Players sorted in no particular order
Photonic Integrated Circuit Market News
- May 2023: ANELLO Photonics announced a partnership with NVIDIA Inception to nurture start-ups that radically change industries with advances in technology. In order to produce low noise and low drift optical sensors, the company uses ANELLO's patented photonic gyroscope integrated circuit technology.
- August 2022: DustPhotonics announced a partnership with MaxLinear In order to demonstrate exceptional overall system performance in silicon photonics chipset with integrated lasers directly driven from a DSP without using an external driver chip.
- March 2022: Source Photonics announced the sampling of its Silicon-Photonics 400G DR4 QSFP56-DD products at OFC 2022 from March 6-10. SiliconPhotonic 400G DR4 transceivers have been designed in such a way as to enable seamless interaction with the company's pump laser chip. They exceed the specifications for IEEE 802.3bs 400GBASE-DR4 optical interface and 400G AUI-8 electrical client interface. They support a connection to 100 GB ASEDR1 and 100 GB ASEFR1 from more than 500m and 2km in length. With 8 W typical power consumption, it uses the 7 nm DSP and is packaged in a type 2 FP QSDD form factor with an MPO-12 connector.
Photonic Integrated Circuit Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitute Products
4.3 Assessment of the Impact of Key Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Growing Applications in Telecommunications and Data Centers
5.1.2 Investments and Research to Miniaturize the PICs
5.2 Market Challenges
5.2.1 Continued Demand for Traditional ICs
5.2.2 Optical Networks Capacity Crunch
6. MARKET SEGMENTATION
6.1 By Type of Raw Material
6.1.1 III-V Material
6.1.2 Lithium Niobate
6.1.3 Silica-on-silicon
6.1.4 Other Raw Materials
6.2 By Integration Process
6.2.1 Hybrid
6.2.2 Monolithic
6.3 By Application
6.3.1 Telecommunications
6.3.2 Biomedical
6.3.3 Data Centers
6.3.4 Other Applications (Optical Sensors (LiDAR), Metrology)
6.4 By Geography
6.4.1 North America
6.4.2 Europe
6.4.3 Asia Pacific
6.4.4 Rest of the World
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 NeoPhotonics Corporation
7.1.2 POET Technologies
7.1.3 II-VI Incorporated
7.1.4 Infinera Corporation
7.1.5 Intel Corporation
7.1.6 Cisco Systems Inc.
7.1.7 Source Photonics Inc.
7.1.8 Lumentum Holdings
7.1.9 Caliopa (Huawei Technologies Co. Ltd)
7.1.10 Effect Photonics
7.1.11 Colorchip Ltd
- *List Not Exhaustive
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
Photonic Integrated Circuit Industry Segmentation
A microchip contains two or more optical components forming a working circuit, which is sometimes referred to as an Integrated Photonics Circuit. This system is capable of detecting, generating, transporting, and processing.
The scope of the study covers photonic ICs, their growth and restricting factors, and the increased demand across various applications. The study also briefly analyzes the impact of macroeconomic trends on the market. The concept of the photonic integrated circuit is similar to electronic integrated circuits.
The report offers global photonic IC market growth, and the market is segmented by type of raw material (iii-v material, lithium niobate, silica-on-silicon, and other raw materials), integration process (hybrid and monolithic), application (telecommunications, biomedical, data centers, and other applications like optical sensors, LiDAR, and metrology), and geography (North America, Europe, Asia Pacific and the Rest of the World). The market sizes and forecasts are provided in terms of value in USD for all the above segments.
| By Type of Raw Material | |
| III-V Material | |
| Lithium Niobate | |
| Silica-on-silicon | |
| Other Raw Materials |
| By Integration Process | |
| Hybrid | |
| Monolithic |
| By Application | |
| Telecommunications | |
| Biomedical | |
| Data Centers | |
| Other Applications (Optical Sensors (LiDAR), Metrology) |
| By Geography | |
| North America | |
| Europe | |
| Asia Pacific | |
| Rest of the World |
Photonic Integrated Circuit Market Research Faqs
How big is the Photonic Integrated Circuit Market?
The Photonic Integrated Circuit Market size is expected to reach USD 15.11 billion in 2024 and grow at a CAGR of 20.47% to reach USD 38.35 billion by 2029.
What is the current Photonic Integrated Circuit Market size?
In 2024, the Photonic Integrated Circuit Market size is expected to reach USD 15.11 billion.
Who are the key players in Photonic Integrated Circuit Market?
NeoPhotonics Corporation , POET Technologies Inc, II-VI Incorporated , Infinera Corporation and Intel Corporation are the major companies operating in the Photonic Integrated Circuit Market.
Which is the fastest growing region in Photonic Integrated Circuit Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Photonic Integrated Circuit Market?
In 2024, the Asia Pacific accounts for the largest market share in Photonic Integrated Circuit Market.
What years does this Photonic Integrated Circuit Market cover, and what was the market size in 2023?
In 2023, the Photonic Integrated Circuit Market size was estimated at USD 12.54 billion. The report covers the Photonic Integrated Circuit Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Photonic Integrated Circuit Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Photonic Integrated Circuit Industry Report
Statistics for the 2024 Photonic Integrated Circuit market share, size and revenue growth rate, created by Mordor Intelligenceā¢ Industry Reports. Photonic Integrated Circuit analysis includes a market forecast outlook to for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
