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Photonics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Photonics Market is segmented by Application (Surveying and Detection, Production Technology, Data Communication, Image Capture, and Display, Medical Technology, Lighting), and Geography.

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Market Snapshot

Photonics Market Summary
Study Period: 2020-2027
Base Year: 2021
Fastest Growing Market: North America
Largest Market: Asia Pacific
CAGR: 7.54 %
Photonics Market Major Players

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Market Overview

The Global Photonics Market was valued at USD 722.31 billion in 2021, and it is expected to reach USD 1089.00 billion by 2027, registering a CAGR of approximately 7.54% during 2022-2027.

  • Photonics is widely regarded as a critical enabling technology for developing smart systems that efficiently use energy without sacrificing overall system efficiency. Many verticals, including healthcare, automotive, communications, manufacturing, and retail, are leveraging the technology to attain higher efficiency, driving growth. The investments from these sectors also have witnessed significant growth in the recent past.
  • With photonics being a core technology of multiple industries, the consumption of the technology is witnessing rapid growth, with the market expanding in new verticals. Thus, the market is witnessing a robust growth rate.
  • Over the past few years, there has been an increasing trend of LiDAR or additive manufacturing in photonics. LiDAR has been used to study the distribution of gases and contaminants in the atmosphere for decades. In recent years, it has become a critical technology for autonomous driving. The advancements in LiDAR mapping systems and their enabling technologies penetrated different verticals, like aerospace and defense, corridor mapping and topographical survey, automotive, mining, oil and gas, and other verticals, which are increasing the scope of the market.
  • Compared to conventional products, the high initial cost of silicon-enabled products and devices hinders the deployment of technology in many fields. While the technology provides higher performance and efficiency, photonics-based devices remain inaccessible to a majority of the small- and medium-sized end-users in various verticals due to limited budgets.
  • The COVID-19 outbreak has affected many industries. Due to the nationwide lockdown globally, many photonic devices manufacturing companies face supply chain interruption and manufacturing inefficiency. However, the COVID-19 outbreak has expanded the scope of photonic devices in the healthcare industry. Moreover, with the growing adoption of technologies, like facial recognition amid the pandemic, the scope of photonic sensors may expand due to its technological advancement.

Scope of the Report

Photonics is an area of study that involves the use of radiant energy (such as light), whose fundamental element is the photon and waves that can be used to cure diseases, explore the universe, and even solve crimes. Advancements in the photonics market have been stimulated owing to developments in fiber optics and the introduction of electricity, which have boosted the conversion. The evolvement of photonics has also resulted in a steady increase in the performance of both OPV and OLED technologies.

The Photonics Market is segmented by Application (Surveying and Detection, Production Technology, Data Communication, Image Capture and Display, Medical Technology, and Lighting), and Geography.

Application
Surveying and Detection
Production Technology
Data Communication
Image Capture and Display
Medical Technology
Lighting
Other Applications
Geography
North America
United States
Canada
Europe
United Kingdom
Germany
France
Italy
Rest of Europe
Asia-Pacific
Japan
China
India
Taiwan
South Korea
Rest of Asia-Pacific
Rest of the World

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Key Market Trends

Applications of Silicon Photonics to Gain Market Share in Data Communication

  • The growing use of optical solutions in communication technologies, such as optical broadband, is expected to drive the demand for technology in the market, with the segment commanding a major market share.
  • As the growing use of optical networks is part of the infrastructure, the investment from telecommunication companies in enhancing the legacy networks is expected to drive the demand. Telephone companies were the first to replace their old copper wire systems with optical fiber lines. Currently, telephone companies use optical fiber throughout their systems as the backbone architecture and a long-distance connection between the city phone systems.
  • Moreover, with the proliferation of technologies and the growing consumption of video content over the internet, the demand for broadband is increasing worldwide. According to TeleGeography’s submarine cable map, submarine cables act as the backbone of the internet. There are about 300 subsea cables that interconnect countries and continents.
  • In the past few years, cloud and content providers attempted to attract more users and offer reliable bandwidth-intensive services, thus increasing the popularity of the submarine infrastructure. The lifetime of submarine cables is expected to be about 25 years.
  • Photonics provides novel and disruptive techniques required to cope with the increasing bandwidth capacity requirements, particularly in the backbone networks.
  • Fiber optics can also handle real-time data collection and transfer, as it can support the bandwidth levels for futuristic technologies, such as 5G, IoT, and Big Data. In the process, mobile edge computing and several small cells (or nodes) are needed to eliminate network bottlenecks. These node deployments often utilize the technology of the millimeter-wave spectrum by relying heavily on the fiber-cabled connections for the backhaul portion of the network.
Photonics Market: Number of Data Centers, Global, 2021

North America Expected to Register Significant Growth

  • The North American photonics market is expected to grow significantly over the forecast period, with the United States dominating the regional market. Growth in this region's photonics market is strongly correlated with growth in adjacent markets such as lighting, safety and protection applications, healthcare, and production technology.
  • In addition, the United States dominates the data center hardware market, which is still one of the most important applications for photonics. The presence of several market incumbents, such as IBM, Intel Corp., and HP, along with increased access to R&D funds, is expected to drive growth in this region. The United States has the highest concentration of photonics-based application companies that rely heavily on consumer feedback.
  • The presence of industry giants such as Microsoft and Facebook is the primary force driving the US market, necessitating the optimization of the data transmission process for respective data centers. The country also provides a favorable environment for technological advancements and expansions. Furthermore, the significant funding landscape in the United States silicon photonics devices industry has encouraged organizations and start-ups to invest in the expanding photonics market.
  • Photonics advancements are impacting many areas of the economy significantly, and Canada is well placed to build a strong position in this future industry. It has many world-class physicists and engineers who work in optics and photonics.
  • Furthermore, a team of engineers created a new camera design that replaces lenses with an ultra-thin optical phased array (OPA), allowing smartphone manufacturers to make their devices slimmer. Similarly, similar trends are expected to generate significant demand for photonics adoption in the country over the forecast period.
  • It is expected that wireless operators in Canada will invest approximately USD 25.8 billion in deploying 5G infrastructure between 2020 and 2026; as a result, the government is also encouraging telecom equipment manufacturing. These initiatives will broaden the scope of the country's 5G infrastructure and provide a massive opportunity for market study vendors.
Photonics Market - Growth Rate by Region (2022 - 2027)

Competitive Landscape

The photonics market is highly fragmented. The major players have used various strategies, such as expansions, new product launches, partnerships, agreements, joint ventures, and acquisitions, among others, to increase their footprints in this market. Key players in the market are Hamamatsu Photonics KK, Intel Corporation, Alcatel-Lucent SA, etc.

  • March 2022 - IPG Photonics recently developed the GLPN-500-R laser, which combines single-mode beam quality, short wavelength, short pulse duration, and higher power to enable the exploration of new applications.
  • February 2022 - Intel announced its plan to acquire Tower Semiconductor for USD 5.4 billion. The company will expand its manufacturing capabilities as a foundry and add to its global portfolio as a semiconductor manufacturer. Tower Semiconductor is known for significant partnerships and collaborations for laser-power applications and photonics and semiconductor manufacturing facilities in Israel that will be part of Intel's aggressive plans to expand its semiconductor foundry business.

Major Players

  1. Hamamatsu Photonics KK

  2. Intel Corporation

  3. POLATIS INCORPORATED (HUBER+SUHNER)

  4. Alcatel-Lucent SA (Nokia Corporation)

  5. Molex Inc. (Koch Industries)​

Photonics Market Concentration

Recent Developments

  • May 2022 - ams OSRAM AG announced the launch of the OSLON Optimal family of LEDs for horticulture lighting, based on the latest ams OSRAM 1mm2 chip, which offers an outstanding combination of high efficiency, reliable performance, and great value.
  • May 2022 - Hamamatsu Photonics developed a technology that upgrades the spatial resolution of two-photon excitation fluorescence microscopy. The technology is ideal for high-precision observations of deep regions in biological samples. It promises to be an integral tool for understanding brain functions. The development could be achieved through intensive research efforts utilizing the company's spatial light modulators (SLM) and the optical control technology developed over the years.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Value Chain Analysis

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Threat of New Entrants

      2. 4.3.2 Bargaining Power of Buyers/Consumers

      3. 4.3.3 Bargaining Power of Suppliers

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 Assessment of the Impact of COVID-19 on the Market

    5. 4.5 Technology Snapshot

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Emergence of Silicon-based Photonics Applications

      2. 5.1.2 Increasing Focus on High Performance and Eco-friendly Solutions

    2. 5.2 Market Restraints

      1. 5.2.1 High Initial Cost of Photonics-enabled Devices

  6. 6. MARKET SEGMENTATION

    1. 6.1 Application

      1. 6.1.1 Surveying and Detection

      2. 6.1.2 Production Technology

      3. 6.1.3 Data Communication

      4. 6.1.4 Image Capture and Display

      5. 6.1.5 Medical Technology

      6. 6.1.6 Lighting

      7. 6.1.7 Other Applications

    2. 6.2 Geography

      1. 6.2.1 North America

        1. 6.2.1.1 United States

        2. 6.2.1.2 Canada

      2. 6.2.2 Europe

        1. 6.2.2.1 United Kingdom

        2. 6.2.2.2 Germany

        3. 6.2.2.3 France

        4. 6.2.2.4 Italy

        5. 6.2.2.5 Rest of Europe

      3. 6.2.3 Asia-Pacific

        1. 6.2.3.1 Japan

        2. 6.2.3.2 China

        3. 6.2.3.3 India

        4. 6.2.3.4 Taiwan

        5. 6.2.3.5 South Korea

        6. 6.2.3.6 Rest of Asia-Pacific

      4. 6.2.4 Rest of the World

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles*

      1. 7.1.1 Hamamatsu Photonics KK

      2. 7.1.2 Intel Corporation

      3. 7.1.3 Polatis Photonics Inc.

      4. 7.1.4 Alcatel-Lucent SA

      5. 7.1.5 Molex Inc. (Koch Industries)

      6. 7.1.6 Infinera Corporation

      7. 7.1.7 NEC Corporation

      8. 7.1.8 Innolume GmbH

      9. 7.1.9 Finisar Corporation

      10. 7.1.10 IPG Photonics

      11. 7.1.11 AMS OSRAM AG

      12. 7.1.12 Philips Photonics (Trumpf GmbH)

      13. 7.1.13 LEA Photonics SAS

      14. 7.1.14 Schott AG

      15. 7.1.15 Carl Zeiss AG (Scantinel Photonics GmbH)

  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OUTLOOK OF THE MARKET

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Frequently Asked Questions

The Photonics Market market is studied from 2020 - 2027.

The Photonics Market is growing at a CAGR of 7.54% over the next 5 years.

North America is growing at the highest CAGR over 2021- 2026.

Asia Pacific holds highest share in 2021.

Hamamatsu Photonics KK, Intel Corporation, POLATIS INCORPORATED (HUBER+SUHNER) , Alcatel-Lucent SA (Nokia Corporation) , Molex Inc. (Koch Industries)​ are the major companies operating in Photonics Market.

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