US Photonics Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

US Photonics Market Trends

Emergence of Silicon-based Photonics Applications

Silicon photonics is revolutionizing the semiconductor industry by offering significant advantages over traditional electrical conductors in high-speed transmission systems. This technology is pushing transmission speeds up to 100 Gbps, with industry leaders like IBM, Intel, and Kothura achieving major breakthroughs in this domain. The technology is particularly valuable for data centers and high-power computing applications due to its energy-efficient data transmission and processing capabilities. In March 2023, Cadence Design Systems Inc. announced a collaboration with GlobalFoundries to accelerate silicon photonics development for various applications, including 5G communications, hyperscale computing, healthcare, automotive, IoT, and aerospace systems. Additionally, in July 2023, SiFotonics Technologies launched new 800G silicon photonics solutions with low power dissipation specifically designed for data centers, artificial intelligence, and machine learning computing applications.

The adoption of silicon photonics is expanding rapidly across various sectors, particularly in medical applications where many start-ups are leveraging silicon-integrated optics as a manufacturing platform. According to the US Census Bureau, the medical equipment and supplies manufacturing industry revenue in the United States is projected to reach USD 43.51 billion by 2023, indicating substantial growth potential for silicon photonics applications in healthcare. The technology's versatility is further demonstrated by its crucial role in submarine cable infrastructure, with the US Naval Institute reporting that the United States is connected to the world through approximately 88 fiber optics undersea cables, including 17 scheduled for completion between 2022 and 2024. These developments are complemented by innovations in consumer health applications, as evidenced by Rockley's recent shipment of its VitalSpexTM biosensing platform in 2022-23, which is expected to accelerate the integration of silicon photonics-based biosensors in wearable devices from major brands.

Increasing Focus on High-performance and Eco-friendly Solutions

The photonics industry is experiencing significant growth driven by the increasing demand for high-performance and environmentally sustainable solutions across various sectors. According to the Department of Energy, the widespread adoption of LED lighting alone could save approximately 348 TWh of electricity and generate total savings of over USD 30 billion by 2027. The Biden Administration's implementation of new energy efficiency rules in April 2022 is projected to help families save USD 100 yearly, while potentially reducing carbon emissions by 222 million metric tons over the next 30 years—equivalent to the emissions generated by 28 million homes in one year. These initiatives demonstrate the growing emphasis on developing eco-friendly photonic solutions that deliver both environmental benefits and improved performance.

The industry's commitment to sustainability is further evidenced by the increasing integration of photonics in renewable energy applications and energy-efficient lighting systems. In industrial applications, photonics-based processes have demonstrated remarkable efficiency, consuming 30% less energy than conventional machines while providing faster operating times and material wastage savings of up to 94%. The technology's environmental impact extends to the healthcare sector, where photonics is enabling the development of more energy-efficient and precise medical devices. This is particularly significant given the projected increase in national health expenditure, which is expected to reach USD 7.174 trillion by 2031, up from USD 4.439 trillion in 2022, as reported by CMS. The growing adoption of these eco-friendly solutions is also driven by their superior performance characteristics, including enhanced precision, faster processing speeds, and improved reliability across applications.

Segment Analysis: By Application

Image Capture and Display Segment in US Photonics Market

The Image Capture and Display segment maintains its dominant position in the US photonics market, commanding approximately 26% market share in 2024. This segment's leadership is driven by the increasing adoption of advanced display technologies across consumer electronics and professional applications. The segment encompasses a broad range of technologies, including OLED, OPV, LED, and Flexible Electronics based on OLAE. The growing demand for displays and TVs with cutting-edge technologies, coupled with the rising popularity of AR and VR applications, particularly in gaming and entertainment, continues to fuel segment growth. The segment's strength is further reinforced by the expanding use of digital signage across industries, with research indicating that 74% of US retailers consider creating engaging in-store customer experiences crucial to their operations. The integration of optical imaging technologies is also enhancing display capabilities, further solidifying this segment's market position.

Data Communication Segment in US Photonics Market

The Data Communication segment emerges as the fastest-growing segment in the US photonics market, projected to grow at approximately 9% during 2024-2029. This remarkable growth is primarily driven by the increasing adoption of optical solutions in communication technologies and the expanding infrastructure requirements for 5G networks. The segment's growth is further accelerated by the rising demand for high-speed data transmission in data centers and the implementation of optical fiber networks. The advancement in silicon photonics technology and the development of innovative optical transceivers are creating new opportunities in this segment. Major technology companies are actively investing in integrated photonics solutions to address data center traffic bottlenecks and enhance network efficiency, particularly in cloud computing and telecommunications applications.

Remaining Segments in US Photonics Market by Application

The remaining segments in the US photonics market include Surveying and Detection, Production Technology, Medical Technology, Lighting, and Other Applications, each serving distinct industrial needs. The Surveying and Detection segment is gaining prominence in defense and security applications, particularly in LiDAR technology and surveillance systems. The integration of optical sensors in these applications is enhancing accuracy and reliability. Production Technology applications are revolutionizing manufacturing processes through laser-based solutions and automation. The Medical Technology segment is advancing healthcare through innovative diagnostic and therapeutic applications, leveraging optical imaging techniques for improved outcomes. The Lighting segment is driving energy efficiency through LED and solid-state lighting technologies. Other Applications encompass diverse areas such as research, traffic monitoring, and photovoltaic applications, contributing to the market's overall technological advancement and diversification. The use of optoelectronics in these areas is further enhancing the performance and efficiency of various applications.