US Photonics Market Size

US Photonics Market Analysis

The United States photonics market was valued at USD 111.07 billion the previous year and is expected to register a CAGR of 6.86%, reaching USD 159.83 billion by the next five years.

• Photonics is widely regarded as a critical enabling technology for developing smart systems that make efficient use of 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. 
• 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.
• 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 atmosphere's distribution of gases and contaminants 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 defence, corridor mapping and topographical survey, automotive, mining, oil and gas, and other verticals, which are increasing the scope of the market.
• The presence of industry giants such as Google, Microsoft, and Facebook is the primary force driving the US market, necessitating 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 US silicon photonics devices industry has encouraged organizations and start-ups to invest in the expanding photonics market.
• However, compared to conventional products, the high initial cost of silicon-enabled photonic products and devices hinders technology deployment in many fields. While the technology provides higher performance and efficiency, photonics-based devices remain inaccessible to many small- and medium-sized end-users in various verticals due to limited budgets.
• The COVID-19 pandemic influenced the overall semiconductor manufacturing market from the demand and supply sides. In addition, the global lockdowns and closure of semiconductor plants also fueled the supply shortage. The effects were also reflected in the studied market. However, many of these effects were short-term. Precautions by governments worldwide to support automotive and semiconductor sectors helped revive industry growth.