Market Trends of US Photonics Industry
Emergence of Silicon-based Photonics Applications to Drive the Market
- Silicon photonics is an evolving branch of photonics, offering a clear advantage over electric conductors used in semiconductors, which are used in high-speed transmission systems. This technology is expected to push the transmission speed up to 100 Gbps, with companies like IBM, Intel, and Kothura, achieving breakthroughs. Besides, this technology is revolutionizing the semiconductor industry, enabling high-speed data transfer and processing.
- Moreover, silicon-based photonics provides energy-efficient data transmission and processing solutions, making it suitable for applications where power consumption is a concern, such as data centers and high-power computing.
- The growth in internet traffic is not only accelerating the need for next-generation technology to support higher port density and faster speed transitions but is also accompanied by large physical data center sizes and faster connectivity between the data centers. As the data rates and distances to carry high-speed data are increasing, the limitations of traditional copper cable and multimode fiber-based solutions are becoming apparent, and the industry is shifting towards adopting single-mode fiber-optic solutions.
- Silicon-based photonics is expected to play a significant role in the evolution of data centers in the short term for 100G and then 400G and 800G pluggables. It will also be an enabling technology for disaggregating data centers and a possible future CPO approach. The technology is increasingly used for 500 m reach DR-standard connections but is also used with coherent technology in datacom applications. Moreover, the market is also witnessing increasing demand for 400ZR standard technology.
- Additionally, with the rising implementation of silicon photonics in medical applications, many start-ups have started using silicon-integrated optics as a manufacturing platform. According to US Census Bureau, the industry revenue of medical equipment and supplies manufacturing in the United States is expected to reach USD 43.51 billion by 2023. Whereas the national health expenditure in the country is expected to reach USD 7.174 trillion by 2031, which was USD 4.439 trillion in 2022, as stated by CMS.
- Consumer health development continues, with Rockley announcing the shipment of its VitalSpexTM biosensing platform in 2022-23. Such trends are expected to boost the integration of silicon photonics-based biosensors in wearables from prominent brands like Apple or Huawei.
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Data Communication Application Segment is Expected to Hold Significant Market Share
- 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 prominent 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. Telephone companies use optical fiber 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. Moreover, according to the US Naval Institute, of more than 400 fiber optics undersea cables, the United States is connected to the world through approximately 88, including 17 scheduled to be completed between 2022 and 2024.
- According to Global System for Mobile Communications (GSMA), the 5G penetration in the United States is expected to overtake 4G by 2025. In addition, the government is allocating several funds for the faster deployment of 5G services in the region. In April 2023, the Biden-Harris Administration launched the Public Wireless Supply Chain Innovation Fund, which will invest USD 1.5 billion to develop open and interoperable networks. The initial round of funding will help to ensure that the future of 5G and next-gen wireless technology is built by the United States and its global allies and partners.
