The photonic integrated circuit (PIC) market provides solutions for optical signal processing that involve generation, modulation, switching, amplification, detection, and processing of photonic signals. Photonic ICs leverage the benefits of optics for applications that require massive data throughput and wide bandwidth capacity. Widely adopted in the telecommunications industry, PICs enable high-speed data transmission over fiber optic cables for core infrastructure as well as fiber-to-the-home/business applications. They find significant usage in metro and long-haul networks to boost capacities for 5G network deployment, cloud infrastructure build-out, and networking upgrades.
The global photonic IC market is estimated to be valued at US$ 3068.77 Mn in 2023 and is expected to exhibit a CAGR of 33% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
One of the key drivers for the photonic IC market expansion is the rising demand for high-speed data connectivity solutions in data centers and telecommunication sector. With explosion of data usage driven by IoT, big data analytics, cloud computing and video streaming services, there is an ever-increasing demand to scale-up network infrastructure capacities. Traditional electrical interconnects are nearing their limits in terms of bandwidth and power consumption. Photonic ICs provide a sustainable solution to cater exponentially rising bandwidth needs in an energy efficient manner. Their capabilities of ultra-high data rates through optical signaling makes them an attractive substitute to copper cables. This has propelled the adoption of PICs extensively in core networks, long-haul and metro networks as well as inside data centers. Furthermore, deployment of 5G is expected to further amplify the need for bolstering capacities of both wireless and wired networks, thus presenting lucrative business opportunities for photonic IC vendors.
The photonic IC market can be segmented into integrated optical circuits, optoelectronic integrated circuits, and hybrid integrated circuits. The integrated optical circuits segment currently dominates the market and is expected to continue its dominance over the forecast period. This is because integrated optical circuits provide benefits such as high-speed transmission, low power consumption, and miniaturization compared to discrete components.
Political: There are no major political risks impacting the photonic IC market currently. Most governments across the world are focusing on advancing semiconductor and photonics technologies to drive innovation.
Economic: The growth of the global telecommunications industry and increasing demand for high-speed data transmission are driving strong economic growth of the photonic IC market. The forecast period is expected to see steady economic growth supporting the market.
Social: Increasing internet penetration worldwide and the rising use of smartphones, tablets, and other connected devices are enhancing the social need for high-speed data networks. This is positively impacting the demand for photonic ICs.
Technological: Advancements in materials and fabrication technologies are allowing higher component integration density and performance in photonic ICs. Transition to silicon photonic ICs is also a key technological driver as it allows monolithic electronic-photonic integration.
The Global Photonic IC Market Growth is expected to witness high over the forecast period supported by increasing demand for bandwidth-intensive applications.
The global photonic IC market is estimated to be valued at US$ 3068.77 Mn in 2023 and is expected to exhibit a CAGR of 33% over the forecast period 2023 to 2030.
Asia Pacific as the fastest growing regional market. This is mainly attributed to the presence of key manufacturers, growing optical telecom infrastructure, and increasing industrial and consumer demand in countries such as China, Taiwan, and Japan.
Key players operating in the photonic IC market are Agilent Technologies, Inc., Intel Corporation, Aifotec AG, Infinera Corporation, Alcatel-Lucent, Hewlett Packard, Avago Technologies, Finisar Corporation, Ciena Corporation, Enablence Technologies Inc., and Emcore Corporation. Key players are focusing on new product launches and expanding manufacturing capacities to gainmarket share. For instance, Intel launched advanced silicon photonics chips to enable high-performance optical I/O for AI and cloud computing workloads in 2019.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it