Photonic Integrated Circuit Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 15.11 Billion |
| Market Size (2029) | USD 38.35 Billion |
| CAGR (2024 - 2029) | 20.47 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | Asia Pacific |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Photonic Integrated Circuit Market Analysis
The Photonic Integrated Circuit Market size is estimated at USD 15.11 billion in 2024, and is expected to reach USD 38.35 billion by 2029, growing at a CAGR of 20.47% during the forecast period (2024-2029).
Growing Applications Drive Photonic Integrated Circuit Market
- The Photonic Integrated Circuit (PIC) market is experiencing robust growth due to expanding applications in telecommunications and data centers. PICs provide superior performance compared to traditional integrated circuits, offering advantages like higher speed, increased bandwidth, and improved power efficiency. These benefits make PICs a disruptive technology for short-range connections in data centers and long-haul optical communication networks.
- Efficiency improvement: PICs reduce power consumption in critical applications by at least 50%.
- Frequency advantage: PIC frequencies are 1,000 to 10,000 times higher than those of microelectronics.
- Higher energy efficiency: The technology supports much higher frequencies while being more energy-efficient than traditional ICs.
Telecommunications and Data Center Applications Fuel Growth:
- Telecommunications is seeing widespread PIC adoption due to the growing demand for high-speed internet communication systems. With mobile data usage expanding by about 40% annually, PICs play a key role in meeting bandwidth needs. North America leads in mobile data consumption, with traffic forecasted to reach 48 GB per month per smartphone by the end of 2023.
- Space and cost savings: PICs integrated into optical communication systems provide significant space, power, and cost reductions.
- Capacity enhancement: The technology increases transmission capacity while enabling new functionalities.
- Data center innovations: Hybrid photonics for long-haul communication networks in data centers convert photonic data to electrical signals for processing, facilitating the shift towards photonic switching components.
- Investments and Research Drive Miniaturization: The push for miniaturizing PICs is driven by sectors like automotive, aeronautics, and telecommunications. Companies are developing smaller, cost-effective, and reliable PICs for use in devices like spectrometers and LiDAR.
- Recent advances: In August 2020, researchers developed the smallest on-chip optical modulator with a switching speed of up to 11 Gbit/s.
- Mitsubishi’s innovations: The company is exploring new silicon photonics building blocks to extend processor capabilities.
- Emerging Applications in Sensors and Metrology: The rising use of PICs in optical sensors, including LiDAR for Advanced Driver Assistance Systems (ADAS), is boosting the market. The increasing demand for high-precision distance sensors in industries like machinery and inspection contributes to market growth.
- Intel’s investment: Mobileye plans to use PICs in its next-gen LiDAR technology by 2025.
- New collaborations: Tower Semiconductor’s partnership with AnelloPhotonics is developing low-loss Silicon Optical Waveguide technology for automotive LiDAR and other applications.
- Market Dynamics and Future Outlook: Strategic partnerships and acquisitions define the market, with companies securing new contracts and expanding into different sectors. The future of the PIC market looks promising, with silicon photonic chips expected to become widespread in high-speed data transmission between data centers over the next three years.
- Partnership-driven growth: In March 2022, Ansys and GlobalFoundries (GF) partnered to enhance photonic design capabilities.
- Long-term predictions: Alibaba's DAMO Academy predicts silicon photonic chips will replace electronic chips in various computer industries within 5-10 years.
Photonic Integrated Circuit Market Trends
Data Center Segment Dominates Market
Data center applications are leading the Photonic Integrated Circuit (PIC) market, accounting for 67.88% of the market share in 2021. This dominance is driven by the need for high-speed data transmission and the rapid expansion of cloud computing infrastructure.
- Traffic surge: Cisco’s Cloud Index forecasts North America generating 7.7 ZB of cloud traffic annually by 2021, highlighting the growing need for efficient data processing.
- Data center concentration: The U.S. has about 2,600 data centers, representing 33% of the global total, creating a sizable market for PIC solutions.
- Collaborative innovation: Companies like IBM, Intel, and Cisco are developing PIC-based solutions in collaboration with academia and government.
- Growth forecast: The segment is projected to grow from USD 5,429.64 million in 2021 to USD 17,485.97 million by 2027, with a CAGR of 19.96%.
Asia-Pacific Witness Major Growth
Asia-Pacific is the fastest-growing region in the PIC market, expected to achieve a CAGR of 23.36% between 2022 and 2027, driven by technological advancements and increasing investment.
- Market surge: The Asia-Pacific PIC market is forecasted to grow from USD 1,615.15 million in 2021 to USD 6,150.74 million by 2027.
- Innovative breakthroughs: In November 2021, researchers at the University of Illinois created a miniature photonic circuit using sound waves to isolate and regulate light.
- Strategic partnerships: Collaborations like the one between Ansys and GF in 2022 are driving advancements in photonic design for data centers and supercomputing in the region.
- Government support: Public-private initiatives, such as the Ontario Photonics Industry Network, are boosting PIC innovation in the region.
Photonic Integrated Circuit Industry Overview
Competitive Landscape Analysis: The Photonic Integrated Circuit (PIC) market is dominated by a few global players, with companies such as Neophotonics Corporation, Poet Technologies, II-VI Incorporated, and Intel Corporation leading the market. These companies have strong geographical presence and robust market shares, shaping the competitive landscape of the industry.
Technological leadership: Leading companies invest heavily in research and development, focusing on innovation and miniaturization. For example, II-VI Incorporated’s high-efficiency multifunctional metalenses are designed for ultracompact optical sensors.
Strategic partnerships: Collaborations are key to maintaining market leadership. Ansys’ partnership with GF is one example, expanding photonic design capabilities across sectors.
Strategies for Future Success: Companies aiming for future success in the PIC market should focus on several critical strategies:
R&D investment: Investing in the advancement of PIC technology, particularly in miniaturization and integration, is crucial.
Cost-effective solutions: Expanding manufacturing capabilities to lower production costs and improve scalability is necessary.
Partnerships and collaborations: Strategic partnerships like POET Technologies' with Liobate Technologies will enable faster product development.
Diversification: Exploring new applications beyond traditional sectors, including automotive, aerospace, and biomedical industries, will open new market opportunities.
Photonic Integrated Circuit Market Leaders
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NeoPhotonics Corporation
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POET Technologies Inc
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II-VI Incorporated
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Infinera Corporation
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Intel Corporation
*Disclaimer: Major Players sorted in no particular order
Photonic Integrated Circuit Market News
- March 2024 - POET Technologies announced its entry into the optical module market with an 800G pluggable transceiver called Wavelight for artificial intelligence and cloud data center markets. The Wavelight transceiver incorporates POET's Optical Interposer technology and related optical engine products, designed for use in 800 gigabit ethernet links for up to 2km of reach over single mode fiber.
- March 2024 - Infinera announced ICE-D, a new line of high-speed intra-data center optics based on monolithic indium phosphide photonic integrated circuits. The ICE-D technology combines multiple optical functions onto a single photonic integrated circuit, designed to provide intra-data center connectivity at speeds of 1.6 terabits per second and greater."
Photonic Integrated Circuit Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Intensity of Competitive Rivalry
4.2.5 Threat of Substitute Products
4.3 Assessment of the Impact of Key Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Growing Applications in Telecommunications and Data Centers
5.1.2 Investments and Research to Miniaturize the PICs
5.1.3 Growing Applications Drive Photonic Integrated Circuit Market
5.1.4 Emerging Applications in Sensors and Metrology
5.2 Market Challenges
5.2.1 Continued Demand for Traditional ICs
5.2.2 Optical Networks Capacity Crunch
6. MARKET SEGMENTATION
6.1 By Type of Raw Material
6.1.1 III-V Material
6.1.2 Lithium Niobate
6.1.3 Silica-on-silicon
6.1.4 Other Raw Materials
6.2 By Integration Process
6.2.1 Hybrid
6.2.2 Monolithic
6.3 By Application
6.3.1 Telecommunications
6.3.2 Biomedical
6.3.3 Data Centers
6.3.4 Other Applications (Optical Sensors (LiDAR), Metrology)
6.4 By Geography
6.4.1 North America
6.4.2 Europe
6.4.3 Asia
6.4.4 Australia and New Zealand
6.4.5 Latin America
6.4.6 Middle East and Africa
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 NeoPhotonics Corporation
7.1.2 POET Technologies
7.1.3 II-VI Incorporated
7.1.4 Infinera Corporation
7.1.5 Intel Corporation
7.1.6 Cisco Systems Inc.
7.1.7 Source Photonics Inc.
7.1.8 Lumentum Holdings
7.1.9 Caliopa (Huawei Technologies Co. Ltd)
7.1.10 Effect Photonics
7.1.11 Colorchip Ltd
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
Photonic Integrated Circuit Industry Segmentation
A microchip contains two or more optical components forming a working circuit, which is sometimes referred to as an Integrated Photonics Circuit. This system is capable of detecting, generating, transporting, and processing.
The scope of the study covers photonic ICs, their growth and restricting factors, and the increased demand across various applications. The study also briefly analyzes the impact of macroeconomic trends on the market. The concept of the photonic integrated circuit is similar to electronic integrated circuits.
The photonic integrated circuit market is segmented by type of raw material (iii-v material, lithium niobate, silica-on-silicon, and other raw materials), integration process (hybrid and monolithic), application (telecommunications, biomedical, data centers, and other applications [optical sensors[LiDAR], and metrology]), and geography (North America, Europe, Asia Pacific and the rest of the World). The Market Size and Forecasts are Provided in Terms of Value in USD for all the Above Segments.
| By Type of Raw Material | |
| III-V Material | |
| Lithium Niobate | |
| Silica-on-silicon | |
| Other Raw Materials |
| By Integration Process | |
| Hybrid | |
| Monolithic |
| By Application | |
| Telecommunications | |
| Biomedical | |
| Data Centers | |
| Other Applications (Optical Sensors (LiDAR), Metrology) |
| By Geography | |
| North America | |
| Europe | |
| Asia | |
| Australia and New Zealand | |
| Latin America | |
| Middle East and Africa |
Photonic Integrated Circuit Market Research Faqs
How big is the Photonic Integrated Circuit Market?
The Photonic Integrated Circuit Market size is expected to reach USD 15.11 billion in 2024 and grow at a CAGR of 20.47% to reach USD 38.35 billion by 2029.
What is the current Photonic Integrated Circuit Market size?
In 2024, the Photonic Integrated Circuit Market size is expected to reach USD 15.11 billion.
Who are the key players in Photonic Integrated Circuit Market?
NeoPhotonics Corporation, POET Technologies Inc, II-VI Incorporated, Infinera Corporation and Intel Corporation are the major companies operating in the Photonic Integrated Circuit Market.
Which is the fastest growing region in Photonic Integrated Circuit Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Photonic Integrated Circuit Market?
In 2024, the Asia Pacific accounts for the largest market share in Photonic Integrated Circuit Market.
What years does this Photonic Integrated Circuit Market cover, and what was the market size in 2023?
In 2023, the Photonic Integrated Circuit Market size was estimated at USD 12.02 billion. The report covers the Photonic Integrated Circuit Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Photonic Integrated Circuit Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Photonic Integrated Circuit Industry Report
Photonic Integrated Circuit Market Research
Our comprehensive industry research on the Photonic Integrated Circuit (PIC) market highlights key trends, innovations, and growth drivers shaping this rapidly evolving sector. The report delves into applications across telecommunications, data centers, and automotive industries, emphasizing the role of PIC technology in enhancing bandwidth, power efficiency, and transmission speed. Stakeholders benefit from insights into emerging market opportunities, R&D investments, and strategic partnerships, positioning them to capitalize on innovations like silicon photonics and hybrid integration. All findings are presented in an easy-to-read report pdf format for strategic decision-making.
The report covers essential metrics such as the market's regional segmentation, technological advancements, and the influence of key players driving innovation in optical communication systems and sensor technology. Detailed analysis of partnerships, collaborations, and investment patterns offers stakeholders a clear view of the industry's competitive landscape. By providing actionable data and future projections, this report serves as a critical tool for businesses looking to stay ahead in the integrated photonics market.
