Photonic Integrated Circuit Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

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

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.