Global Silicon Photonics Market - 2024-2031

Overview

Global Silicon Photonics Market reached US$ 1.6 Billion in 2023 and is expected to reach US$ 11.4 Billion by 2031, growing with a CAGR of 27.9% during the forecast period 2024-2031.

Silicon photonics offers several advantages over conventional copper-based interconnects such as less power usage, greater information rates and immunity to electromagnetic interference. The advantages make silicon photonics an attractive choice for applications requiring high-performance, reliable and energy-efficient data transmission.

Globally, growing product launches by the major key players help to boost market growth over the forecast period. For instance, on June 06, 2022, OpenLight, launched a brand identity and technology portfolio to usher in the world's first open silicon photonics platform with integrated lasers. Intending to speed up the creation of high-performance photonic integrated circuits (PICs) for applications such as datacom, telecom, LiDAR, healthcare, HPC, AI and optical computing, OpenLight's platform offers a new degree of laser integration and scalability. Qualification and reliability evaluation of Tower's PH18DA production process have shown that the technology is reliable.

Asia-Pacific is the dominating region in the market due to the Growing government initiatives for silicon photonics helping to boost regional market growth over the forecast year. For instance, on October 27, 2023, India, launched Photonic Chips Development Effort. CPPICS seeks to achieve self-sufficiency, promote product commercialization through startups and offer crucial training to support the PIC manufacturing ecosystem in India during the next five years. CPPICS is forming alliances, such as cooperation with Bangalore's Si2 Microsystems, to offer cutting-edge System-in-a-Package solutions for silicon photonic processor cores.

Dynamics

Growing Internet Traffic

Due to a rise in internet traffic, data center operators are building more space for their infrastructure to meet the growing need for digital applications such as social networking, cloud computing, streaming video, e-commerce and online services. High-speed optical interconnects, switches and transceivers made possible by silicon photonics technology enable effective data transfer both inside and between data center buildings, meeting the scalability and performance demands of contemporary data centers. Businesses organizations and individuals wishing scalable, on-demand access to computer resources, storage and applications are driving the continued growth in the usage of cloud computing services. Fast and dependable communication between cloud data centers and end-users is made possible by silicon photonics technology, which is essential to the connections between cloud servers, storage arrays and networking equipment.

According to information gathered through live data analysis, over 60% of website traffic comes from mobile devices. 92.3% of internet users receive their internet via a mobile device. There are currently 4.32 billion mobile internet users globally. The proportion of internet traffic via mobile devices is greatest in Africa which accounted for around 69.13%. There are around over 1 billion 5G connections globally by 2025. The increase in the adoption of the internet helps to boost the market growth of silicon photonics.

Growing Demand for Silicon Photonics in Data Centre

To handle large data traffic and enable cloud computing, big data analytics, artificial intelligence (AI) and other data-intensive applications, data centers require high-speed and high-bandwidth communication systems. Ultra-fast data transfer across optical interconnects can be made possible by silicon photonics technology, offering the speed and capacity required for contemporary data center operations. Optical transceivers, detectors, multiplexers and other components are available from Silicon Photonics as effective optical connection solutions for data centers.

The energy-efficient operation of silicon photonics technology is well recognized and it is essential for data centers that want to lower their power consumption, cooling costs and impact on the environment. Silicon Photonics-based optical interconnects consume less energy than conventional copper-based interconnects, which helps data centers operate more environmentally friendly and with reduced energy consumption. Data centers require scalable and dense connectivity solutions to accommodate increasing data volumes, virtualization and server consolidation. Silicon Photonics enables compact and scalable optical modules, enabling higher port densities, improved space utilization and simplified cabling infrastructure in data center environments.

High Initial Investment

One of the biggest obstacles to entry for new players in the Silicon Photonics market is the high entrance cost, especially for startups and medium-sized companies. The companies have trouble obtaining the funding needed for R&D, production facilities, tools and staff. As a result, it will be more difficult for them to compete with industry leaders and create novel products. The market of silicon photonics expands more slowly overall due to the expensive initial spending.

As there are financial risks associated with investing in new projects or increasing output, companies are hesitant about doing so. The conservative attitude impedes the adoption of Silicon Photonics technology across a range of sectors and applications, as well as slows down market growth rates. Companies' capacity to spend on R&D and innovation could be limited by the large initial investment's financial cost. The constraint slows the rate of technical development in Silicon Photonics and postpones the release of new products, functionalities and features that have the potential to expand the market and satisfy changing consumer needs.

Segment Analysis

The global silicon photonics market is segmented based on product, component, waveguide, application and region.

Growing Adoption of Silicon Photonics in Telecommunication Application

Based on the Application, the Silicon photonics market is segmented into Data Centers and High-performance computing, Telecommunication, Military, Defense & Aerospace, Medical and Life Science and Others.

Telecommunication networks need to have the capacity able to transmit data at high speeds to fulfill the growing need for data-intensive services like cloud computing, video streaming, online gaming and virtual meetings. Silicon photonics technology is excellent for telecommunication infrastructure because it offers optical interconnects, transceivers and other components that enable high-speed data transfer over great distances with minimal latency.

The adoption of 5G networks helps to boost the demand for silicon photonics technology in the telecommunications industry. As a way to enable sophisticated services like the Internet of Things, autonomous vehicles, augmented reality and 5G technology requires a highly rapid, low-latency communication infrastructure. The front-haul or back-haul and optical interconnects needed for 5G infrastructure are all made possible by Silicon Photonics. To manage enormous data traffic and cloud services, phone companies and data center operators are expanding the capacity and connectivity of their networks. Silicon photonics technology enables high-capacity data center interconnects (DCIs) with lower electrical consumption, a smaller footprint and greater bandwidth, increasing the efficiency and performance of data center networks.

Geographical Penetration

Asia-Pacific is Dominating the Silicon Photonics Market

The adoption of digital technology is accelerating across a range of industries in technologies. For these digital ecosystems, silicon photonics is needed to provide relationships, optical networking and high-speed data transmission. The demand for Silicon Photonics solutions is being driven by the implementation of 5G networks in Asia-Pacific countries. Silicon Photonics offers the optical interconnects and components needed for 5G base stations and data center interconnects. 5G technology needs high-speed, low-latency communication systems. Silicon Photonics has grown in the area due to its transition to 5G.

The growth and construction of data centers are growing in the Asia-Pacific to accommodate the region's expanding demands for online applications and digital services. Silicon photonics is the foundation for both data center interconnects and high-capacity connections within data centers. Silicon Photonics is being embraced by the data center sector due to the need for reasonable, high-bandwidth optical solutions.

Competitive Landscape.

The major global players in the market include AIO Core Co. Ltd., FormFactor, Polariton Technologies AG, SCINTIL Photonics, STMicroelectronics, FUJITSU, EFFECT PHOTONICS, RONOVUS, NKT Photonics A/S and Intel Corporation.

COVID-19 Impact Analysis

Global supply chains for semiconductor raw materials, parts and machinery required in Silicon Photonics manufacture, have been knocked off balance by the epidemic. Vendors of silicon photonics have longer lead times, shortages of supplies and manufacturing delays as a result of factors including shipping constraints, facility closures and logistical challenges. Lockdowns, social distancing rules and staff interruptions presented operating issues for several Silicon Photonics producers. Production facilities' total production efficiency and output levels were impacted by the implementation of security measures, capacity decreases and manufacturing process adjustments.

The pandemic changed consumer demand for silicon photonics products in a variety of business sectors. Some industries, including consumer electronics and aerospace, came across lower demand and postponed projects, while industries like data centers, telecommunications and healthcare experienced a surge in demand for digital infrastructure, remote services and high-speed connections. The growing demand for Silicon Photonics solutions that offer cloud computing, virtual meetings, high-speed data transfer and telecommunication services has been driven by the pandemic-related trend towards distant work and a higher reliance on technological advances.

Russia-Ukraine War Impact Analysis

The conflict between Ukraine and Russia damages the supply chains for the components and semiconductor materials required to manufacture silicon photonics. Major key players in silicon photonics experience shortages and higher prices as a result of disruptions in these supply chains. The dispute leads to geopolitical tensions and uncertainty that affect global trade, investment and stability in the markets. Organizations in the silicon photonics sector encounter difficulties with trade restrictions, tariffs, export-import laws and political unrest that have an impact on their business operations, alliances and plans for growing their customer base.

The demand for Silicon Photonics products is impacted by geopolitical conditions, especially in areas where war or instability is immediately experienced. The demand from sectors including consumer electronics, data centers, healthcare and telecommunications may fluctuate due to economic uncertainty and disruptions, which would affect Silicon Photonics suppliers' sales and revenue growth.

By Product

• Transceivers
• Variable Optical Attenuators
• Switches
• Cables
• Sensors
• Others

By Component

• Lasers
• Modulators
• Photo Detectors

By Waveguide

• 400-1,500 NM
• 1,310-1,550 NM
• 900-7000 NM

By Application

• Data Centers and High-performance computing
• Telecommunication
• Military
• Defense & Aerospace
• Medical and Life Science
• Others

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• On October 21, 2023, IIT Madras launched the Centre of Excellence for Silicon Photonics in collaboration with MeitY. The objective of the Silicon Photonics Centre of Excellence, Centre for Programmable Photonic Integrated Circuits and Systems (Silicon Photonics CoE-CPPICS) is to drive product commercialization through startups while achieving self-sufficiency within the next five years.
• On October 02, 2023, DustPhotonics, announced Industry-First Merchant 800G Silicon Photonics Chip for Hyperscale Data Centers and AI Applications. The 800G PIC is a single-chip solution that can be used for both DR8 and DR8+ applications. It offers an aggregate bandwidth of 800Gb/s over 8 separate optical channels that are modulated at 100Gb/s.
• On October 13, 2023, Enosemi, launched a committed commercial license to key silicon photonics design IP created by Luminous Computing. An experienced executive team with exceptional knowledge in silicon photonics, analog mixed signal, lasers, control, packaging and system hardware oversees Enosemi.

Why Purchase the Report?

• To visualize the global silicon photonics market segmentation based on product, component, waveguide, application and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development.
• Excel data sheet with numerous data points of silicon photonics market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global silicon photonics market report would provide approximately 70 tables, 68 figures and 206 Pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies