Silicon Photonics Global Market Report 2024

Silicon photonics is an innovative technology that involves the transfer of data among computer chips using optical rays. Optical rays have the capability to carry large amounts of data in a shorter time compared to electrical conductors. Semiconductor-grade silicon is employed in silicon photonics to integrate both active and passive photonic circuits with electronic components. This technology focuses on the study and application of photonic systems for generating, processing, manipulating, and facilitating faster data transfer within and between microchips.

The primary product types in silicon photonics include transceivers, variable optical attenuators, switches, cables, and sensors. Transceivers play a crucial role in silicon photonics by providing high-bandwidth, software-configurable access to computing and storage. This eliminates networking bottlenecks observed in traditional electronics, preventing stranded computation capacity and allowing for significantly faster data transport over larger distances. Key components of silicon photonics include a laser, modulator, photodetector, filter, and waveguide. The diverse applications of silicon photonics span data centers and high-performance computing, telecommunication, military, defense, and aerospace, medical and life sciences, and other sectors.

The Silicon Photonics market research report is one of a series of new reports that provides Silicon Photonics market statistics, including Silicon Photonics industry global market size, regional shares, competitors with a Silicon Photonics market share, detailed Silicon Photonics market segments, market trends and opportunities, and any further data you may need to thrive in the Silicon Photonics industry. This Silicon Photonics market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the industry.

The silicon photonics market size has grown exponentially in recent years. It will grow from $1.9 billion in 2023 to $2.36 billion in 2024 at a compound annual growth rate (CAGR) of 24.3%. The growth observed in the historical period can be attributed to several factors, including the expansion of data centers and optical communication infrastructure, increased demand for high-speed data transmission, technological advancements in silicon photonics, the pursuit of energy-efficient and cost-effective data solutions, growth in the telecom and cloud computing industry, and the expanding applications of artificial intelligence and machine learning.

The silicon photonics market size is expected to see exponential growth in the next few years. It will grow to $5.83 billion in 2028 at a compound annual growth rate (CAGR) of 25.3%. The anticipated growth in the forecast period can be attributed to various factors, including the deployment of 5G infrastructure and optical networking, the expansion of hyperscale data centers and the rise of edge computing, the application of silicon photonics for AI accelerators, the use of silicon photonics in automotive LiDAR (Light Detection and Ranging) and ADAS (Advanced Driver Assistance Systems) applications, the integration of silicon photonics in medical imaging and biophotonics, and the advancements in quantum communication and computing. Key trends expected in the forecast period include the integration of silicon photonics with electronics, the development of co-packaged optics and optical ASICs (Application-Specific Integrated Circuits), the emergence of photonic AI and neuromorphic computing, the evolution of quantum photonic processors, the utilization of silicon photonics for LiDAR in autonomous vehicles, and the innovation in flexible and reconfigurable photonic circuits.

The surge in demand for high-speed broadband services is poised to drive the growth of the silicon photonics market. These services are integral to various applications, including mobiles, laptops, smart home devices, online education, virtual private LAN services, and interactive gaming. Silicon photonics technology, utilizing a sub-micrometer SOI (silicon on insulator) platform, plays a crucial role in fiber optic interconnects, enhancing data transmission within and between microchips. For instance, the Organization for Economic Co-operation and Development reported that fiber, a prevalent connection technology, accounted for 38% of all fixed broadband subscriptions by the end of 2022. This underscores the pivotal role of silicon photonics in meeting the growing demand for high-speed broadband services.

The escalating number of data centers is anticipated to be a significant driver for the silicon photonics market. Data centers, housing computer systems and networking equipment, are vital for managing extensive digital information. Silicon photonics enhances data transmission within data centers by integrating optical components onto silicon chips, facilitating faster and energy-efficient communication between servers and reducing latency. The United States International Trade Commission highlighted that as of January 2021, there were around 8,000 data centers worldwide, with over 2,600 in the United States. This trend is expected to propel the silicon photonics market forward.

Technological advancements are a noteworthy trend in the silicon photonics market, with companies introducing products featuring advanced technologies such as high power and optical filtering tolerance. For instance, NeoPhotonics Corp launched a CFP2-DCO module in September 2021, boasting 0dBm output power for ROADM-based metro, regional, and long-haul networks. This technology enables high-speed data transmission at 400 Gbps over a range of 1,500 km, demonstrating the market's focus on innovation and performance improvement.

Major companies in the silicon photonics market are concentrating on developing silicon photonics platforms with integrated lasers to gain a competitive advantage. These platforms, equipped with integrated lasers, offer faster data transmission and energy-efficient communication in compact, integrated systems. OpenLight Photonics Inc. introduced the world's first open silicon photonics platform with integrated lasers in June 2022, aiming to accelerate the development of high-performance photonic integrated circuits (PICs). This innovation streamlines manufacturing processes by eliminating the need for independently sourced lasers.

In November 2021, Lumentum acquired NeoPhotonics for $918 million. This strategic acquisition positions Lumentum to expand its presence in the optical components market, particularly in cloud and telecom network infrastructure. NeoPhotonics, a designer and manufacturer of silicon photonics and hybrid photonic integrated circuit (PIC)-based lasers, brings valuable expertise to further strengthen Lumentum's market position.

Major companies operating in the silicon photonics market include Acacia Communications Inc., Broadcom Inc., Cisco Systems Inc., MACOM Technology Solutions Holdings Inc., Finisar Corporation, Globalfoundries Inc., International Business Machines Corporation (IBM), II-VI Incorporated, Inphi Corporation, Intel Corporation, Juniper Networks Inc., Mellanox Technologies Ltd., NeoPhotonics Corporation, Ranovus Inc., Rockley Photonics Ltd., Sicoya GmbH, Luxtera Inc., Reflex Photonics Inc., Lumentum Operations LLC, Hamamatsu Photonics K.K., Fujitsu Limited, AIO Core Co. Ltd., NKT Photonics A/S, Infinera Corporation, IPG Photonics Corporation, STMicroelectronics N.V., Ciena Corporation, Kotura Inc., Oclaro Inc., Skorpios Technologies Inc., Silicon Line GmbH, Lightwave Logic Inc., Kaiam Corporation, O-Net Technologies (Group) Limited, POET Technologies Inc.

Asia-Pacific was the largest region in the silicon photonics market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the silicon photonics market analysis report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

The countries covered in the Silicon Photonics market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

The silicon photonics market consists of sales of switches, transceivers, cables, variable optical attenuators, and other silicon photonics. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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