Silicon Photonics Market size is expected to cross USD 55 Billion by the end of 2035, growing at a CAGR of 29.80% during the forecast period, i.e., 2023-2035. In the year 2022, the industry size of silicon photonics was over USD 2 Billion. The growth of the market can be attributed to the surge in demand for cloud-based services and 5G technology, as well as technological advancements in optoelectronics. Cloud services have greatly increased the demand for data centers in the past few years. A survey of cloud leaders shows that 40% of companies are planning to use cloud-based services and products, 34% are planning to migrate legacy enterprise applications to the cloud, and 31% are planning to migrate on-premises workloads to the cloud. Over 50% of enterprises are expected to accelerate their business initiatives by 2027 using industry cloud platforms. The growing adoption of cloud-based services will require faster networking speeds, which will lead to an increased demand for high-speed optical interconnects that use silicon photonics technology. This increased demand will drive the growth of the silicon photonics in the coming years.
In addition to these, factors that are believed to fuel the growth of silicon photonics market include increasing demand for high-speed wireless networks such as 5G and 6G and the rising demand for miniaturized and cost-effective optical communications systems. A total of 230 million subscriptions to 5G are currently available worldwide. The number of 5G connections in 2019 was around 10 million, which is estimated to increase to 1 billion by 2023, and 3 billion by 2025. Silicon photonics technology is a cost-effective and reliable way to transmit large amounts of data quickly over wireless networks. With the increasing demand for faster internet speeds, the demand for silicon photonics technology is also increasing. Additionally, the development of new technologies such as 3D integration and silicon nanophotonics is also providing a boost to the market.
Growth Drivers
Challenges
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Base Year |
2022 |
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Forecast Year |
2023-2035 |
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CAGR |
29.80% |
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Base Year Market Size (2022) |
USD 2 Billion |
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Forecast Year Market Size (2035) |
USD 55 Billion |
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Regional Scope |
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Component (Optical Waveguides, Modulators, Photodetectors)
The silicon photonics market is segmented and analyzed for demand and supply by component into optical waveguides, modulators, photodetectors and laser. Out of these, the laser segment is estimated to gain the largest market share of about ~35% in the year 2035. The growth of the segment can be attributed to the increasing demand for high-speed data communication, rising need for data centers and growing demand for optical interconnects. It is estimated that data transmission networks consumed 260-340 TWh of electricity as of 2021, equivalent to 1.1-1.4% of global electricity consumption. It is expected that 5G will account for 56% of mobile data traffic in 2027, up from 10% in 2021. The laser segment is expected to be the most dynamic segment in the forecast period, as it is crucial for the construction of optical communication systems. Additionally, lasers are a key component in silicon photonics as they convert electrical signals into light signals, and are used in data centers to transfer high speed data owing to the increasing demand for high speed data transfer in consumer electronics and telecommunications.
Product (Transceivers, Cables, Switches, Sensors, Optical Attenuators)
Silicon photonics market is segmented and analyzed for demand and supply by product into transceivers, cables, switches, sensors, optical attenuators and others. Out of these, the transceivers segment is estimated to gain the significant market share of about ~29% in the year 2035. The growth of the segment can be attributed to the increased demand for high-speed data transmission applications and the need for low-power consumption in the market. Additionally, the rising demand for data centers and the increased focus on cloud computing are driving the demand for transceivers in the market. Transceivers are used to send and receive data in data centers and cloud computing platforms. They are critical components for these systems and are expected to see strong growth in the coming years.
Our in-depth analysis of the global silicon photonics market includes the following segments:
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By Component |
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By Product |
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By Application |
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APAC Market Statistics
The share of silicon photonics market in Asia Pacific, amongst the market in all the other regions, is projected to be the largest with a share of about ~35% by the end of 2035. The growth of the market can be attributed majorly to the growing number of data centers and the rising demand for high-speed internet connections in the region. With 450 data centers, China is ranked third in terms of the number of data centers among countries. Approximately 7 million square feet of space is expected to be occupied by Indian data centers as of 2021. As of 2025, India is expected to have 180 data centers and 1300 MW of data center capacity. As data centers become more prevalent, the need for faster and more efficient data transfer also increases. Silicon photonics is an emerging technology that uses light to transfer data at high speeds, making it an attractive solution for data centers. Moreover, the rising demand for bandwidth in the region as a result of rapid growth in the commercial sector is driving the need for faster and more efficient communications, which is giving a further boost to the share of silicon photonics market in the region.
North American Market Forecast
The North America silicon photonics market is estimated to be the second largest, registering a share of about ~24% by the end of 2035. The growth of the market can be attributed majorly to the rapid growth in defense & security sector in the region. The increasing demand for advanced equipment and systems in the defense & security sector is driving the development of silicon photonics technology. This technology offers advantages such as high bandwidth, light weight, low power consumption, and scalability. Additionally, the increasing need for faster data transfer rates has led to the development of advanced technologies such as 5G and 6G, which have further propelled the growth of the North America silicon photonics market.
Europe Market Forecast
Further, the silicon photonics market in the Europe, amongst the market in all the other regions, is projected to hold a majority of the share by the end of 2035. The growth of the market can be attributed majorly to the increasing demand from the healthcare and life science industry. Silicon nanophotonics allows for the rapid detection of disease markers. This technology can measure tiny fluctuations in light intensity, which makes it ideal for the precise detection of disease markers. This technology also makes it possible to create portable testing kits that can be used in both home and laboratory settings. Furthermore, the technology can also be applied to medical sensing and imaging applications, which makes it in high demand in the healthcare and life science fields.
Author Credits: Abhishek Verma, Hetal Singh
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