Silicon Photonics Market Size & Share, by Component (Optical Waveguides, Modulators, Photodetectors); Product (Transceivers, Cables, Switches, Sensors, Optical Attenuators); Application (IT & Telecommunications, Consumer Electronics, Healthcare, Life Sciences, Commercial, Defense, Security) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2023-2035

  • Report ID: 4850
  • Published Date: Apr 27, 2023
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2023-2035

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.


Silicon Photonics Market
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Silicon Photonics Market: Key Insights

Base Year

2022

Forecast Year

2023-2035

CAGR

29.80%

Base Year Market Size (2022)

USD 2 Billion

Forecast Year Market Size (2035)

USD 55 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Silicon Photonics Sector: Growth Drivers and Challenges

Market-Growth-Drivers

Growth Drivers

  • Rapidly Growing Industry 4.0 - In the period 2011-2021, start-ups involved in Industry 4.0 received an increase of +335% in funding annually. In 2021, USD 2 billion was invested in upcoming companies developing Industry 4.0 technology. As of 2021, 130 acquisitions related to Industry 4.0 were made annually. The emergence of Industry 4.0 technologies, such as artificial intelligence, the Internet of Things, and 5G, are driving the need for faster, more reliable data transmission. Silicon photonics addresses these needs by providing a more efficient data transmission method using light instead of electrical signals, making it the ideal solution for the Industry 4.0 era.
  • Increasing Adoption of Internet Of Things (IoT) Devices Across Various Industries- According to the current estimates, there are currently 7 billion IoT devices in operation, and with the rapid introduction of 5G and other technologies, this number is expected to grow by over three times, reaching 25.44 billion total devices by 2030. IoT devices generate and transmit a large amount of data, which requires high-speed communication networks and bandwidth. Silicon photonics is a more efficient way to transfer this data than traditional copper-based communication networks.
  • Rising Demand from Telecommunication Sector- The use of silicon photonics is increasing with the rapid growth of telecom services. India has a telecommunications density of 85%, total broadband subscriptions reached 787 million in April 2022, and there were 1.13 billion subscribers in April 2022. Silicon photonics combines the functionality of electronics and optics on a single chip, enabling the transmission of data at faster speeds over longer distances with less power. This makes it an ideal technology for telecom services, which require high-speed transmission and reliable performance.
  • Increasing Use of Consumer Electronic Products Such as Laptops And Smartphones - Globally, five billion people are connected to the internet every day, and 66% of those people use a laptop to access the internet. Over 341,000 PCs were shipped worldwide in 2021, representing a 14.6% annual growth rate. Also, there are 6.4 billion smartphone subscriptions worldwide.
  • Emerging New Generation of Devices Powered by Artificial Intelligence (AI) - Statistics show that 96% of mobile users use AI-powered voice assistants. In the past year, over 3 billion devices have been equipped with voice assistants powered by artificial intelligence. AI-powered devices are expected to revolutionize the way data is processed and transmitted. This has resulted in increased demand for silicon photonics, as it is more efficient and cost-effective for data processing and transmission than traditional methods.

Challenges

  • Difficulties in integrating photonics with the existing electrical components - Photonics and electrical components operate on different principles, so integrating them can be challenging. For instance, photonics use light to carry signals, while electrical components use electrical signals. This means that they need to be carefully designed to be compatible with each other, which can be difficult and costly.
  • High cost associated with the development
  • Manufacturing of silicon photonics-based products


Silicon Photonics Segmentation

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:

     By Component

  • Optical Waveguides
  • Modulators
  • Photodetectors
  • Laser

     By Product

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

     By Application

  • IT & Telecommunications
  • Consumer Electronics
  • Healthcare & Life Sciences
  • Commercial
  • Defense & Security
  • Others

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Global Silicon Photonics Industry - Regional Synopsis

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.

Research Nester
Silicon Photonics Market Size
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Companies Dominating the Silicon Photonics Landscape

top-features-companies
    • MACOM
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Intel Corporation
    • Cisco Systems, Inc.
    • Juniper Networks, Inc
    • International Business Machines Corporation
    • Sicoya GMBH
    • GlobalFoundries
    • Finisar Corporation
    • Mellanox Technologies
    • STMicroelectronics N.V.

In-the-news

In The News

  • March 11, 2020: MACOM introduced the availability of 25G Avalanche Photodiode optical components that are designed for 5G wireless applications and datacenter applications. They are designed to help reduce the cost of deployment of next-generation networks and to offer improved performance for a variety of 5G wireless and datacenter applications.
     
  • March 05, 2020: It has been announced that Intel Corporation has successfully integrated a Tbs (Terabytes per second) silicon photonic engine with a 12.8 Tbs programmable ethernet switch in the form of a Tbs (Terabytes per second) silicon photonic engine. This integration has enabled Intel to deliver a data transfer rate that is up to twenty times faster than the current rates.

Author Credits:  Abhishek Verma, Hetal Singh


  • Report ID: 4850
  • Published Date: Apr 27, 2023
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

Increasing demand for high-speed data transmission at lower cost and the growing demand for data centers are the major factors driving the market growth.

The market size of silicon photonics is anticipated to attain a CAGR of 29.80% over the forecast period, i.e., 2023-2035.

High cost associated with the development and manufacturing of silicon photonics-based products are estimated to be the growth hindering factors for the market expansion.

The market in the Asia Pacific region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.

The major players in the market are MACOM, Intel Corporation, Cisco Systems, Inc., Juniper Networks, Inc, International Business Machines Corporation, Sicoya GMBH, GlobalFoundries, Finisar Corporation, Mellanox Technologies, STMicroelectronics N.V., others.

The company profiles are selected based on the revenues generated from the product segment, the geographical presence of the company which determines the revenue-generating capacity, and the new products being launched into the market by the company.

The market is segmented by component, product, application and by region.

The transceivers segment is anticipated to garner the largest market size by the end of 2035 and display significant growth opportunities.
Silicon Photonics Market Report Scope
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