Photonic Integrated Circuit Market Size to Expand from USD 15452.26 Million in 2024 to USD 95285.06 Million by 2033 | StraitsResearch

Photonic Integrated Circuit Market Outlook:

The ICs use photons for carrying data, unlike electronic ICs that utilize electrons for data transfer. As optical rays can transmit more data and enable quicker data transfer rates than copper-based communications, they are preferred to electrical semiconductor techniques. Due to the usage of optical technology, the system is discrete. These chips can also be added to fundamental electronic circuits, broadening their application possibilities. The high-speed data transfer made possible by these circuits is one of the key drivers of the market for photonic integrated circuits. It makes them suitable for various aerospace, industrial, communications, utilities, and energy applications.

According to Straits Research, the global photonic integrated circuit market size was valued at USD 15452.26 million in 2024 and is projected to reach USD 95285.06 million by 2033, growing at a CAGR of 22.4% during the forecast period (2025-2033).

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Market Dynamics

Investments and Research to Miniaturize the PICs Drive the Global Market

According to automotive, aerospace, and telecom companies collaborating to produce spectrometers for the LiDAR industry, there is a great need for small, affordable, and reliable Photonics Integrated Circuits. Miniaturization is, therefore, in high commercial demand. The allied device had a silicon dioxide layer and a thin lithium niobate (LN) coating, which resulted in a small, energy-efficient modulator that could operate at high speeds. The modulator's electro-optical modal volume was 0.58 m3, and its tuning efficiency was 1.98 GHz/V with a 17.5 GHz modulation bandwidth.

As integrated optical signal processors work with conventional electrical signal processors to create cutting-edge signal-processing hardware platforms, a significant improvement in processing bandwidth, latency, and power economy is desired. Similarly, according to Mitsubishi Electric Research Laboratories, the silicon photonics platform has been considering new building blocks to increase processor capabilities and offer helpful features in line with the increasing shrinking of devices. Additionally, it is preferred to make it possible for complex circuits to be ultra-densely integrated into processor chips.

Photonic Integrated Circuit Market Segmentation

By Type of Component
Laser (Optical Laser)
Modulators
Detectors
Transceivers
Multiplexer/Demultiplexer
Optical Amplifiers

By Type of Raw Material
III-V Material
Lithium Niobate
Silica-on-Silicon
Other Raw Materials

By the Integration Process
Hybrid
Monolithic

By Application
Telecommunications
Biomedical
Data Centers
Other Applications

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Growing Applications in Telecommunications and Data Centers Create Tremendous Opportunities

Hybrid PICs provide many advantages for the telecoms and data center industries. The demand for a high data transfer rate, which conventional ICs cannot support, is the primary driver of the expanding use of hybrid PIC in the telecom and data center markets. The development of 5G and high-speed networks has been cited for additional acceleration. PICs are a well-known technology in the telecom sector thanks to the development and extensive use of transceivers and passive components. The introduction of 5G has increased the prominence of wireless and radio technology.

However, photonics and fiber optics have greatly aided the current base station generation's ability to receive and transmit signals. Other manufacturers are benefiting from high levels of innovation by using it to make low-cost hybrid PIC hardware to meet their demands. Additionally, as more cloud apps are developed, the amount of traffic data centers must manage is rapidly growing (DC).

Key Highlights

Based on the type of component, the global photonic integrated circuit market is bifurcated into lasers (optical lasers), modulators, detectors, transceivers, multiplexers/demultiplexers, and optical amplifiers. The laser (optical laser) segment is the highest contributor to the market and is estimated to grow at a CAGR of 22.3% during the forecast period.

Based on the type of raw material, the global photonic integrated circuit market is bifurcated into III-V material, lithium niobate, silica-on-silicon, and other raw materials. The III-V material segment is the highest contributor to the market and is estimated to grow at a CAGR of 21.8% during the forecast period.

Based on the integration process, the global photonic integrated circuit market is bifurcated into hybrid and monolithic. The monolithic segment is the highest contributor to the market and is estimated to grow at a CAGR of 21.8% during the forecast period.

Based on application, the global photonic integrated circuit market is bifurcated into telecommunications, biomedical, data centers, and other applications. The data centers segment is the highest contributor to the market and is estimated to grow at a CAGR of 21.9% during the forecast period.

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 25.2% during the forecast period.

Competitive Players

Neophotonics corporation
Poet Technologies
II-VI Incorporated
Infinera Corporation
Intel Corporation
Cisco Systems Inc.
Source Photonics Inc.
Lumentum Holdings
Caliopa (Huawei Technologies Co. Ltd)
Effect Photonics
Colorchip Ltd.

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Regional Analysis

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 25.2% during the forecast period. Asia-Pacific, especially China, has become an important market due to the expanding electronics and telecom industries and the quick movement of numerous semiconductor production bases to Southeast Asian nations. Over the past ten years, China's PICs technology has improved quickly. There have been released across the country more than nine large PIC projects. Various material technologies and platforms have been developed for applications focusing on broadband communication, including optical and wireless networks, optical interconnects, and coherent optical communication.

Europe is expected to grow at a CAGR of 22.6% during the forecast period. The European Commission, the EU's executive arm, has invested in photonic integrated circuit (IC) technology over several years. This entails cutting-edge expenditures on fundamental research, creating tools and software that demonstrate a concept, and, more recently, pilot line manufacture. Due to this, the regions today have a growing PIC ecosystem that has the potential to unleash the power of PIC technologies and help the locals on a variety of social and economic fronts. Several additional efforts have also been launched to enhance PIC development throughout Europe. For instance, InPulse is a pilot program that would provide access to the most recent production technology for PICs based on indium phosphide to businesses with brilliant ideas but no PIC manufacturing facilities.

Recent Developments

February 2022- POET Technologies Inc., the designer and developer of the POET Optical InterposerTM and Photonic Integrated Circuits (PICs) for the data center and telecommunication markets, announced a collaboration with Liobate Technologies to incorporate advanced Thin-Film Lithium Niobate ("TFLN") modulators onto POET's Optical Engines, supporting power-efficient ultra-high-bandwidth electro-optic conversion for data center and telecom applications.

November 2022- II-VI Incorporated made 11 acquisitions and one investment. The company spent over USD 3.66B on the acquisitions. II-VI Incorporated invested in multiple sectors such as Telecom Infrastructure Tech, Analog and Mixed Signal ICs, Photonics, and more.

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