Global Silicon Photonics Market Set for Explosive Growth to USD 11.4 Billion by 2031, Led by 27.9% CAGR Amid AI Data Center Boom | Key Players - Intel, Cisco, Lumentum

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.The silicon photonics market's rapid growth is fueled by rising demand for high-speed optical communication, AI and data center applications, and strategic collaborations like PhotonDelta and Silicon Catalyst advancing photonics startups, plus major industry moves to integrate co-packaged optics and expand silicon photonics R&D and production.

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Key Industry Developments

United States: Key Industry Developments

✅ April 2025: TSMC introduced its new A14 logic process at the North America Technology Symposium, advancing silicon photonics integration for AI performance and energy efficiency in high-performance computing applications.

✅ March 2025: NVIDIA announced Spectrum-X Photonics with co-packaged optics networking switches, enabling scaling of AI factories to millions of GPUs using silicon photonics for high-speed, low-power connectivity.

✅ February 2025: STMicroelectronics launched a new data-center photonics chip in partnership with AWS, enhancing photonic integration to support dense server deployments and reduce power usage in cloud infrastructures.

Japan: Key Industry Developments

✅ December 2025: Advantest announced showcase of advanced test solutions for silicon photonics at SEMICON Japan 2025, highlighting technologies for AI, HPC, and high-performance computing amid growing data transmission demands.

✅ June 2025: Saitama Prefecture selected Sayama Mold Manufacturing for FY2025 subsidy to develop ultra-precision mold technology for mass production of optical fiber components used in data centers and silicon photonics applications.

✅ Market Growth 2025: Japan's silicon photonics market reached USD 130.7 million, driven by high-speed data needs in 5G, AI, IoT, and energy-efficient optical communications for cloud and data centers.

Key M&A Deals

✅ GlobalFoundries acquires Advanced Micro Foundry (AMF) - GlobalFoundries completed the acquisition of Singapore-based Advanced Micro Foundry (AMF), a silicon photonics foundry, strengthening its position in silicon photonics manufacturing for AI data center, communications, and advanced computing applications. Financial terms were not disclosed.

✅ Advanced Micro Devices (AMD) acquires Enosemi - AMD purchased Enosemi, a photonic integrated circuits developer, to enhance its co-packaged optics and silicon photonics capabilities, supporting high-bandwidth, energy-efficient connectivity in AI systems. Deal value was not publicly disclosed.

Key Players:-

AIO Core Co. Ltd. | FormFactor | Polariton Technologies AG | SCINTIL Photonics | STMicroelectronics | FUJITSU | EFFECT PHOTONICS | RONOVUS | NKT Photonics A/S | Intel Corporation

Key Segments

By component, the market includes transceivers, lasers, modulators, photodetectors, multiplexers/de-multiplexers, and optical waveguides. Transceivers account for a major share due to their widespread use in high-speed data transmission within data centers and telecom networks. Increasing demand for energy-efficient, high-bandwidth communication systems is accelerating the integration of advanced photonic components.

By product type, the market is categorized into integrated silicon photonics chips and discrete components. Integrated chips are gaining significant traction as they combine multiple optical functions on a single platform, reducing power consumption, size, and cost. Their adoption is expanding in hyperscale data centers and high-performance computing applications.

By application, silicon photonics is widely used in data centers, telecommunications, healthcare, consumer electronics, and defense. Data centers represent the largest segment due to growing cloud computing, AI workloads, and rising global internet traffic. Telecommunications is also witnessing strong growth driven by 5G infrastructure and fiber-optic network expansion.

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Market Drivers

• Surging Demand for High-Speed Data Transmission: The exponential growth of global data traffic driven by cloud computing, AI, streaming services, and IoT is accelerating the adoption of silicon photonics for ultra-fast optical communication and high-bandwidth interconnects.

• Expansion of Data Centers and Cloud Infrastructure: Rapid expansion of hyperscale data centers and cloud services requires high-bandwidth, energy-efficient interconnect solutions, positioning silicon photonics as a key technology for reducing latency and power consumption in modern data networks.

• Growth of 5G/Next-Gen Telecom Networks: The rollout of 5G and future telecom technologies is increasing the demand for high-speed, low-latency optical components, which silicon photonics can deliver more efficiently than traditional electronic solutions.

• Energy Efficiency and Reduced Power Consumption: Silicon photonic solutions offer lower power consumption compared to copper-based interconnects, addressing sustainability goals of data centers and communication infrastructures and driving broader market adoption.

• Integration with CMOS and Cost-Effective Manufacturing: Compatibility with existing CMOS fabrication processes enables cost-effective mass production of silicon photonic components, further encouraging their deployment across large-scale commercial applications.

• Advancements in R&D and Innovation: Strong investment in research and development is yielding new silicon photonic technologies and expanding applications in telecommunications, sensing, and computing, thereby supporting market growth.

• Diversification into Adjacent Applications: Increasing adoption of silicon photonics in LiDAR, healthcare diagnostics, and integrated sensors is unlocking new industry opportunities beyond traditional data communications.

Regional Insights

North America: 41% (Largest share, owing to strong R&D infrastructure, hyperscale data centers, and advanced semiconductor ecosystems).

Asia Pacific: 30.5% (Fastest growing/second-largest, driven by China, Japan, South Korea telecom and data center build-outs).

Europe: 22% (Steady growth backed by automotive, industrial, and research investments).

Middle East & Africa: 6% (Smaller share but increasing investment in telecom/data infrastructure).

Latin America: 4% (Emerging region with early telecom and cloud data center adoption).

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