Global Photonic Integrated Circuits Market – Growth, Trends, Impact of COVID-19 and Forecast (2022)


The global Photonic Integrated Circuits market (hereafter referred to as the market under study) was valued at USD 7,998. 63 million in 2021, and it is expected to be worth $26,421. 83 million by 2027, registering a CAGR of 20.

New York, June 10, 2022 (GLOBE NEWSWIRE) — announces the publication of the report “Global Photonic Integrated Circuits Market – Growth, Trends, COVID-19 Impact and Forecast (2022 – 2027)” – https://
47% during the period 2022-2027 (hereafter referred to as the forecast period).

When integrated on a single chip, multiple photonic components, such as waveguides, lasers, modulators, and detectors, are called photonic ICs. Compared to traditional ICs, photonic ICs are extremely fast, accept higher bandwidth, and are very power efficient. These features solved some of the critical drawbacks of traditional ICs.
In the case of photonic integrated circuits, it is estimated that the power consumed in these critical applications could be reduced by at least 50%. The frequencies that could be covered by photons are approximately 1,000 to 10,000 times greater than the spectrum to be covered by microelectronics. This means that by using photonic ICs, end users can achieve much higher frequencies which are much more energy efficient compared to traditional ICs.
This low-cost photonic hardware fabricated in a hybrid or monolithic process is meeting high demand from end-user applications, such as data centers whose capacity is increasing every year due to data-driven ecosystems.
Additionally, amid highly integrated photonics technology, several market players are working on active PIC-led developments to help address the growth in data/network traffic, especially in data centers exacerbated by responses to the COVID-19 pandemic.
Moreover, although hybrid photonic ICs are highly efficient and have several advantages over their predecessors/traditional ICs, they are experiencing a very low level of market penetration compared to traditional ICs.
Additionally, with growing threats and recent scenarios like COVID-19, the surveillance market is witnessing a boom. Many public places around the world are deploying optical and photonic sensors that enable high-sensitivity night vision sensors, cameras and systems, in combination with solid-state photocathode technology with silicon-based digital video technology .

Main market trends

Growing applications in telecommunications and data centers

Hybrid PICs find excellent applications in the telecommunications sector and data centers. The need for a high rate of data transfer, which cannot be supported by traditional ICs, is the major factor driving the increased adoption of hybrid PIC in the telecommunications and data center markets.
Further acceleration was attributed to the development of broadband networks and 5G. PICs are a well-known technology in the telecommunications industry through the development and large-scale deployment of transceivers and passive components.
The appearance of 5G has emphasized wireless and radio technology. However, photonics and fiber optics have played a vital role in transporting signals to and from the new generation of base stations.
Additionally, there is a high degree of innovation that helps several manufacturers develop low-cost hybrid PIC hardware to meet their needs. On top of that, the growing number of cloud applications is rapidly increasing the traffic that needs to be handled by data centers (DCs). According to the Uptime Institute’s data center industry survey, the majority of operators have a hybrid strategy on DC operation. With IT workloads spread across a range of departments and data centers, Uptime shared that around a third of all workloads need to be shifted to cloud, colocation, hosting and software providers. as a service (SaaS) in 2021.
According to Cisco’s GCI 2015-2020, by 2022, 92% of workloads could be on the cloud in data centers, indicating a critical need for advanced switching and data transfer hardware that could be satisfied by hybrid PICs.
Additionally, the booming demand for higher bandwidth and strong adoption of cloud services by SMBs, usually heightened amid COVID-19 situations, have boosted data centers. A trend of increasing the data rate of the switch and increasing the data rate of the transceiver is observed, leading to the adoption of PIC.

North America will hold a major market share

In North America, demand for photonic integrated circuit (PIC)-based products is driven by data centers and fiber-optic communication WAN applications. The growing need for high-speed data transmission has increased data traffic in cloud computing, and the rapid deployment of IoT has created a potentially booming photonic integrated circuit industry in the region. According to Cisco Cloud Index, North America is expected to generate the most cloud traffic (7.7 ZB per year) by the end of 2021. These trends are expected to increase market adoption.
According to Cloudscene, the United States has the largest number of data centers in the world, with nearly 2,600 data centers in the country. That’s almost 33% of the whole world.
Service providers are facing growing demand for bandwidth, much of which is driven by mobile, video and cloud-based services. Enterprises are expected to base their optical networks on the PIC, which is expected to contribute positively to the growth of the market. In the region, multinational corporations, such as IBM Corporation, Intel Corporation, and Cisco, are working hand-in-hand with academic, business, and government partners to develop PIC-based solutions to address communications challenges.
For smaller companies, public-private partnerships have forged national research consortia, such as the American Institute for Manufacturing Integrated Photonics (AIM Photonics, Rochester, NY) in the United States, the Canadian Photonic Industry Consortium, Florida Photonics Cluster and the Ontario Photonics Industry Network.
As data rates and bandwidth requirements increased, companies began to push for a transition to PICs. PICs operating with light and photons instead of electricity and electrons could offer higher bandwidth and more efficiency, making them well-placed for future applications. CIPs have found new ways to improve technology, such as quantum computing.
In November 2021, researchers at Purdue introduced a new optical isolation technique, which removes the need for magnets. Purdue’s magnetic-free optical isolator was aimed at advancing photonic integrated circuits. The future of data and communications is expected to demand higher bandwidths and greater efficiency, which will drive the use of PICs. With breakthroughs like this from Purdue researchers, widespread adoption of PIC technology is expected in the region.

Competitive landscape

The global photonics IC market is moderately competitive and consists of several major players such as Neophotonics Corporation, Poet Technologies, Cisco Systems Inc., Infinera Corporation, etc. In terms of market share, few major players currently dominate the market. However, with innovations and advances in technology, many companies are increasing their market presence by securing new contracts and tapping into new markets. Some of the recent developments in the market are:

March 2022 – EFFECT Photonics and Jabil Photonics announced that they will collaborate on the development of a new generation of coherent optical modules. The modules offer a one-stop solution for network operators and hyperscalers looking to benefit from QSFP-high DD performance, small footprint, low power consumption and low cost, field replaceability and vendor interoperability for cloud Data Center Interconnects (DCIs). Next-generation coherent optical modules handle increased demands for data flow, service continuity, security concerns, global expansion, and sustainability.
March 2022 – ColorChip Group and Skorpios Technologies, Inc., a vertically integrated pioneer in heterogeneously integrated silicon photonics, have established a strategic partnership to use Skorpios’ disruptive optical technology to produce optical modules at unprecedented prices. ColorChip will sell its own brand of modules as well as private label modules for Skorpios to sell at different speeds and performance levels. Future products, such as co-packaged optical modules and coherent modules, will be developed collaboratively.
September 2021 – NeoPhotonics announced the release of the high output power version of its CFP2-DCO 400G multi-rate coherent pluggable transceiver with 0 dBm output power and designed to operate in metropolitan, regional and long distance. It is based on NeoPhotonics’ vertically integrated indium phosphide technology platform, including ultra-pure nano tunable laser and Class 40 Coherent Driver Modulator (CDM) and Coherent Receiver (ICR).

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The Market Estimate (ME) sheet in Excel format
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