by Photonic integrated circuits are extensively used in optical fiber communication networks and optical signal processing which helps in transmitting large volumes of data through optical fibers at faster rates without needing to convert signals between optical and electronic forms. Photonic ICs provide various advantages like compatibility with optical fiber networks, low transmission losses, high bandwidth, and immunity to electromagnetic interference. The growing need for scalable and compact optoelectronic devices with increasing internet traffic and 5G deployments is propelling the demand for photonic ICs in datacenters, high-performance computing systems, and telecommunications.
The global Photonic IC Market is estimated to be valued at US$ 3068.77 Mn in 2023 and is expected to exhibit a CAGR of 33% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
The photonic IC market is witnessing notable growth owing to rising demand for energy efficient optoelectronic devices and increasing internet traffic. Photonics helps overcome bandwidth limitations of copper interconnects by facilitating faster data transfer rates. Furthermore, growing focus on compact integration of optical components for applications like lidar, optical coherence tomography and biophotonics is boosting the market growth. However, high initial costs involved in fabrication of photonic ICs and technicalchallenges in developing hybrid integration approachesis hampering the market expansion. Ongoing research & development by companies as well as academics to reduce costs and improve integration density using foundry business models can help address these challenges thereby accelerating adoption of photonic ICs in the forecast period.
Porter’s Analysis
Threat of new entrants: The threat for new entrants in the photonic IC market is low as it requires large investments in research and development and having established distribution channels.
Bargaining power of buyers: The bargaining power of buyers is high as photonic ICs can be substituted by traditional electronic ICs and the buyers have many established vendors to choose from.
Bargaining power of suppliers: The power of suppliers is moderate as there are many component suppliers but the integration of photonic requires specialized technology know-how which limits options.
Threat of new substitutes: The threat of substitutes is moderate as traditional electronic ICs still dominate certain applications and emerging technologies like digital signal processing provides alternatives.
Competitive rivalry: The competition in the market is high among established manufacturers.
Key Takeaways
The global Photonic IC Market Demand is expected to witness high growth. The global Photonic IC Market is estimated to be valued at US$ 3068.77 Mn in 2023 and is expected to exhibit a CAGR of 33% over the forecast period 2023 to 2030.
The North America region currently dominates the photonic IC market due to rising investments in data centers, high speed networking, and healthcare applications in the region. The photonic IC market in Asia Pacific is expected to grow at the highest CAGR during the forecast period due to increasing adoption of cloud computing and data centers. Many key players are expanding their operations in countries like China, Japan, and India to gain market share in the region.
Key players operating in the photonic IC market focus on new product launches and collaborations with technology providers to enhance their product portfolio. For instance, in 2022 Agilent Technologies partnered with Kotura to integrate its Gallium Nitride-on-Silicon Photonic Integrated Circuits within the Agilent Polarization Controller Platform for advanced micro-optics applications.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
