Silicon Photonics Market Size, Share and Trends

Updated on : October 07, 2024

Silicon Photonics Market Size & Growth

The global silicon photonics market size was valued at USD 1.3 billion in 2022 and is projected to reach USD 5.0 billion by 2028, growing at a CAGR of 28.5% from 2023 to 2028. Factors such as the risk of thermal effect and complexity in the integration of on-chip laser function are restraints for the SiPh market's growth.

Silicon Photonics Market Forecast to 2028

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Silicon Photonics Market Trends:

Driver: Rising demand for CMOS-integrated silicon photonics (SiPh) technology in data centers

There has been a rising demand for CMOS-integrated silicon photonics (SiPh) technology in data centers due to its ability to address the challenges of high-speed data transmission (>100 Gbps) and energy efficiency. Silicon photonics technology combines the power of optical communications with the cost-effectiveness and scalability of CMOS technology, making it an attractive solution for data center operators.

Novel data centers worldwide are witnessing a growth requirement for next-generation data storage systems and high-speed data transfer rates. Datacom protocols are moving to high-speed signaling and surpassing 100 Gbps, giving rise to issues related to the range and signal integrity for both copper and optical cables. Thus, the requirements for low-cost, power-efficient, high-bandwidth interconnection networks pose challenges for data centers. However, the capability of optics to ensure high-bandwidth data transmission promotes the use of photonics to fulfill data center bandwidth requirements. Hence, silicon photonics technology can be integrated with conventional, complementary metal-oxide semiconductor (CMOS) devices to meet the demand for next-generation performance in data centers. Thus, the need for low-cost, high-speed interconnects supporting ever-increasing data rates beyond 100 Gbps is driving the growth of the silicon photonics market share.

Restraint: Risk of thermal effect in SiPh Industry

Thermal effects are a concern in the Silicon Photonics industry, especially as devices become smaller and more complex. The thermal effect arises due to the absorption of light by silicon, which can increase the temperature in the device. This increase in temperature can lead to a decrease in device performance or even device failure. One potential area of concern is the integration of electronic and photonic components on the same chip. The heat generated by the electronic components can impact the performance of the photonic components and vice versa. Additionally, high-powered laser sources can generate significant amounts of heat, which can cause thermal damage to the device.

Silicon photonics (SiPh) is extensively used in telecommunication and data communication servers that consume extremely high power, introducing thermal stress to servers. For instance, elevated temperature may alter the refractive index of optical light, which results in the loss of visual data. Thus, the impact of this restraint is currently moderate, but it will be low in the near future with the introduction of newer innovative packaging technologies. Liquid-crystal cladding can be used to reduce the thermal effect, which has a negative thermo-optic coefficient and low absorption at infrared wavelengths.

Opportunity: Emerging applications of silicon photonics (SiPh)

Datacom and telecom are the major applications of silicon photonics (SiPh); recently, much effort has been made by research institutes and players operating in this field to explore opportunities in other application areas, such as medical and life sciences, and automotive LiDAR. Automotive LiDAR is used in self-driving cars. MIT Photonics Microsystem Group and DARPA are working to integrate mechanical LiDAR systems on a microchip that can be mass-produced in CMOS foundries.

Silicon photonics will revolutionize the medical diagnosis industry. It is because silicon photonics has many potential applications in enabling high-speed kits for home and laboratory settings and point-of-care testing. This is due to the speed, accuracy, versatility, and size with which silicon photonic biosensors can evaluate a variety of analytes. Along with it, most global health data will be derived from the imaging data generated in laboratories, hospitals, and imaging centers. This will require high-speed data transmission channels; silicon photonics technology will fulfill this need.

Challenges: Inefficient electroluminescence of bulk crystalline silicon

An optical network (fiber-optic or on-chip) requires light sources, and a photonic-integrated circuit (PIC) is incomplete without these sources. Bulk crystalline silicon has inefficient electroluminescence, so light sources have been critical for silicon photonics. Due to this, the creation of practical silicon light sources has been a primary focus in terms of R&D. Silicon lasers and amplifiers are useful in silicon photonics (SiPh); however, intense optical pumping is required for on-chip devices. Thus, optical pumping is likely to be off-chip. Significant Si-based sources are being developed and will be available in the market in the next five years to manage on-chip optical pumping.

Silicon photonics market Map:

Silicon Photonics Market Segmentation

Switches to account for second-largest share of silicon photonics market, by product, during forecast period

Switches in by product segment account for the second-largest SiPh market share and are expected to retain their position during the forecast period. The growth of the switches segment can be attributed to the increasing demand for these switches by data center operators due to their higher bandwidth, lower latency, and lower power consumption. This is particularly important as data centers become more complex, with increasing data traffic flowing between servers and storage devices. Also, the switches segment is expanding with the increasing adoption of 5G technology, which requires high-speed, low-latency communication networks to support the substantial amounts of data generated by connected devices.

Telecommunications segment account for second-largest market share of silicon photonics market, by application, during forecast period

The telecommunication application segment accounts for the second-largest market share in the silicon photonics market by application segment and is expected to retain its position during the forecast period. The increasing demand for broadband services and the growing demand for high-speed internet services has prompted telecom service providers to invest in developing new network technologies, including silicon photonics. This helps provide high-speed broadband connections and many broadband services over the existing network infrastructure. Additionally, a growing number of internet users over the years has also resulted in rising investments to develop average downlink and uplink speeds to provide internet services to these users.

Silicon Photonics Industry Regional Analysis

Asia Pacific region is expected to exhibit the highest CAGR during forecast period

The silicon photonics industry in Asia Pacific is expected to grow at the highest rate, driven by the growing use of silicon photonics (SiPh) in telecommunication, data center, and high-performance computing applications. The silicon photonics market in Asia Pacific is also driven by the high number of internet users in China and India. The increasing use of high-speed broadband networks and mobile devices requires developed infrastructure supporting telecommunication and high-speed communication. Hence, Asia Pacific provides a massive opportunity for the silicon photonics market growth.

Silicon Photonics Market Statistics by Region

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Top Silicon Photonics Companies - Key Market Players

• Cisco Systems, Inc. (US),
• Intel Corporation (US),
• MACOM Technology Solutions (US),
• GlobalFoundries Inc. (US),
• Lumentum Operations LLC (US),
• Marvell Technology, Inc. (US),
• Coherent Corporation (US),
• International Business Machines Corporation (IBM) (US),
• STMicroelectronics N.V. (US),
• Rockley Photonics Holdings Limited (US) are some key players operating in the Silicon Photonics Companies

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Scope of the Report

Silicon Photonics Market Highlights

This research report categorizes the silicon photonics market share based on Product, Component, Waveguide, Application, and Region.

Recent developments

• In August 2022, Lumentum Operations LLC (US) completed its merger with NeoPhotonics Corporation (US) to expand its product portfolio in the market for optical components used in cloud and telecom network infrastructure.
• In May 2022, GlobalFoundries Inc. (US) announced the launch of GF Labs. This new program extends the development horizon of innovative, differentiated semiconductor technology and broadens the company’s portfolio of feature-rich and enablement solutions. GF Labs will focus on advancing recent technology and long-term roadmap differentiation, enabling GF customers to develop innovative products and accelerate their time-to-market.

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