New York, Aug. 09, 2023 (GLOBE NEWSWIRE) -- The global silicon photonics market size is slated to expand at ~29.80% CAGR between 2023 and 2035. The market is poised to garner a revenue of USD 55 billion by the end of 2035, up from a revenue of ~USD 2 billion in the year 2022.The market growth is attributed to increasing demand for cloud-based services and 5G technology, as well as technological advances in optoelectronics. Cloud services have greatly increased the demand for data centers in recent years. A survey of cloud executives shows that 40% of organizations plan to leverage cloud-based services and products, 34% plan to migrate legacy business applications to the cloud, and 31% plan to migrate on-premises workloads to the cloud. More than 50% of companies are expected to accelerate their business initiatives using industry-specific cloud platforms by 2027.
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The increasing adoption of cloud-based services requires higher network speeds, resulting in increased demand for high-speed optical interconnects using silicon photonics technology. This increased demand will fuel the growth of the silicon photonics market in the coming years. Apart from that, factors driving the market growth are considered to be the growing demand for high-speed wireless networks like 5G and 6G and the growing demand for low-cost miniaturized optical communication systems. A total of 230 million 5G subscriptions are currently available worldwide.
Silicon Photonics Market: Key Takeaways
- Market in Asia Pacific to propel highest growth
- The laser segment to garner the highest growth
- Market in North America to grow at a highest rate
Increasing Need for faster and more reliable data transmission across the Globe to Boost Market Growth
In the period 2011-2021, start-ups in the field of Industry 4.0 received an increase in annual funding of 335%. In 2021, USD 2 billion was invested in future companies developing Industry 4.0 technology. As of 2021, 130 acquisitions related to Industry 4.0 were manufactured annually. The rise of Industry 4.0 technologies such as artificial intelligence, the Internet of Things and 5G increases the need for faster and more reliable data transmission. Silicon photonics addresses these needs by providing a more efficient data transmission method that uses light instead of electrical signals, making it the ideal solution for the Industry 4.0 era.
According to current estimates, there are currently 7 billion IoT devices in use, and with the rapid rollout of 5G and other technologies, this number is expected to more than triple, reaching a total of 25.44 billion devices in 2030. IoT devices generate and transmit large amounts of data, which requires high-speed communication networks and bandwidth. Silicon photonics is a more efficient way to transmit this data than traditional copper-based communication networks. The deployment of silicon photonics is increasing with the rapid growth of telecommunications services. India has a telecom penetration of 85%, the total number of broadband subscribers reached 787 million in April 2022 and there were 1.13 billion subscribers in April 2022.
Silicon Photonics Market: Regional Overview
The global market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Expanding number of data centers to Drive the Market Growth in Asia Pacific Region
The silicon photonics market in Asia Pacific region is estimated to garner the largest revenue by the end of 2035. The growth of the market is mainly attributed to the increasing number of data centers and the growing demand for high-speed internet connections in the region. With 450 data centers, China ranks third among countries in terms of the number of data centers. As of 2021, Indian data centers are expected to occupy approximately 7 million square feet of space. As of 2025, India is expected to have 180 data centers and 1,300 MW of data center capacity. With the increasing spread of data centers, the need for faster and more efficient data transmission also increases.
Silicon photonics is an emerging technology that uses light to transmit data at high speeds, making it an attractive solution for data centers. In addition, the increasing demand for bandwidth in the region due to the rapid growth of the commercial sector is driving the need for faster and more efficient communications, further increasing the market share of silicon photonics in the region.
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Growing research and development to Propel the Growth in the North America Region
The North America silicon photonics market is estimated to garner the highest CAGR by the end of 2035. The growth of the market in this region can primarily be attributed to government initiatives and funding. Governments in North America have recognized the strategic importance of silicon photonics and have initiated various programs and funding initiatives to support its development. For instance, the U.S. government has invested in research and development programs to advance silicon photonics technology and its applications in sectors like defense, telecommunications, and healthcare.
North America is home to several leading market players and research institutions actively involved in silicon photonics research, development, and commercialization. These organizations contribute to the growth of the market by driving technological advancements, fostering innovation, and expanding product offerings. The increasing demand for cloud services and the rapid expansion of data centers have driven investments in infrastructure upgrades. Silicon photonics technology is being adopted to enhance data transfer capabilities within these data centers, leading to market growth.
Silicon Photonics, Segmentation by Component
- Optical Waveguides
- Modulators
- Photodetectors
- Laser
Amongst these four segments, the laser segment in silicon photonics market is anticipated to hold the largest share over the forecast period. The growth of the segment is attributed to the growing demand for high-speed data communications, the growing need for data centers and the growing demand for optical connectivity. It is estimated that data transmission networks consumed between 260 and 340 TWh of electricity in 2021, accounting for 1.1-1.4% of electricity consumption. 5G is expected to account for 56% of mobile traffic in 2027, up from 10% in 2021.
The laser segment is expected to be the most dynamic segment during the forecast period as it is crucial for the construction of optical communication systems. In addition, lasers are a key component in silicon photonics as they convert electrical signals into light signals and are used in data centers for high-speed data transmission due to the increasing demand for high-speed data transmission in consumer electronics and telecommunications.
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Silicon Photonics, Segmentation by Product
- Transceivers
- Cables
- Switches
- Sensors
- Optical Attenuators
- Others
Amongst these segments, the transceivers segment in silicon photonics market is anticipated to hold a significant share over the forecast period. Telecommunications and data communication networks are undergoing a transition to higher network speeds, such as 100G, 400G, and beyond. This transition is driven by the need for greater bandwidth to support data-intensive applications. Transceivers that support these higher network speeds are essential for upgrading network infrastructure and enabling seamless data transmission.
Advancements in optical networking technologies, including wavelength division multiplexing (WDM) and coherent optical transmission, have contributed to the growth of the transceivers market. These technologies enable higher data capacity, longer transmission distances, and improved signal quality, driving the need for advanced transceiver solutions. The deployment of 5G networks is driving the demand for transceivers that can support the higher frequencies and bandwidths required by 5G communication. Transceivers play a critical role in connecting base stations, facilitating high-speed data transfer, and enabling the low latency capabilities of 5G networks.
Silicon Photonics, Segmentation by Application
- IT & Telecommunications
- Consumer Electronics
- Healthcare & Life Sciences
- Commercial
- Defense & Security
- Others
Few of the well-known market leaders in the silicon photonics market that are profiled by Research Nester are MACOM, Intel Corporation, Cisco Systems, Inc., Juniper Networks, Inc, International Business Machines Corporation, Sicoya GMBH, GlobalFoundries, Finisar Corporation, Mellanox Technologies, STMicroelectronics N.V., and other key market players.
Recent Development in the Silicon Photonics Market
- MACOM announces the availability of 25G avalanche photodiode optical devices designed for 5G wireless and data center applications. They are designed to help reduce the cost of deploying next-generation networks and deliver improved performance for a variety of 5G wireless and data center applications.
- It was announced that Intel Corporation has successfully integrated a Tbs (terabytes per second) silicon photonics engine into a 12.8 Tbs programmable Ethernet switch in the form of a Tbs (terabytes per second). . This integration has enabled Intel to offer a data transfer rate that is up to twenty times faster than current rates.
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