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The silicon photonics market size is forecast to increase by USD 5.23 billion, at a CAGR of 24.88% between 2023 and 2028. The market's growth rate is influenced by multiple factors. One significant driver is the rising demand for higher bandwidth capabilities, driven by the ever-increasing data requirements of modern applications. Additionally, the reduction in transportation costs plays a crucial role, allowing for more cost-effective and efficient distribution of products and services. Scalability beyond 400G is another key factor contributing to market growth, as it enables organizations to handle larger volumes of data and accommodate future growth. Furthermore, the growing adoption of hybrid silicon photonics technologies is driving innovation and expanding market opportunities by offering enhanced performance and efficiency in data transmission and processing.
Moreover, the market growth and forecasting report includes key player's detailed analyses of the competitive landscape of the market and information about 10 market companies, including AIO Core Co. Ltd., Broadcom Inc., Hamamatsu Photonics KK, II VI Inc., Infinera Corp., Innolume GmbH, Intel Corp., International Business Machines Corp., IPG Photonics Corp., MACOM Technology Solutions Inc., NKT Photonics AS, Nokia Corp., NVIDIA Corp., OpenLight Photonics Inc., OSCPS Motion Sensing Inc, RANVOUS Inc., Sicoya GmbH, TRUMPF SE Co. KG, and Cisco Systems Inc. Additionally, ams OSRAM AG offers silicon photonics such as hybrid silicon photonics CMOS functionality combined with photonic PIC in emerging microfluidic, optical diagnostics applications.
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Silicon photonics applications continue to be a driving force in the market, particularly in data centers and high-performance computing environments. The integration of electronic circuits with telecommunications providers has led to advancements in this technology. Trends such as increased Internet traffic, the rise of Cloud computing, and the widespread adoption of IoT and Smartphones are propelling the growth of Silicon photonics. However, challenges such as optimizing networking components, managing thermal effects, and ensuring efficient data transfer remain crucial for the development of these solutions in data centers and telecommunications infrastructure. Our researchers analyzed the market research and growth data with 2023 as the base year, along with the key market growth analysis, trends, and challenges. A holistic analysis of drivers, trends, and challenges will help companies refine their marketing strategies to gain a competitive advantage.
The increasing need for higher bandwidth is notably driving the market. The growth in Internet bandwidth is driven by two factors, especially, the increasing adoption of mobile computing devices, such as smartphones, tablets, and wearables with new capabilities, and the emergence of disruptive technologies that shift bandwidth use by altering the way users access the network.
Moreover, according to Cisco Systems Inc., the number of global Internet users was expected to increase from 3.2 billion Internet users in 2017 to 5.3 billion in 2023. In addition, this shows the high potential for the growth of this market, as with the growth in online business needs, the demand for faster connectivity will also increase. Cisco Systems Inc. estimated that the average global fixed broadband speed was expected to reach 110 Mbps in 2023. Hence, such factors are driving the market during the forecast period.
The development of silicon-integrated mini-ROADM is an emerging trend in the market. Mini-reconfigurable optical add-drop multiplexer (ROADM) systems, built using this technology, offer improved flexibility and scalability in optical networks, making them essential in addressing the increasing demands for bandwidth and network agility. In addition, Mini-ROADM solutions based on silicon photonics enable the seamless integration of optical add-drop functionality directly onto a silicon chip.
Moreover, this integration allows for compact, power-efficient, and cost-effective optical switching and routing capabilities within the network infrastructure. Therefore, telecom operators, and data center providers can efficiently manage and optimize their optical networks to support diverse traffic patterns and service requirements. Furthermore, one of the key advantages of silicon-integrated mini-ROADM is its ability to support dynamic wavelength routing, enabling on-demand provisioning of optical connections and bandwidth allocation. Hence, such factors are driving the market during the forecast period.
High heat generation by photonic components is a major challenge hindering the market. Silicon photonics devices, comprised of lasers, modulators, photodetectors, and other components, often generate significant amounts of heat during operation due to various factors including energy losses, resistance, and inefficiencies in conversion processes. In addition, the accumulation of heat can adversely affect the performance, reliability, and lifespan of these devices.
Moreover, excessive heat can lead to thermal degradation, increased signal attenuation, and wavelength drift, resulting in compromised device functionality and diminished optical performance. In addition, elevated temperatures can accelerate material fatigue, induce structural deformations, and cause premature device failure, leading to reliability issues and increased maintenance costs. Hence, such factors are hindering the market during the forecast period.
Silicon photonics applications encompass a broad range of industries and technologies, contributing significantly to data centers and high-performance computing environments. In these sectors, electronic circuits and telecommunications providers leverage the power of Silicon photonics to achieve unparalleled performance and efficiency. One of the key areas where Silicon Photonics shines is in optimizing Internet traffic and enabling seamless cloud computing operations. Its integration into IC (integrated circuits) enhances the functionality of devices such as IoT devices, smartphones, and AI-powered devices, empowering them with high-speed connectivity and data processing capabilities. Moreover, Silicon photonics plays a vital role in networking components and the evolution of 5G network infrastructure, ensuring robust data centers and facilitating high-speed data transmission. Its contribution to optical communications, data storage systems, and Datacom protocols is invaluable, improving data transfer efficiency and supporting bandwidth-intensive applications.
The communications segment is estimated to witness significant growth during the forecast period. The use of silicon photonics enables enterprises in the telecommunications industry to transmit a wider bandwidth of signals with low latency. In addition, it also helps in transmitting medium-to-long distance signals with a high data transmission rate, which helps maintain the quality of the transmitted signals during long-distance communication with minimal loss. Furthermore, these factors will lead to an increase in the demand for these products in the communications industry.
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The communications segment was the largest segment and was valued at USD 631.69 million in 2018. Moreover, communication is one of the most important sectors worldwide as it deals with the transmission of messages, texts, images, videos, documents, and other information through optical systems. In addition, silicon photonics is predominantly used in optical communication systems to transfer massive amounts of data at the fastest rate possible. Furthermore, increased bandwidth and low latency requirements have significantly surged the demand for silicon photonics-based devices, such as silicon photonics receivers, transmitters, and modulators. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.
The various applications offered by the laser segment will increase the market growth. A majority of silicon photonics technologies do not have integrated light sources and depend on external lasers as light sources. In addition, these lasers are usually externally integrated, positioned next to this integrated circuit (PIC), and incorporated using edge emitting facets, or atop the silicon PIC and coupled using vertical grouting couplers. Furthermore, it relies on lasers to convert electrical signals into light pulses for data transmission. In addition, lasers with faster modulation rates enable higher bandwidth capabilities, which are essential for meeting ever-increasing data demands in data centers and communication networks. Hence, such factors are fuelling the growth of this segment which in turn drives the market during the forecast period.
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North America is estimated to contribute 41% to the growth of the global market during the forecast period. Technavio's analysts have provided extensive insight into the market forecast, detailing the regional trends and drivers influencing the market's trajectory throughout the forecast period. North America has a well-developed and advanced network system, which facilitates the regional communications sector. In addition, operators in the communication sector from other regions upgrade their systems to meet the need to increase the bandwidth. Moreover, countries in North America, primarily the US and Canada, have added new systems to their networks. For example, while all other regions are trying to upgrade to 100G bandwidth, North America is focusing on developing a new system with 400G. Such innovations, in turn, foster market growth in the region. Furthermore, the demand for data centers is growing in North America, which is propelled by the rise in the adoption of HPC systems by industries such as the government, BFSI, and healthcare. Hence, such factors are driving the market in North America during the forecast period.
The market forecasting report includes the adoption lifecycle of the market research and growth, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and trends strategies.
Global Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Corning Inc: The company offers silicon photonics under the brand names Cisco 400 Gigabit Modules, Cisco 100 Gigabit Modules, Cisco 40 Gigabit Modules, Cisco 25 Gigabit Modules, Cisco 10 Gigabit Modules, Cisco One Gigabit Modules, and Cisco 100 Megabit Modules.
Market analysis and report of qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2018 to 2028.
The market is experiencing rapid growth and innovation, driven by a multitude of applications across various sectors. One of the primary drivers is the increasing demand for higher bandwidth and faster data transmission, fueled by the surge in Internet traffic and the proliferation of cloud computing services. Silicon Photonics is at the forefront of this evolution, leveraging integrated circuits (ICs) and advanced technologies to support the demands of 5G networks, Internet of Things (IoT) devices, and AI-powered systems.
Moreover, telecommunication providers, IT companies, and healthcare organizations are among the key players driving innovation in Silicon Photonics. With advancements in optical waveguides, modulators, and Wavelength-Division Multiplexing (WDM) filters, Silicon Photonics continues to revolutionize data transfer, connectivity, and performance in various industries. The integration of Silicon Photonics with healthcare and life sciences is also opening new frontiers in medical imaging, point-of-care testing, and visual data analysis, further expanding its market potential.
In addition, the market's scope extends beyond telecommunications, encompassing data center infrastructure, high-performance computing, and military and aerospace applications. Silicon Photonics offers advantages such as lower power consumption, high-speed data transmission, and efficient optical communications. It plays a crucial role in enabling high-speed broadband networks, optical interconnects, and advanced data storage systems. Key components of Silicon Photonics include transceivers, optical cables, switches, and photonic-integrated circuits (PICs). These components are essential for developing high-speed kits, optical networks, and broadband services that meet the increasing demand for bandwidth-intensive applications.
Furthermore, the market is witnessing widespread adoption across various industries, driven by its versatile applications and numerous benefits. Silicon photonics finds application in IC (integrated circuits), enabling the development of high-performance computing systems and advanced AI-powered devices. It plays a crucial role in 5G technology by facilitating high-speed data transmission and networking components essential for data center infrastructure. In the 5G network landscape, Silicon Photonics is instrumental in enhancing data storage systems and supporting efficient Datacom protocols. It optimizes connectivity through copper cables and robust interconnection networks, mitigating thermal effects and ensuring reliable performance even under thermal stress. Silicon Photonics also contributes to advancements in electronic technologies, particularly high-powered laser sources, and data communication servers.
Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 24.88% |
Market Growth 2024-2028 |
USD 5.23 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
23.6 |
Regional analysis |
North America, APAC, Europe, South America, and Middle East and Africa |
Performing market contribution |
North America at 41% |
Key countries |
US, China, Japan, Germany, and the UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AIO Core Co. Ltd., ams OSRAM AG, Broadcom Inc., Corning Inc., Hamamatsu Photonics KK, II VI Inc., Infinera Corp., Innolume GmbH, Intel Corp., International Business Machines Corp., IPG Photonics Corp., MACOM Technology Solutions Inc., NKT Photonics AS, Nokia Corp., NVIDIA Corp., OpenLight Photonics Inc., OSCPS Motion Sensing Inc, RANVOUS Inc., Sicoya GmbH, TRUMPF SE Co. KG, and Cisco Systems Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Component
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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