Global Photonic Integrated Circuits (PIC) Market Report and Forecast 2024-2032

Global Photonic Integrated Circuits (PIC) Market Outlook

The global photonic integrated circuits (PIC) market size reached a value of nearly USD 21,150 million in 2023. The market is projected to grow at a CAGR of 20.3% between 2024 and 2032 to reach around USD 113,984 million by 2032.

Key Takeaways

• The market for photonic integrated circuits is being driven by its increasing application in various end-use sectors, including data and telecommunications, medical and healthcare, engineering and transport.

• Infinera Corporation, Coherent Corp. (II-VI Incorporated), and Intel Corporation are some of the major companies in the market.

• Use of the internet has grown rapidly across the globe, reaching about 91% of the population in North America, 87% in Europe and 73% in Asia Pacific.

An integrated photonic circuit (PIC) or optical circuit is a system that incorporates several photonic functions and is similar to an integrated electronic circuit. Integrated photonics has vast potential in the automotive sector, including vehicle and system design. LiDAR sensors in autonomous vehicles play a pivotal role in generating a 3D map of the vehicle’s surroundings, serving as a preventive measure against collisions.

Some of the factors driving the photonic integrated circuits (PIC) market growth are the rising smartphone-based applications and the growing need for more digital infrastructure from cloud service providers, hyper scalers, and over-the-top media companies. The increasing use of data is necessitating the need for more energy-efficient ways to increase the speed and capacity of data networks.

Key Trends and Developments

Increasing adoption of 5G technology; growing demand for PIC in different end-use sectors; innovations in PIC technology; and growing smartphone applications drive the photonic integrated circuits (PIC) market growth

Figure: Global 5G Subscriptions Historical and Forecast: Million (2018-2028)

Global Photonic Integrated Circuits (PIC) Market Trends

It is anticipated that by 2030, 30 billion connected Internet of Things (IoT) devices will be established across the globe. The growth of the PIC market is supported by the rising telecommunication network traffic and growing demand for data centres that require higher speed, increased bandwidth, and peak data rates, among others. Additionally, LiDAR sensors in autonomous vehicles play a pivotal role in generating a 3D map of the vehicle’s surroundings, serving as a preventive measure against collisions.

Furthermore, the skyrocketing data usage with the adoption of cutting-edge technologies by various enterprises, including big data analytics, cloud computing and IoT are catering to a strong data centre demand. The increasing demand for autonomous vehicles and growing concern for passenger safety require smart sensing and optical devices are also creating opportunities for the photonic integrated circuits (PIC) market growth.

Figure: Data Centre Breakdown by Major Countries 2021 (%)

Market Segmentation

Global Photonic Integrated Circuits (PIC) Market Report and Forecast 2024-2032 offers a detailed analysis of the market based on the following segments:

Monolithic integration is expected to hold significant share in the photonic integrated circuits (PIC) market in the forecast period.

Monolithic integration features the entire circuit constructed on a single piece of silicon or another semiconductor. Integrating laser sources and photodetectors in silicon photonic integrated circuits (Si-PICs) through the heteroepitaxy of III-V semiconductors on Si offers efficient large-scale production. Currently, most sophisticated PICs contain over 1000 optical components on a single, monolithic, InP-based chip. Some of the key companies offering monolithic PICs include Infinera and Lumentum Holdings Inc.

III-V Materials dominates the photonic integrated circuits (PIC) market share

III-V Material also holds a major market share. The group III-V materials are direct-bandgap materials that can readily facilitate photons required to generate light.  Hence, they are used to develop photonic devices and integrated circuits when monolithic integration is required.

Competitive Landscape

Major players in the photonic integrated circuits (PIC) market are increasing their collaboration, partnership, and research and development activities to gain a competitive edge

Other key players in the photonic integrated circuits (PIC) market include IBM Corporation, Cisco Systems, Inc., and STMicroelectronics N.V.

Global Photonic Integrated Circuits (PIC) Market Analysis by Region

The Asia Pacific is anticipated to hold a dominant position in the photonic integrated circuits (PIC) market in the coming years. In Q2 2023 South Korea, China, and Japan stood as the top countries in the adoption of 5G. China occupies a top position in the market for LiDAR. The growing developments in logistics, smart infrastructures, robot axes, and delivery robots, coupled with the booming smart driving sector, contribute to the increased adoption of photonics devices.

The North America photonic integrated circuits (PIC) market is being driven by the presence of several optical component manufacturers finding applications in various end-use segments. North America is a leader in the uptake of 5G connections. By Q4 2022, North America accounted for a total of 119 million 5G and 507 million LTE connections. In 2022, 5G subscription penetration in North America stood at 41%.

Europe holds a growing photonic integrated circuits (PIC) market share and is driven by the presence of an extensive range of companies, with 86% of the 5000 European firms being SMEs specialising in sensors, lasers, optics, fibres, and photonic integrated circuits.

Key Highlights of the Report

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Photonic Integrated Circuits (PIC) Market Report Snapshots

Photonic Integrated Circuits (PIC) Market Size

Photonic Integrated Circuits (PIC) Market Trends

Photonic Integrated Circuits (PIC) Companies

Photonic Integrated Circuits (PIC) Market Regional Analysis