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Report Overview
The global photonic integrated circuits (PIC) market attained a value of USD 25443.45 Million in 2025 and is projected to expand at a CAGR of 20.30% through 2035. The market is further expected to achieve USD 161522.22 Million by 2035. Increasing demand for low-latency, high-bandwidth optical links in AI data centers is pushing PIC adoption in mainstream compute infrastructure.
As hyperscale operators struggle to move data fast enough between GPU clusters, storage and memory pools, they are turning to photonics to overcome electrical interconnect bottlenecks. In December 2025, Ayar Labs and Alchip demonstrated the first commercial optical-I/O engine built on TSMC’s Compact Universal Photonic Engine (COUPE) platform, delivering up to 100 Tb/s per accelerator using integrated PIC-based links. By offering scalable, energy-efficient optical connectivity, this photonic integrated circuits (PIC) market development confirms that PICs are moving from niche telecom use to mainstream data-center and AI-compute infrastructure.
The demand for highly integrated photonic chips is also rising across data centers, telecom networks, and sensing applications. Companies are rapidly adopting silicon photonics to compress multiple optical functions such as lasers, modulators, waveguides into a single, compact chip, enabling lower latency, reduced energy per bit, and easier scaling, redefining the photonic integrated circuits (PIC) market trends and dynamics. For example, in September 2025, STMicroelectronics announced that it is leading a newly launched consortium that has been selected by the European Commission under the EU CHIPS Joint Undertaking initiative. The project is called the 300mm Silicon Technology for Applications Relying on Light with Photonics Devices (STARLight).
2025
Base Year
2019-2025
Historical Period
2026-2035
Forecast Period
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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.
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Infinera Corporation, Coherent Corp. (II-VI Incorporated), and Intel Corporation are some of the major companies in the market.
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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.
Competitive Landscape
Leading photonic integrated circuits (PIC) market players like Infinera, Coherent, Intel and Lumentum are offering complete optical engines and reference designs for 400G, 800G and future 1.6T links that cloud and telecom customers can scale across product generations. The focus has shifted toward integrating lasers, modulators, and control electronics into tightly packaged engines that cut power per bit while simplifying assembly.
Photonic integrated circuits (PIC) companies that combine wafer capacity, advanced packaging, firmware, and co-development support for optical I/O and co-packaged optics, stand to benefit the most, over the forecast period. For niche players, there is an attractive opportunity in novel materials, testing platforms, and design automation that let tier-two module makers adopt PIC technology without owning fabs and without carrying massive long-term capital expenditure on their balance sheets.
Key Insights
Infinera Corporation
Infinera Corporation, founded in 2000 and headquartered in California, United States, is known as a pioneer of large-scale indium-phosphide photonic integrated circuits. It designs and manufactures its own PICs, coherent engines and transport platforms, giving operators tightly integrated optical systems for long-haul, subsea and metro networks.
Coherent Corp. (II-VI Incorporated)
Coherent Corp., founded in 1971 and headquartered in Pennsylvania, United States, is a global photonics supplier spanning materials, lasers and networking components. In the PIC arena, it provides vertically integrated datacom and telecom transceivers, leveraging silicon photonics, InP devices, VCSELs and passive optics from its own technology stack.
Intel Corporation
Intel Corporation, founded in 1968 and headquartered in California, United States, brings silicon-photonics expertise alongside its data-center and networking silicon. Through its Silicon Photonics product line, Intel ships 400G and 800G optical transceivers and licenses designs to ecosystem partners, enabling scalable interconnects for AI clusters and cloud switches.
Lumentum Holdings Inc.
Lumentum Holdings Inc., created as an independent company in 2015 and headquartered in California, United States, focuses on optical communications and commercial lasers. In PIC-related markets, it supplies coherent and high-speed pluggable transceivers, optical circuit switches and InP laser technology for cloud, AI and telecom networks.
Other key players in the market include IBM Corporation, Cisco Systems, Inc., and STMicroelectronics N.V., among others.
Photonic Integrated Circuits (PIC) Market Report Snapshots
*While we strive to always give you current and accurate information, the numbers depicted on the website are indicative and may differ from the actual numbers in the main report. At Expert Market Research, we aim to bring you the latest insights and trends in the market. Using our analyses and forecasts, stakeholders can understand the market dynamics, navigate challenges, and capitalize on opportunities to make data-driven strategic decisions.*
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Key Questions Answered in the Report
In 2025, the market reached an approximate value of USD 25443.45 Million.
The market is projected to grow at a CAGR of 20.30% between 2026 and 2035.
The market is estimated to witness a healthy growth in the forecast period of 2026-2035 to reach around USD 161522.22 Million by 2035.
Key strategies driving the market include standardizing interoperable PIC platforms, co-developing reference designs with hyperscalers, expanding III–V and SOI capacity, investing in packaging, and building partnerships around design tools, testing, and domain-focused photonic engines.
The key trends include the rising telecommunication network traffic and growing demand for data centres that require higher speed, increased bandwidth, and peak data rates.
The different integration types of PIC include monolithic integration and hybrid integration.
The major raw materials used in PIC include III-V material, lithium niobate, silica-on-silicon, and silicon-on-insulator, among others.
The key players in the market include Infinera Corporation, Coherent Corp. (II-VI Incorporated), Intel Corporation, Lumentum Holdings Inc., IBM Corporation, Cisco Systems, Inc., and STMicroelectronics N.V., among others.
Companies face high fab costs, yield learning risk, complex packaging, talent shortages, long qualification cycles, and pressure to hit lower power-per-bit targets while protecting margins in fiercely price-sensitive optical markets.
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