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Global Photonic Integrated Circuit Market (2021 to 2026) - Growth, Trends, COVID-19 Impact and Forecasts

·9-min read

Dublin, Dec. 01, 2021 (GLOBE NEWSWIRE) -- The "Global Photonic Integrated Circuit Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" report has been added to ResearchAndMarkets.com's offering.

The global photonic IC market was valued at USD 5790.6 million in 2020, and it is projected to be worth USD 21649.8 million by 2026, registering a CAGR of 22.4% during the forecast period of 2021-2026.

The low-cost photonic hardware manufactured through a hybrid or monolithic process is finding great demand from end-user applications, such as data centers growing huge in capacity every year, owing to data-driven ecosystems.

Key Highlights

  • When integrated on a single chip, multiple photonic components, such as waveguides, lasers, modulators, and detectors, are referred to as Photonic ICs. Compared to traditional ICs, photonic ICs are extremely fast, accommodate higher bandwidth, and are highly power efficient. These features have been addressing some of the critical drawbacks of traditional ICs. In the case of photonic ICs, it is estimated that the power consumed in such critical applications could be reduced by at least 50%. The frequencies that could be covered with photons are about 1,000 to 10,000 times higher than the spectrum to be covered with microelectronics. This means that using photonic ICs, end-users can achieve much higher frequencies that are far more energy-efficient when compared to traditional ICs.

  • The Photonic integrated circuits (PICs) allow integration of all the required optical functions of lidar on a single chip. This is expected to boost innovations and collaborations in the studied market. In February 2021, Scantinel Photonics GmbH launched its chip-scale massive-parallelized scanning LiDAR system (OEATM) based on a photonic integrated circuit (PIC). The PIC has 256 channels and enables full performance long-range (>300m) solid-state scanning. The development and fabrication of the PIC were done in collaboration with IMEC.

  • Also, in September 2021, Tower Semiconductor introduced an optical, automotive lidar integrated circuit made using its PH18 silicon photonics platform. PH18 uses silicon and silicon nitride waveguides to create and link optical building blocks, including couplers, interferometers, radiators, modulators, and photodetectors. Its low-loss silicon nitride waveguides are capable of handling the optical powers necessary for lidars. It can build a 3D image of the surrounding environment without moving parts. Instead, it employs an optical phased array and amplitude and phase modulators on the silicon chip.

  • Several market developments in the form of Photonic FOG for automotive have been depicting a way forward for the industry. For instance, the PIC technology by the KVH is expected to be added to its inertial sensor product line across applications such as navigation to stabilization, and pointing. Particularly, KVH's fiber optic gyros (FOGs) and FOG-based products are well-suited for the large and growing autonomous market. The company, in June 2020 has launched its P-1775 inertial measurement unit (IMU) featuring inside a PIC Inside, a photonic integrated chip (PIC) technology. With the first customers integrating the P-1775 IMU with PIC Inside into their next-generation rocket launch vehicle, the product has been designed to deliver 20 times higher accuracy than less expensive MEMS inertial measurement units.

  • TACNAV systems which are in current use by the U.S. Army and Marine Corps in addition to multiple allied militaries around the world, KVH's FOGs and FOG-based IMUs in tandem with serving applications ranging from the optical, antenna, and sensor stabilization systems to mobile mapping solutions and autonomous platforms and cars, the potential of using PIC Inside for the same increases.

Key Market Trends

Data Centers by Application to Drive the Market Growth

  • The Internet of Things (IoT), cloud, streaming video, 5G, and many other trends are forcing data centers to scale exponentially. According to the Cisco Global Cloud Index, annual data center internet protocol traffic is expected to surpass 20 Zettabytes (or 20x1021 bytes) by 2021. In the data centers, optical links connect the server racks through a complex network of fiber optical cables. Currently, 100 Gb/s optical links that are made up of 4x25 Gb/s single channels or lanes are sustaining data traffic within the data center. These links transmit data over lengths of fiber stretching from a few meters up to 2km, with single-mode fiber the optical medium of choice for spanning large distances.

  • More likely, over the next few years, data centers operators are expected to upgrade their networks to 400 Gb/s optical links (by aggregating 4x100 Gb/s lanes per link) as a step to meet the enormous demand for data. As the number of optical links within data centers will grow exponentially, these links need to be low-cost and consume as little power a/s possible, which is expected to drive the photonic IC market.

  • However, Silicon nanophotonic technology is already in system-to-system connection in data centers. In the future, the technology will move into the connections between chips within servers and eventually between sections on the chips themselves. This evolution is a response to the difficulty of moving electrons at higher and higher speeds over shorter and shorter distances. In March 2021, Teramount, a provider of connectivity solutions for ultra-high bandwidth applications, announced that it had completed a USD 8 million funding round. This investment will help in their photonic-plug technology, which will open the door to the next-generation tech set to fulfill the promise of silicon photonics in data centers, mobility 5G, and beyond.

  • Additionally, semiconductor vendors have been addressing the need for solutions regarding bandwidth and the ability to properly process large data transfers without hampering scalability or reducing manufacturing reliability. Further, ongoing research in the field is expected to develop new and advanced technology solutions. In 2021, Intel research believed that the company would free data to move around the data center much more efficiently at lower power and lower latency. Their research goals are 1Tb/s per fiber at @ 1pJ/b with up to a 1km reach. By reducing the optical I/O power below electrical I/O and miniaturizing the footprint of their silicon photonics devices to drive down cost by approaching the I/O power wall.

  • In Nov 2021, POET Technologies Inc., the designer and developer of the "POET Optical Interposer" and Photonic Integrated Circuits (PICs) for the data center and telecommunication markets, has agreed on the first phase of a supply agreement with a global supplier of lasers and other components used in high-speed optical networking equipment. The companies will collaborate on designing and producing flip-chippable Continuous Wave (CW) high power lasers for use in the Company's 400G Optical Engines.

North America to Hold a Major Market Share

In North America, the demand for photonic integrated circuits (PIC) based products is driven by data centers and WAN applications of fiber optic communication. The growing need for high-speed data transmission increased the data traffic in cloud computing, and the rapid roll-out of IoT has created a potentially booming photonic integrated circuit industry in the region. According to Cisco Cloud Index, North America is expected to generate the most cloud traffic (7.7 ZB per year) by the end of 2021. Such trends are expected to increase market adoption.

Service providers are facing increasing demand for bandwidth, much of which is being driven by mobile, video, and cloud-based services. Companies are expected to base their optical networks on the PIC, which is likely to contribute to the market's growth positively. Multinational companies, such as IBM Corporation, Intel Corporation, and Cisco, in the region, are working hand in hand with partners in academia, business, and the government, to develop PIC-based solutions for communications challenges.

For smaller enterprises, public-private partnerships have forged national research consortiums, such as American Institute for Manufacturing Integrated Photonics (AIM Photonics, Rochester, NY) in the United States, Canadian Photonic Industry Consortium, Florida Photonics Cluster, and Ontario Photonics Industry Network.

The Defense Advanced Research Projects Agency (DARPA) recently issued a solicitation for the Atomic-Photonic Integration (A-PhI) project to reduce the complexity of trapped-atom high-performance PNT devices. The researchers envision photonic integrated circuits replacing the optical assembly behind atomic physics devices while enabling the necessary trapping, manipulation, cooling, and interrogation of atoms. This is predicted to increase the adoption of PIC technology developments over the forecast period.

Furthermore, the US government is backing the next generation of photonics technology for higher-speed internet and mobile computing. For instance, in recent years, the US Department of Defense (DoD) stated to invest USD 110 million over five years. A consortium of hundreds of nonprofits, companies, and universities, including the Society of Photo-Optical Instrumentation Engineers (SPIE), has pledged an additional USD 500 million for AIM Photonics to be the sixth of nine public-private partnerships in the National Network of Manufacturing Innovation (NNMI) program.

Key Topics Covered:

1 INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study

2 RESEARCH METHODOLOGY

3 EXECUTIVE SUMMARY

4 MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.3 Assessment of the Impact of COVID-19 on the Market

5 MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Growing Applications in Telecommunications and Data Centers
5.1.2 Investments and Research to Miniaturize the PICs
5.2 Market Challenges
5.2.1 Continued Demand for Traditional ICs
5.2.2 Optical Networks Capacity Crunch

6 Market SEGMENTATION
6.1 By Type of Component
6.1.1 Laser (Optical Laser)
6.1.2 Modulators
6.1.3 Detectors
6.1.4 Transceivers
6.1.5 Multiplexer/Demultiplexer (MUX/DEMUX
6.1.6 Optical Amplifiers
6.2 By Type of Raw Material
6.2.1 III-V Material
6.2.2 Lithium Niobate
6.2.3 Silica-on-silicon
6.2.4 Other Raw Materials
6.3 By Integration Process
6.3.1 Hybrid
6.3.2 Monolithic
6.4 By Application
6.4.1 Telecommunications
6.4.2 Biomedical
6.4.3 Data Centers
6.4.4 Other Applications (Optical Sensors (LiDAR), Metrology, etc.)
6.5 By Geography
6.5.1 North America
6.5.2 Europe
6.5.3 Asia Pacific
6.5.4 Rest of the World

7 COMPETITIVE LANDSCAPE
7.1 Company Profiles
7.1.1 Neophotonics corporation
7.1.2 Poet Technologies
7.1.3 II-VI Incorporated
7.1.4 Infinera Corporation
7.1.5 Intel Corporation
7.1.6 Cisco Systems Inc.
7.1.7 Source Photonics Inc.
7.1.8 Lumentum Holdings
7.1.9 Caliopa
7.1.10 Effect Photonics
7.1.11 Colorchip Ltd

8 INVESTMENT ANALYSIS

9 FUTURE OF THE MARKET

For more information about this report visit https://www.researchandmarkets.com/r/mzckbc

CONTACT: CONTACT: ResearchAndMarkets.com Laura Wood, Senior Press Manager press@researchandmarkets.com For E.S.T Office Hours Call 1-917-300-0470 For U.S./CAN Toll Free Call 1-800-526-8630 For GMT Office Hours Call +353-1-416-8900


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