Silicon photonics market worth $5.0 billion by 2028

The silicon photonics market was valued at USD 1.3 billion in 2022 and is projected to reach USD 5.0 billion by 2028, growing at a CAGR of 28.5% from 2023 to 2028 according to a new report by MarketsandMarkets™. Factors accelerating the growth of the silicon photonics market are the rising demand for CMOS-integrated silicon photonics technology in data centers, the growing focus on reducing power consumption using silicon photonic transceivers, the increasing requirement for high bandwidth and high data transfer capabilities, and the surging demand for high-speed broadband services.

Datacenter and high-performance computing applications are expected to exhibit the highest CAGR during the forecast period.
The silicon photonics industry for data center and high-performance computing is expected to grow at the highest CAGR during the forecast period. Data centers are experiencing an exponential increase in data traffic due to the rise in cloud computing. Owing to technological advancements in high-performance computing, there would be an increase in the adoption and integration of optics using silicon photonics.

Industries like manufacturing, energy and utility, chemical, government and defense, and education need high-performance computing to easily oversee large volumes of data and simultaneously support high-performance data analysis. Additionally, high-performance computing can also provide high accuracy and fast data processing. These benefits drive the adoption of high-performance computing, which, in turn, causes the demand for silicon photonics for this application.

Lasers segment is expected to witness highest CAGR during forecast period.
The lasers component segment dominated the silicon photonics component market in 2022 and is expected to retain its position while growing at the highest growth rate during the forecast period. Lasers are an essential component in silicon photonics as they are used to generate and transmit light signals over long distances. The demand for high-speed data transmission and communication is expected to drive the market’s growth, while lasers will play a critical role in enabling this technology. In addition to using lasers in data communication, they are also increasingly used in other applications such as sensing, medical, and industrial applications. Furthermore, lasers are used in optical sensing applications such as lidar, which is used in autonomous vehicles. As a result, the market for lasers is also expected to grow in the coming years, which could positively impact the growth of the lasers component in the silicon photonics market.

North America to hold the largest market share throughout the forecast period.
North America holds the largest market share of the silicon photonics market and is expected to retain its position during the forecast period, particularly in the data center and HPC segments. This can be attributed to the presence of major players in the region, such as Intel Corporation (US), Cisco Systems Inc. (US), International Business Machines Corporation (IBM) (US), and so on. The region is also home to some of the world’s largest data centers and HPC facilities, driving the demand for high-speed, low-power interconnects. Additionally, the region has a well-established infrastructure and regulatory framework that supports adopting modern technologies, further fueling the growth of the silicon photonics market in North America.

CT Bureau