Photonic Integrated Circuit Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type of Raw Material (III-V Material, Lithium Niobate, Silica-on-silicon), By Integration Process (Hybrid, Monolithic), By Application (Telecommunications, Biomedical, Data Centers), By Region & Competition, 2020-2030F

Market Overview

The Global Photonic Integrated Circuit Market, valued at USD 3.39 Billion in 2024, is projected to experience a CAGR of 23.10% to reach USD 11.80 Billion by 2030. A Photonic Integrated Circuit (PIC) is a microchip integrating multiple photonic components to generate, manipulate, and detect light signals, using photons for information transfer. Market growth is primarily driven by increasing demand for high-speed data communication and expanding data centers. The rollout of 5G networks, progress towards 6G, and advancements in quantum computing also provide substantial impetus.

According to Photonics21, the global photonics components and systems market, encompassing PICs, achieved $865 billion in 2022. This performance reflects strong adoption of light-based technologies. Nevertheless, a significant impediment to market expansion remains the high cost and technical complexity inherent in PIC packaging. This factor necessitates specialized expertise and substantially increases product costs, posing a persistent challenge for broad commercialization.

Key Market Drivers

The escalating demand for high-speed data transmission serves as a primary catalyst for the Global Photonic Integrated Circuit market. Modern digital infrastructure, particularly within hyperscale data centers and advanced communication networks, necessitates unprecedented bandwidth and minimal latency to support expanding cloud computing services and emerging artificial intelligence applications. For instance, according to Ciena, in March 2024, "Ciena Celebrates Major Customer Milestones and Optical Leadership at OFC 2024 in San Diego", network operator Vocus deployed Ciena's 1.6 terabits per second technology in Australia, demonstrating the critical need for ultra-fast data pipelines in real-world applications. Concurrently, continuous advancements in silicon photonics technology are fundamentally enabling the development of more sophisticated and efficient photonic integrated circuits. This technological evolution allows for the integration of complex optical functionalities onto a single silicon chip, leading to compact, power-efficient, and cost-effective solutions. A notable advancement occurred when IBM announced a new co-packaged optics process in December 2024, enabling a faster training speed of data center interconnects for generative AI models up to five times faster, showcasing the profound impact of silicon photonics on computational performance.

These drivers collectively contribute to the broader expansion of the photonics industry, which underpins the photonic integrated circuit market. According to SPIE, in its "OPTICS & PHOTONICS Global Industry Report", global annual revenues from the production of optics and photonics core components reached $368 billion in 2022, underscoring the significant economic footprint of light-enabled technologies.

Download Free Sample Report

Key Market Challenges

A significant impediment to the expansion of the Global Photonic Integrated Circuit (PIC) Market is the high cost and technical complexity inherent in PIC packaging. This challenge necessitates specialized expertise and precision manufacturing techniques, directly increasing product costs and extending development cycles. The intricate process of integrating various photonic and electronic components, often with sub-micron alignment tolerances, leads to substantial manufacturing expenses and limits throughput for high-volume production.

This elevated cost structure directly hampers broad commercialization by creating a financial barrier for potential adopters and stifling innovation in cost-sensitive applications. According to a study released by Photonics21 in 2024, integrated photonics is a focus of China's National Integrated Circuit Industry Investment Fund, which commenced Phase III with a budget of €39 billion. This level of investment highlights the considerable capital expenditure required in the integrated photonics sector, of which packaging constitutes a critical and costly component, thereby restricting wider market accessibility and hindering overall growth.

Key Market Trends

The Global Photonic Integrated Circuit (PIC) market is significantly influenced by the emergence of Co-Packaged Optics for data centers. This trend involves the integration of optical engines directly within the same package as high-bandwidth electrical ASICs, such as network switches, to overcome escalating electrical interconnect bottlenecks. This architectural shift addresses the critical need for higher bandwidth density and reduced power consumption in modern data centers, particularly with the proliferation of artificial intelligence and machine learning workloads. According to the Optical Internetworking Forum, in February 2024, the OIF was nearing completion of its 800ZR Implementation Agreement, signaling the industry's progression towards next-generation coherent pluggable optics. This development is crucial for facilitating faster and more efficient data transmission within and between data centers, directly impacting the demand for advanced PIC solutions.

Another pivotal trend shaping the PIC market is the leveraging of CMOS Fab Infrastructure for Photonic Integrated Circuit manufacturing. This involves utilizing established Complementary Metal-Oxide-Semiconductor fabrication processes, traditionally used for electronic chips, to produce photonic integrated circuits. This approach significantly reduces manufacturing costs and accelerates time-to-market by capitalizing on the mature, high-volume capabilities of existing semiconductor fabs. According to Optica's 2023 financial report, the consolidated Optica and Optica Foundation's net worth was US$154 million as of December 31, 2023, reflecting the broader financial health and investment in the optics and photonics sector. Furthermore, Imec, in January 2025, announced a breakthrough in silicon photonics with the successful wafer-scale fabrication of electrically-pumped GaAs-based nano-ridge lasers directly on 300 mm silicon wafers within its CMOS pilot prototyping line, demonstrating the tangible benefits of this manufacturing strategy. This integration drives economies of scale, making PICs more accessible for a wider array of applications.

Segmental Insights

The Data Centers segment represents the fastest-growing area within the Global Photonic Integrated Circuit Market, driven by the escalating demand for high-speed, energy-efficient data transmission. Photonic Integrated Circuits (PICs) are crucial for supporting the exponential increase in data traffic generated by cloud computing, artificial intelligence, and real-time processing applications. Their ability to enable higher bandwidth, reduce power consumption, and provide lower latency compared to conventional electronic interconnects makes them indispensable for the next generation of data center infrastructure, optimizing operational efficiency and scalability.

Regional Insights

Asia Pacific leads the Global Photonic Integrated Circuit Market due to its robust semiconductor manufacturing capabilities and substantial investments in communication infrastructure. The region, particularly nations like China, Japan, and South Korea, benefits from significant government support for advanced photonic research and domestic production, fostering a strong ecosystem for development and adoption. The escalating demand for high-speed data transmission, driven by extensive 5G network deployment and the proliferation of hyperscale data centers across Asia Pacific, critically fuels market growth. This combination of manufacturing strength, strategic investments, and high demand establishes Asia Pacific's leadership in this market.

Recent Developments

• In March 2025, PhotonDelta and Silicon Catalyst announced a strategic collaboration aimed at fostering innovation and global scaling for early-stage photonics startups. This partnership combines PhotonDelta's substantial photonic chip ecosystem, backed by approximately $1.5 billion, with Silicon Catalyst's extensive semiconductor incubator network of over 500 partners. The initiative provides startups with access to technical and business advisors, go-to-market support, and crucial funding opportunities across both ecosystems. This collaboration is designed to accelerate the commercialization of photonic integrated circuit technologies, addressing the intellectual, practical, and financial needs of emerging companies in the sector.

• In March 2025, Keysight Technologies Inc. introduced its Photonic Designer, a new comprehensive solution for the accurate design and simulation of photonic integrated circuits. This definitive tool integrates precise physics-based simulations with real-world data, aiming to simplify the photonic circuit design process. It supports a seamless workflow from schematic design through validation, ensuring design compliance and optimizing models for manufacturing. By eliminating fragmented workflows and improving accuracy, this product is expected to reduce development time and mitigate risks for engineers creating advanced photonic integrated circuits.

• In September 2024, Lumentum Holdings Inc. showcased its enhanced 800G ZR+ coherent pluggable transceivers at ECOC 2024, highlighting advancements for AI-driven, next-generation networks. These transceivers are optimized for extended reach and higher optical power, supporting data center interconnects with increased capacity. The enhanced performance of these 800G ZR+ transceivers is attributed to their hybrid photonic integrated circuits, which incorporate Lumentum’s proprietary indium phosphide technology for superior transmission. This development is crucial for managing rapidly growing data traffic and improving energy efficiency in large-scale AI infrastructure.

• In June 2024, Intel Corporation achieved a significant breakthrough in integrated photonics technology by demonstrating the industry's first fully integrated optical compute interconnect (OCI) chiplet. This chiplet was co-packaged with an Intel CPU and successfully processed live data at the Optical Fiber Communication Conference. The OCI chiplet leverages Intel's silicon photonics technology, integrating on-chip lasers, optical amplifiers, and an electrical integrated circuit. This innovation is designed to address the escalating demands for higher bandwidth, lower power consumption, and extended reach in emerging AI infrastructure and high-performance computing applications.

Key Market Players

• Intel Corporation
• Cisco Systems, Inc.
• Huawei Technologies Co., Ltd.
• Ciena Corporation
• Broadcom Inc.
• Nokia Corporation
• Fujitsu Limited
• Alcatel-Lucent Enterprise Inc.
• Lumentum Operations LLC

Report Scope:

In this report, the Global Photonic Integrated Circuit Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Photonic Integrated Circuit Market, By Type of Raw Material:

o   III-V Material

o   Lithium Niobate

o   Silica-on-silicon

• Photonic Integrated Circuit Market, By Integration Process:

o   Hybrid

o   Monolithic

• Photonic Integrated Circuit Market, By Application:

o   Telecommunications

o   Biomedical

o   Data Centers

• Photonic Integrated Circuit Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   Asia Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Photonic Integrated Circuit Market.

Available Customizations:

Global Photonic Integrated Circuit Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

Global Photonic Integrated Circuit Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]