Silicon Photonics Market Analysis

Silicon Photonics Market Analysis

The transceiver segment dominated more than 85% of the market share in 2019 and is expected to witness 30% growth rate through 2026. The device is available in a compact package and delivers high-speed performance in optical communication system. Furthermore, its low-power consumption capability has increased its acceptance in applications such as telecommunication, high-performance computing, and data centers.

Market players are focusing on the development of advanced transceiver integrated with silicon photonics technology to increase their business opportunities in high computing applications. Companies are also raising funds from investors to improve their research initiatives in the market.

The lasers segment in the silicon photonics market held 35% of revenue share in 2019 led by the growing development in hybrid Silicon and tunable lasers. Through hybrid approach, leaders can fabricate electrically driven lasers on a Silicon wafer that can be integrated with other photonics devices. This will increase their adoption in various data centers and telecommunication applications to improve network capacity in countries such as the U.S., UK, and France.
 

Moreover, to meet the challenging requirements of next-generation coherent optics, companies are adopting tunable lasers that use high-performance silicon photonics. These lasers power the capability for low-cost fabrication in CMOS foundries, thereby increasing their usage in high-speed coherent applications. Compact tunable lasers also deliver high-performance in emerging applications such as Optical Coherence Tomography (OCT) in biomedical and LiDAR in autonomous vehicles.
 

The data centers and HPC segment accounted for 70% of the silicon photonics market share in 2019 impelled by the rising data center traffic and increasing volume in global network. According to Cisco Global Cloud Index, the annual data centers internet protocol traffic is projected to surpass 20 Zettabytes by 2021. This will propel the market demand to deliver high-energy efficiency and high bandwidth capacity for improved transmission in data centers.
 

Players cater to demands by innovating new technology solutions for high-performance computing and data centers. In March 2020, Ranovus Inc. launched the Odin platform, which includes a 100 GBPS silicon photonics engine. The new platform can deliver 50% power consumption reduction and a 75% cost reduction, thus delivering a power-efficient network solution. Furthermore, the rising trend to develop hyper-scale data centers in future, which includes a high-speed connection to transfer a large amount of data will further boost the market expansion.
 

Asia Pacific silicon photonics market is poised to expand at more than 35% CAGR till 2026 on account of the rising demand for high-speed internet networks and the penetration of mobile devices in India. This will increase the requirement of advanced infrastructure to support high-speed communications, creating an opportunity for the market.
 

The growing optoelectronics industry in China and an increase in data center equipment supply have led market participants to establish new facilities and increase their R&D activities, propelling the industry expansion.