by The silicon photonics market is in trends by increasing demand for high-speed internet connectivity. Silicon photonics technology utilizes silicon as the optical medium for near-infrared wavelengths, enabling development of photonic systems and circuits with significantly smaller footprints and lower production costs compared to other optical technologies. It allows incorporating photonic structures and electronic circuits on a single chip to create compact electro-optic devices. Silicon’s compatibility with complementary metal-oxide-semiconductor (CMOS) manufacturing processes facilitates mass production of these photonic devices.
The Global Silicon Photonics Market is estimated to be valued at US$ 2246.15 Mn in 2024 and is expected to exhibit a CAGR of 4.3% over the forecast period 2024 to 2030.
Key Takeaways
Key players operating in the Global Silicon Photonics Market Share are Knoll Inc., LLC., HNI Corporation, Herman Miller, Inc., Teknion Corporation, Kimball International Inc., Berco Designs, Kokuyo Co., Ltd., Haworth Inc., Okamura Corporation, and Steelcase Inc. These companies dominate the market with their wide product portfolios and strong geographical presence across major regions. Growing demand for high-speed internet connectivity from data centers, telecommunications, military, and healthcare sectors is fueling adoption of silicon photonics components. Modern data centers require optics that can keep pace with high-speed digital interfaces as optical communications move towards 400G, 1T, and above. Silicon photonics allows addressing this growing demand by offering greater bandwidth, lower power consumption, and smaller footprint components. Global expansion of the market is facilitated by increasing investments from technology giants like Intel, Microsoft and IBM in silicon photonics research. Companies are opening new R&D centers and foundries globally to scale photonic integrated circuit manufacturing.
Market Key Trends
One of the key trends gaining traction in the silicon photonics market is increasing deployment of silicon photonic transceivers for data center applications. They enable significantly higher throughput and bandwidth for next generation intra and inter data center connections. Companies are extensively working on developing optical engines, transceivers and switches based on silicon photonics to improve connectivity density and scalability of hyperscale cloud networks. Their cost benefits and design flexibility make them well suited for accelerating adoption of 400G, 1T and above networking infrastructures.
Porter’s Analysis
Threat of new entrants: High investment costs and economies of scale in manufacturing and research act as entry barriers for new companies.
Bargaining power of buyers: There are a few large buyers in the telecom and datacom industries which gives them higher bargaining power.
Bargaining power of suppliers: A few major component suppliers have major influence over pricing and supply of key materials like lasers and modulators which increases their bargaining power.
Threat of new substitutes: New technologies in electronic communications and data transmission are emerging as substitutes but silicon photonics still has significant advantage over range and bandwidth that substitutes cannot match.
Competitive rivalry: Industry players compete on technology innovation, design & performance differentiation and customer support which keeps the competition high to gain market share and customers.
Geographical regions with major market concentration in terms of value are North America and Europe due to high demand from telecom and datacom industries. Countries like the US, Canada, Germany, UK and France account for over 60% of the global silicon photonics market value currently.
The Asia Pacific region is the fastest growing geographical market for silicon photonics propelled by rapid expansion of telecommunication infrastructure, 5G deployments, and increasing investments by manufacturers in countries like China, India, Japan and South Korea. The APAC region is expected to surpass Europe as the second largest market during the forecast period.
