May 29, 2024
Silicon Photonics Market

Silicon Photonics Market demand is accelerated by increasing adoption of data centers

Silicon photonics technology enables the transmission and processing of information using light signals on a silicon chip, instead of traditional copper cables. It helps to improve data transmission speed while reducing size, power consumption, and cost of hardware components. Optical interconnects made using silicon photonics play a vital role in networking equipment, high-performance computers, consumer electronics, and telecommunications infrastructure. The rising demand for data centers worldwide is a major driver fueling the adoption of silicon photonics technology. Data centers require transmission of huge volumes of data at very high speeds across servers and networks. Silicon photonic systems help in meeting these needs with minimal latency and power usage. The ability of silicon photonics to integrate optical and electronic components on a single chip also simplifies manufacturing and assembly processes for data center operators.

The global Silicon Photonics Market is estimated to be valued at US$ 1949.78 Mn in 2023 and is expected to exhibit a CAGR of 4.3% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
The increasing adoption of silicon photonics in 5G telecom infrastructure is a notable trend in the market. 5G networks require dense deployment of miniaturized base stations, cellular towers, and fiber optic cable networks to support exponentially higher data traffic. Silicon photonic transceivers that integrate lasers, modulators, detectors, and multiplexers on a single chip enable ultra-high bandwidth transmission over optical fiber at speeds of over 100 Gbps. This helps5G network carriers to overcome challenges such as backhaul congestion and meet data capacity demands from rapidly increasing number of connected devices. Advancements in manufacturing technology for mass production of low-cost silicon photonic integrated circuits is another key trend, as it allows wider integration of the technology across sectors.

Porter’s Analysis

Threat of new entrants: The threat of new entrants is moderate as manufacturing silicon photonic chips requires high capital investment in R&D and technology. However, some startups are able to penetrate the market with niche offerings.

Bargaining power of buyers: The bargaining power of buyers is moderate. There are a few number of dominant players who can influence pricing. However, the growing applications provide opportunities for innovative players.

Bargaining power of suppliers: The bargaining power of suppliers is low to moderate. Suppliers of raw materials have limited influence due to the availability of substitutes and accessibility of manufacturing technology.

Threat of new substitutes: The threat of substitutes is low as silicon photonics provides better optical integration and miniaturization advantages over traditional electronic and photonic solutions.

Competitive rivalry: The competition is intense as major players compete on performance improvement, new applications, and cost optimization.

Key Takeaways

The Global Silicon Photonics Market Size is expected to witness high growth. The global Silicon Photonics Market is estimated to be valued at US$ 1949.78 Mn in 2023 and is expected to exhibit a CAGR of 4.3% over the forecast period 2023 to 2030.

The Asia Pacific region currently dominates the market due to growing fiber optic communication networks and increasing investments in R&D by Chinese and Indian players. Countries like China, Japan, and South Korea are investing heavily in 5G infrastructure and telecom sectors which is driving the regional market. North America is another major market for silicon photonics attributed to wide technology adoption in data centers. The US holds a majority of the market share supported by the presence of global players. Moreover, increasing deployment of silicon photonics in applications like healthcare, industrial automation, and consumer electronics is propelling the regional demand.

Key players operating in the silicon photonics market 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. The market is consolidated in nature with these top players accounting for over 65% of the global revenue. Companies are focusing on product innovation through collaborative research and strategic partnerships.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it