Photonic Integrated Circuit Market Size

Photonic Integrated Circuit Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The photonic integrated circuit (PIC) market is undergoing significant growth, with a current market value of $ 8.67 billion in 2024, and is expected to rise to $ 49.22 billion by 2035. This remarkable growth rate is projected to rise by a CAGR of 17.1% from 2025 to 2035, indicating a strong demand for photonics across multiple industries. This trend is mainly due to the growing demand for high-speed data transmission and the increasing popularity of optical communication systems. Also, the performance and cost of PICs are improving, and their application is becoming more and more widely available. Intel, IBM, and Cisco are among the key PIC players, and they are continuously expanding their product portfolio. The strategic initiatives, including mergers and acquisitions, joint ventures, and other forms of cooperation, are also very active. Among them, the collaboration between semiconductor manufacturers and telecommunications companies is a good example. This collaboration is aimed at integrating photonics solutions into the next-generation network, which will also drive the growth of the market. As the demand for data transmission speed and efficiency continue to increase, the PIC market will play an important role in the development of communication and information technology.

Regional Market Size

Regional Deep Dive

The photonic integrated circuit (PIC) market is growing rapidly in all regions of the world. The market is driven by developments in telecommunications, data centers, and consumer electronics. North America, with its strong technological base and high R&D spending, is the world leader in PIC innovation. Europe is focusing on energy efficiency and green technology, while Asia-Pacific is adopting PICs quickly, largely due to its strong electronics manufacturing industry. Middle East and Africa are gradually emerging as potential markets, driven by government initiatives to improve digital infrastructure. Latin America is still in its developing phase, but its telecommunications and technological industries are growing rapidly.

North America

• The U.S. government has started National Photonics Initiatives to promote research and development in photonics, which will enhance the collaboration between industry and the academy.
• Intel and IBM are investing in this technology, focusing on the application of quantum computing and high-speed data transmission.
• The regulatory framework is conducive to innovation, with policies that encourage the development of advanced manufacturing technology, thereby promoting the growth of PIC.

Europe

• The Horizon 2020 programme of the European Union allocates considerable funding for photonics, pointing out the importance of PICs for energy-efficient solutions and sustainable technology.
• ST and Nokia are leading the way in developing integrated photonic solutions for telecommunications which will enhance the performance of the European networks.
• In Europe, the regulatory framework is becoming more and more focused on energy efficiency, which is pushing companies to develop more energy-efficient products and could change the market.

Asia-Pacific

• Besides, the Chinese government has also included photonics in the “Made in China 2025” strategy, wishing to promote the domestic production of photonic integrated circuits, so as to reduce the dependence on foreign technology.
• This kind of chip is now being developed by Huawei and Samsung for use in 5G communications, which are expected to significantly improve the speed and reliability of data transmission.
• The region’s rapid urbanization and its growing need for fast Internet access are driving the adoption of PICs, making it a hotbed of innovation and market development.

MEA

• In countries like the United Arab Emirates, which are investing heavily in smart city projects, the demand for photonic integrated circuits is expected to rise.
• The establishment of research centres for photonics in collaboration with foreign universities is a sign of the local talent and the innovation in the PIC sector.
• The regulations are favorable to the development of digital transformation and the use of PICs.

Latin America

• Brazil has been making an important investment in telecommunications, and in the future it is expected that there will be a large demand for photonic integrated circuits.
• The photonics market is developing in a very promising way in India, with a number of local start-ups developing new applications for PICs in agriculture and health care.
• The state-run digital highways are an opportunity for the PIC to gain acceptance in the country.

Did You Know?

“PICs, or photonic integrated circuits, combine several photonic functions in a single chip. This can reduce the size and cost of optical systems by up to 90%.” — Photonics Industry Association

Segmental Market Size

The photonics industry is a fast-growing sector of the photonics industry. This is mainly driven by the increasing need for telecommunications, data centers and consumer devices. High-speed data transmission and the efficiency of optical communication systems are in great demand. The number of IoT devices is growing and the demand for energy-efficient data transmission and processing is growing.

PICs are now being widely used, and companies like Cisco and Intel are leading the way in integrating them into their products. In particular, North America and Europe are utilizing PICs in high-speed Internet and in advanced sensing technology. The current trend toward a sustainable economy and the need to reduce the energy consumption of electronic systems will further stimulate the market. In the future, hybrid integration and silicon photonics will play a key role in the development of smaller and more efficient devices.

Future Outlook

The market for photonic integrated circuits is expected to grow rapidly between 2024 and 2035, with an estimated annual growth rate of 17.1%. This growth is due to the growing demand for high-speed data transmission and the proliferation of data centers, resulting from the digital transformation of various industries. Industry 4.0 and the 5G network, as well as artificial intelligence and the Internet of Things, will be a major driver of the need for efficient and compact photonic solutions, leading to a higher penetration of photonics in telecommunications, consumer electronics and health.

“The trough is wide, the abyss is deep. But the abyss is empty. It is only the abyss which is empty.” The trough is wide, the abyss is empty. And the trough is broader, the abyss is deeper. It is expected that by 2035 the proportion of PICs in the entire semiconductor market will be considerable, and that their use in data centers and telecommunications will exceed thirty per cent., which will make them indispensable for the future of technology.