Silicon Photonics Market – Business and Innovation Trends 2017-2024

Silicon Photonics Market Trends Growth Forecast
Research 2017-2024: Global Market Insights Inc.
Silicon photonics market players are required to develop their own computer-aided
design or computer-aided engineering software to develop these components, which
escalates the initial manufacturing costs. Thermal effect issues that hamper the
performance of devices coupled with high initial costs are further hampering the
industry growth. The availability of substitute technologies such as Vertical-Cavity
Surface Emitting Laser (VCSEL) that increases the data speed and improves the
efficiency is anticipated to hamper silicon photonics market growth. Furthermore,
VCSEL is available at a low cost, which makes it a preferred alternative for companies
that have severe budgetary constraints, primarily SMEs. The thermal dissipation within
the material makes silicon photonics ineffective for lasing applications.
Silicon Photonics Market size is expected to grow at a fast rate owing to the
advantages offered to the users such as lower power consumption and reduced
overall costs. These components allow devices to work at higher temperatures and
enable efficient electrical to optical conversion, thereby reducing the need for cooling.
This is a major factor anticipated to boost the silicon photonics market growth over the
forecast timespan. The industry is gaining impetus as it enables optical devices to be
manufactured at low costs using semiconductor fabrication procedures that are
integrated with electronic chips. The small size, cost-effectiveness, and its ability to
facilitate high-speed data transfer with the use of tiny optical components are projected
to propel the silicon photonics market growth over the coming years.
Increasing adoption in data centers is a major factor anticipated to drive the silicon
photonics market. High integration capabilities coupled with a high density of
interconnects are escalating their demand in data centers. These components enable
the chips to use light pulses instead of electrical signals to transfer data, enhancing
the processing speeds and cloud computing performance. There is a substantial
increase in the number of SMEs across the world facilitated by government support
initiatives such as Made in China 2025 and Make in India, fueling the demand for
sophisticated data storage requirements. Various organizations in emerging
economies are investing in enhancing the data centers, which is aiding the silicon
photonics market to gain traction during the forecast timeframe.
Rapid industrialization in emerging countries owing to the availability of low-cost
resources, such as labor and raw materials, is leading to the strong growth in the
number of businesses in emerging economies. This is placing a high focus on silicon
photonics market players developing data centers with enhanced features to satisfy
the increasing data requirements. Additionally, there is an increasing need for
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enhanced energy-efficient data storage techniques. Rising need for fast data transfer
speeds, the need for enhanced computational and processing capabilities, and the
increasing requirements for low-power consumption devices are anticipated to provide
attractive growth opportunities for the silicon photonics market.
The segmentation of the industry by product comprises transceivers, variable optical
attenuators, optical multiplexers, switches, optical cables, and sensors. The
transceivers segment is anticipated to dominate the silicon photonics market as these
are ideally suited for high-speed communication systems owing to the advantages
such as low power consumption and compact packaging. Transceiver modules have
a wide range of applications and are used for telecommunications, computing, and
data centers. The sensors segment is anticipated to witness a substantial growth
during the forecast timeframe owing to its ability to be compact in design and consume
low energies. These systems find applications in detecting trace gases in the
surroundings and for health and environmental monitoring.
The segmentation of the silicon photonics market by component comprises
photodetectors, modulators, and lasers. The market for laser components is projected
to grow at a high rate owing to their applications in data centers and
telecommunications. The use of lasers in silicon photonics ensures high optical power,
wide operating temperature range, and spectral purity. Increasing focus of companies,
such as Intel on hybrid silicon lasers, on the development of such technologies is
anticipated to boost the laser silicon photonics market.
By application segmentation, silicon photonics market includes telecommunications,
defense, medical & life sciences, military, data center & high-performance computing,
and sensing. The data center & high-performance computing segment is projected to
dominate the industry owing to the increase in data traffic and technological
advancements in data centers. There is a growth in the implementation of optics using
silicon photonics. The increasing investments in the improvement of data transmission
technologies and the high funding for the development of advanced defense
technologies are driving the demand in the defense and government sector.
Countries across Europe and North America are the principal markets for silicon
photonics market as there is a high level of advanced technology implementation in
these countries. For instance, in December 2017, the USD 10 million EU PASSION
project was initiated by 12 partners to develop photonic technologies supporting the
development of the future metropolitan communications network. Asia Pacific is
expected to witness the highest growth over the forecast time span owing to the
increase in the number of data centers. Emerging economies in Asia Pacific including
China, India, and Japan are concentrating on adopting advanced technologies in
electronics for the miniaturization of circuits and the reduction of energy consumption.
Key players in the silicon photonics market include Juniper, Hamamatsu,
STMicroelectronics, Intel, Cisco, Acacia, Broadcom, Finisar Corporation, IBM
Corporation, Mellanox Technologies, Texas Instruments, Teraxion, Oracle
Corporation, and 3S Photonics. The compatibility of the technology with the prevailing
fabrication techniques is making major players in the region to adopt silicon photonics
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technology. Increasing competition among major players to offer technologicallyadvanced
solutions is driving the silicon photonics market. In December 2017,
Globalfoundries announced a strategic partnership with Ayar Labs to develop silicon
technology solutions.
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