The photonic integrated circuit (PIC) market was $0.19bn in 2013 and is expected to increase at a compound annual growth rate (CAGR) of 25.3% from 2015 to $1.3bn in 2022, according to the new market report 'Photonic IC Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast, 2015 – 2022' published by Transparency Market Research.
The major factors driving the photonic IC market are the reductions in cost and size achieved by integrating different optical components (including detectors, modulators and lasers) into a single distinct package. In addition, benefits offered in terms of efficiency, transfer speed, transmission capacity and power consumption have ensured market penetration into varied end-use verticals such as metrology, aerospace and defense, healthcare, telecommunications, industrial, and data communication. The lack of digitization - coupled with design and packaging challenges related to the photonic integration - have inhibited the swift growth of photonic ICs. However, the commercialization of quantum computing (expected by 2018) is predicted to offer tremendous growth opportunities for the photonic IC market.
Three integration techniques deployed in photonic ICs include hybrid integration, monolithic integration, and module integration. Hybrid integration was the major integration technique used for photonic integration, accounting for 56.8% of global market revenue in 2013. Although it is expected to remain the major integration technique over the forecast period, monolithic integration is expected to exhibit the most rapid growth, at a CAGR of 26.5% during 2015–2022. On the other hand, the module integration technique is expected to see a fall in revenue due to its inferior integration capabilities compared with hybrid and monolithic integration.
Indium phosphide (InP) and silicon-on-insulator (SOI) collectively accounted for over half (60.9%) of market revenue in 2013. The dominance of InP is mainy due to its ability to integrate optoelectronic functions into an optical system chip monolithically. In addition, the benefits offered in terms of size, speed, energy efficiency, and cost of fabrication and packaging have further ensured its dominance. Among different PIC components, lasers accounted for the biggest share (29.3%) of PIC revenue in 2013. Optical amplifiers (which help to realize high-level photonic integration by compensating for optical losses from individual photonic elements) are expected to show the most rapid growth, at a CAGR of 26.6% over 2015-2022.
The largest application segment of the PIC market in 2013 was optical communications, accounting for over half (58.6%) of revenue. It is expected to remain the largest application segment over 2015-2022 as a result of increasing demand from data-center applications. Currently, the other major application segments are sensing and biophotonics, which collectively account for around one-third (35.5%) of revenue. Although the existing contribution from the optical signal processing segment is the smallest, it is expected to see healthy growth following the commercialization of quantum computing.
The largest PIC market by geographical region in 2013 was North America, followed by Europe and Asia-Pacific. Although North America is expected to remain the largest market up to 2022, Asia-Pacific is expected to see healthy growth, outpacing North America and Europe. The growth in Asia-Pacific can be attributed mainly to rising demand from data-center and biophotonics applications.
The global PIC market is highly fragmented and is characterized by the presence of a large number of players, notes the report. Some of the leading players in the market are listed as include Infinera Corp (USA), Alcatel-Lucent S.A. (France), Huawei Technologies Co Ltd (China), JDS Uniphase Corp (USA), Avago Technologies Ltd (Singapore), Intel Corp (USA), and NeoPhotonics Corp (USA).
