Impact Analysis of Covid-19

The complete version of the Report will include the impact of the COVID-19, and anticipated change on the future outlook of the industry, by taking into the account the political, economic, social, and technological parameters.

Market Overview

A photonic integrated circuit (IC) or also referred to as an integrated optical circuit is a device that integrates multiple photonic functions similar to an electronic integrated circuit. The main difference between electronic integrated circuits and photonic ICs lies in the type of raw material used for its fabrication. In electronic ICs, silicon is the primary and most dominant material used for fabrication so far, while in the case of PICs, the type of material used majorly depends upon the function/purpose of the device. Indium Phosphide, Gallium Arsenide, silica-on silicon, and silicon on insulator are the most common raw materials used for fabrication.

The global photonic IC market is estimated to account for US$ 17,075.67 Mn in terms of value by the end of 2027.

Market Dynamics- Drivers

  1. Decline in cost due to miniaturization is expected to drive growth of the global photonic IC market during the forecast period

Photonic ICs have emerged as a significant option for high-performance miniaturized and cost-effective optical systems, which is used in a vast number of applications. PICs, especially made from Indium Phosphide (InP) help designers and manufacturers to merge optical devices such as multiplexers, modulators, lasers, and more into a single unique package. This makes the overall system compact as well as cost-effective. Moreover, packaging reduction saves costs associated with individual testing of the components. Thus, miniaturization in the form of consolidation of several devices into a single platform leads to significant cost reduction. Therefore, these factors are expected to drive growth of the global photonic IC market during the forecast period.

  1. Growing application areas and increased functionalities are expected to propel the global photonic IC market growth over the forecast period

The increase in functionality as given by Moore’s law is best achieved by using Indium Phosphide as a substrate for photonic integration. This is majorly on account of its capability to support the incorporation of almost all functions essential in ICT applications. In addition, a set of building blocks including waveguide, phase shifter, amplifier detector, and polarization converter is available for Indium Phosphide and SOI platforms. These building blocks allow for the fabrication of several devices, thereby granting freedom to optical designers to architect almost any optical system. Recently, there has been a steep rise in the applications of PICs in the field of optical communications, sensing, and biophotonics. Since PICs use photons as the data carriers, they are able to transfer the bulk of data over a long distance at a very high speed as compared to electronic ICs. Therefore, these factors are expected to propel the global photonic IC market growth over the forecast period.

Statistics:

North America held dominant position in the global photonic IC market in 2019, accounting for 41.1% share in terms of value, followed by APAC, Europe, and RoW respectively

Figure 1: Global Photonic IC Market Share (%), in terms of Value, By Region, 2019

Photonic IC  | Coherent Market Insights

Market Dynamics- Restraints

  1. Lack of digitization is expected to restrain growth of the global photonic IC market during the forecast period

Digitization is essential for photonic integration to become an accepted technology platform for a wide range of product applications. Photonics is still at the analog stage while electronics utilizing analog transistors, actually use them in the digital format. The use of digital format allows a high level of integration of different devices/components into a single unit structure. In addition, as a result of their analog characteristics, PICs cumulate errors during cascading of devices. This results in signal distortion and requires regeneration. The full digitization of photonic ICs, due to traditional metrics in the semiconductor IC industry is expected to be a slow process. Therefore, these factors are expected to restrain growth of the global photonic IC market during the forecast period.

  1. Lack of standardization in the common fabrication and process techniques is expected to hamper the global photonic IC market growth over the forecast period

Although there is high demand for photonic ICs, lack of standardization is hindering its adoption. Such a lack of standardization in the common fabrication and process technique has retrained adoption. Therefore, these factors are expected to hamper the global photonic IC market growth in the near future.

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Photonic IC Market Report Coverage

Report Coverage Details
Base Year: 2019 Market Size in 2019: US$ 996.1 Mn
Historical Data for: 2016 to 2019 Forecast Period: 2020 to 2027
Forecast Period 2020 to 2027 CAGR: 42.6% 2027 Value Projection: US$ 17,075.6 Mn
Geographies covered:
  • North America: U.S., Canada
  • Latin America: Brazil, Argentina, Mexico, Rest of Latin America
  • Europe: Germany, U.K., Spain, France, Italy, Russia, Rest of Europe
  • Asia Pacific: China, India, Japan, Australia, South Korea, ASEAN, Rest of Asia Pacific
  • Middle East and Africa: GCC Countries, South Africa, Rest of Middle East and Africa
Segments covered:
  • By Components: Lasers, Modulators, Detectors, Attenuators, MUX/DEMUX, Optical Amplifiers.
  • By Integration Type: Monolithic Integration, Hybrid Integration, Module Integration.
  • By Raw Material: Indium Phosphide, Gallium Arsenide, Lithium Niobate, Silicon, Silica-on-Insulator, Others.
  • By Application: Optical communications, Sensing, Biophotonics, Optical signal processing.
Companies covered:

Agilent Technologies, Inc., Intel Corporation, Aifotec AG, Infinera Corporation, Alcatel-Lucent, Hewlett Packard, Avago Technologies, Finisar Corporation, Ciena Corporation, Enablence Technologies Inc., and Emcore Corporation.

Growth Drivers:
  • Growing application areas and increased functionalities
  • Decline in cost due to miniaturizatio
Restraints & Challenges:
  • Lack of standardization in the common fabrication and process techniques
  • Lack of digitization

Market Opportunities

  1. Advent of quantum computing can present lucrative growth opportunities in the global photonic IC market

The use of photons produced by diodes and lasers for the purpose of computation provides a sound opportunity for the growth of the PIC market. Quantum computing is expected to increase the speed of data processing and data transfer as compared to other computing devices on account of the use of photons. The concept of quantum computing, still in its infancy, exploits the traits of quantum mechanics to create more powerful computers. Furthermore, photons can travel long distances with little interaction, making them excellent tools for holding quantum information. However, since it is not easy to store and stop a photon, storing quantum information being held on photons is a critical issue. PICs make photon interactions possible, which in turn allows quantum processing to be performed.

  1. Mergers and acquisitions among market players can provide major business opportunities in the global photonic IC market

Key companies in the market focused on mergers and acquisitions, in order to enhance the market presence. For instance, in January 2013, Alcatel Lucent acquired Capella Photonics, Inc., a leading developer of Wavelength Selective Switch (WSS). In April 2013, Avago Technologies acquired CyOptics Inc., the leading manufacturer of indium phosphide optical chip and components for data and telecommunication. Moreover, in March 2010, Ciena Corporation acquired the Metro Ethernet division of Nortel.

Figure 2: Global Photonic IC Market Value (US$ Mn), 2017 - 2027

Photonic IC  | Coherent Market Insights

The global photonic IC market was valued at US$ 996.1 Mn in 2019 and is forecast to reach a value of US$ 17,075.6 Mn by 2027 at a CAGR of 42.6% between 2020 and 2027.

Market Trends

  1. Analog mode of photonic ICs

In the current scenario, PICs are essentially operating in analog mode. The use of coupled micro-cavity lasers is the solution for developing digital photonic circuits as they allow interactions in a way that supports low-power digital optical functions and possess signal regeneration properties. Thus digitization, although a slow process, is expected to not only reduce the complexity and size but also penetrate the use of photonic integration technologies in the coming years.

  1. Inorganic strategies such as joint ventures and partnerships are another key trend

Major market players are involved in partnerships and joint ventures, in order to gain a competitive edge in the market. For instance, in June 2012, Aifotec Ag entered into a strategic alliance with Focuz Manufacturing Co., Ltd.

Value Chain Analysis

Indium Phosphide (InP), Gallium Arsenide (GaAs), Silicon (Si), Lithium Niobate (LiNbO3), silica-on-silicon are the major raw materials used in the manufacture of photonic ICs. Raw material suppliers are the most important participant in the photonic IC value chain. These serve as a tier 1 supplier for photonic IC manufacturers. Photonic ICs are manufactured by the chemical processing of these raw materials. Manufacturers purchase the required basic raw materials from suppliers and manufacture photonic ICs according to the specifications laid by the equipment manufacturers. The fabrication of PICs involves building devices on a substrate using batch manufacturing processes such as photolithography, deposition and etching techniques. Several components are combined on a single substrate to fabricate multifunctional chips.

Global Photonic IC Market - Impact of Coronavirus (Covid-19) Pandemic

Due to Covid-19 pandemic, many industries witnessed significant shift in their business. There is significant impact on the growth of photonics IC market. As manufacturing operations are temporarily suspended across many countries to contain the coronavirus. Due to this situation, there is disruption in the supply chain and companies are shifting their production facilities from China. The overall consumer demand for semiconductor devices has also decreased. Owing to pandemic, the demand for these photonic integrated circuits is exacerbated by lockdown imposed in several countries.

Competitive Section

Major companies operating in the global photonic IC market are Agilent Technologies, Inc., Intel Corporation, Aifotec AG, Infinera Corporation, Alcatel-Lucent, Hewlett Packard, Avago Technologies Finisar Corporation, Ciena Corporation, Enablence Technologies Inc., and Emcore Corporation.

Key Developments

Major companies are focused on product launches, in order to expand the product portfolio. For instance, in April 2019, Intel Corporation launched its first 400GbE silicon photonics transceiver at Interconnect Day event.

Photonics integrated circuits is a breakthrough technology that uses photons as data carriers as compared to the electron that is used in electronic ICs. The main difference between electronic integrated circuits and photonic ICs lies in the type of raw material used for its fabrication. In electronic ICs, silicon is the primary and most dominant material used for fabrication so far, while in the case of PICs, the type of material used majorly depends upon the function/purpose of the device. This technology is used to transfer large amounts of data at a very high speed. This technology is widely used in applications such as optical fiber communication, sensing, and biophotonics.

 Market Dynamics

Rising deployment of data centers by major IT companies to manage large amounts of data and integration of cloud services is expected to drive market growth during the forecast period. Nowadays, most of the countries are moving towards on-soil data requirement where customer personally identifiable information (PII) data can’t leave the country, to meet this requirement all the IT companies across the globe are establishing data center in every country. For instance, Amazon Web Service, Inc., has invested US$ 1,500 million to establish two data centers in Hyderabad owing to increased demand for cloud services in India. This will create demand for high speed and efficient data transmission in data centers and will provide lucrative growth opportunities for photonic IC market.

Moreover, growing application areas and increased functionalities are also expected to drive market growth during the forecast period. The increase in functionality as given by Moore’s law is best achieved by using Indium Phosphide as a substrate for photonic integration. This is majorly on account of its capability to support the incorporation of almost all functions essential in ICT applications. In addition, a set of building blocks including waveguide, phase shifter, amplifier detector, and polarization converter is available for Indium Phosphide and SOI platforms. These building blocks allow the fabrication of several devices, thereby granting freedom to optical designers to architect almost any optical system. Recently, there has been a steep rise in the applications of PICs in the field of optical communications, sensing, and biophotonics. Since PICs use photons as the data carriers, they are able to transfer the bulk of data over a long distance at a very high speed as compared to electronic ICs.

Market Taxonomy

This report segments the global photonic IC market on the basis of components, integration type, raw material, application and region. On the basis of components Photonic IC market is segmented into lasers, modulators, detectors, attenuators, MUX/DEMUX, optical amplifiers. On the basis of integration type, the global Photonic IC market is segmented into monolithic integration, hybrid integration and module integration. On the basis of raw material, the global Photonic IC market is segmented into indium phosphide, gallium arsenide, lithium niobate, silicon, silica-on-insulator and others. On the basis of application, the global photonic IC market is segmented into optical communications, sensing, biophotonics and optical signal processing. On the basis of region, the global photonic IC market is segmented into North America, Europe, Asia Pacific, Latin America, Middle East and Africa.

Key features of the study:

  • This report provides an in-depth analysis of the global photonic IC market and provides market size (US$ million) and compound annual growth rate (CAGR %) for the forecast period (2020-2027), considering 2019 as the base year.
  • It elucidates potential revenue opportunities across different segments and explains attractive investment proposition matrix for this market
  • This study also provides key insights about market drivers, restraints, opportunities, new product launches or approval, regional outlook, and competitive strategy adopted by leading players
  • It profiles leading players in the global photonic IC market based on the following parameters – regulatory landscape, company overview, financial performance, product portfolio, geographical presence, distribution strategies, key developments and strategies, and future plans
  • Key companies covered in the global photonic IC market are Agilent Technologies, Inc., Intel Corporation, Aifotec AG, Infinera Corporation, Alcatel-Lucent, Hewlett Packard, Avago Technologies Finisar Corporation, Ciena Corporation, Enablence Technologies Inc., and Emcore Corporation.
  • The market players are focusing on strategic collaborations to innovate and launch new products to meet the increasing needs and requirements of consumers.
  • Insights from this report would allow marketers and management authorities of companies to make informed decision regarding future product launches, technology upgradation, market expansion, and marketing tactics
  • The global Photonic IC market report caters to various stakeholders in this industry including investors, suppliers, distributors, new entrants, and financial analysts
  • Stakeholders would have ease in decision-making through the various strategy matrices used in analyzing the global photonic IC market.

Detailed Segmentation:

  • Global Photonic IC Market, By Components:
    • Lasers
    • Modulators
    • Detectors
    • Attenuators
    • MUX/DEMUX
    • Optical Amplifiers
  • Global Photonic IC Market, By Integration Type:
    • Monolithic Integration
    • Hybrid Integration
    • Module Integration
  • Global Photonic IC Market, By Raw Material:
    • Indium Phosphide
    • Gallium Arsenide
    • Lithium Niobate
    • Silicon
    • Silica-on-Insulator
    • Others
  • Global Photonic IC Market, By Application:
    • Optical communications
    • Sensing
    • Biophotonics
    • Optical signal processing
  • Global Photonic IC Market, By Region:
    • North America
    • Europe
    • Asia Pacific
    • Middle East
    • Africa
  • Company Profiles
    • Agilent Technologies, Inc.*
      • Company Overview
      • Product Portfolio
      • Financial Performance
      • Key Strategies
      • Recent Developments
      • Future Plans
    • Intel Corporation
    • Aifotec AG
    • Infinera Corporation
    • Alcatel-Lucent
    • Hewlett Packard
    • Avago Technologies
    • Finisar Corporation
    • Ciena Corporation
    • Enablence Technologies Inc.
    • Emcore Corporation

 *Browse all the market data tables and figures on “Global Photonic IC Market- Forecast to 2027”

Table of Contents

  1. Research Objectives and Assumptions
    • Research Objectives
    • Assumptions
    • Abbreviations
  2. Market Purview
    • Report Description
      • Market Definition and Scope
    • Executive Summary
      • Market Snippet, By Components
      • Market Snippet, By Integration Type
      • Market Snippet, By Material Type
      • Market Snippet, By Application
      • Market Snippet, By Region
    • Coherent Opportunity Map (COM)
  3. Market Dynamics, Regulations, and Trends Analysis
    • Market Dynamics
      • Drivers
      • Restraints
      • Market Opportunities
    • Regulatory Scenario
    • Industry Trend
    • Merger and Acquisitions
    • New System Launch/Approval
  4. Impact of COVID-19 Pandemic on Photonic IC Market
    • Short Term and Long Term Impact, By Region
      • North America
      • Europe
      • Asia Pacific
      • Latin America
      • Middle East and Africa
  5. Global Photonic IC Market, By Components, 2017-2027 (US$ Million)
    • Introduction
      • Market Share Analysis, 2019 and 2027 (%)
      • Segment Trends
    • Laser
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Modulators
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Detectors
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Attenuators
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • MUX/ DEMUX
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Optical Amplifiers
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
  6. Global Photonic IC Market, By Integration Type, 2017-2027 (US$ Million)
    • Introduction
      • Market Share Analysis, 2019 and 2027 (%)
      • Segment Trends
    • Monolithic Integration
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Hybrid Integration
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Module Integration
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
  7. Global Photonic IC Market, By Raw Material, 2017-2027 (US$ Million)
    • Introduction
      • Market Share Analysis, 2019 and 2027 (%)
      • Segment Trends
    • Indium Phosphide
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Gallium Arsenide
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Lithium Niobate
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Silicon
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Silica-on-Insulator
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Others
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
  8. Global Photonic IC Market, Application, 2017-2027 (US$ Million)
    • Introduction
      • Market Share Analysis, 2019 and 2027 (%)
      • Segment Trends
    • Optical communications
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Sensing
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Biophotonics
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
    • Optical signal processing
      • Introduction
      • Market Size and Forecast, 2020–2027, (US$ Million)
  9. Global Photonic IC Market, By Region, 2017-2027  (US$ Million)
    • Introduction
      • Market Share Analysis, By Region, 2019 and 2027 (%)
    • North America
      • Regional Trends
      • Market Size and Forecast, By Components, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Integration Type, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Raw Material, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Application, 2020–2027 (US$ Million)
      • Market Share Analysis, By Country, 2019 and 2027 (%)
        • U.S.
        • Canada
    • Europe
      • Regional Trends
      • Market Size and Forecast, By Components, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Integration Type, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Raw Material, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Application, 2020–2027 (US$ Million)
      • Market Share Analysis, By Country, 2019 and 2027 (%)
        • U.K.
        • Germany
        • Italy
        • France
        • Russia
        • Rest of Europe
    • Asia Pacific
      • Regional Trends
      • Regional Trends
      • Market Size and Forecast, By Components, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Integration Type, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Raw Material, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Application, 2020–2027 (US$ Million)
      • Market Share Analysis, By Country, 2019 and 2027 (%)
        • India
        • Japan
        • ASEAN
        • Australia
        • South Korea
        • Rest of Asia Pacific
    • Latin America
      • Regional Trends
      • Market Size and Forecast, By Components, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Integration Type, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Raw Material, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Application, 2020–2027 (US$ Million)
      • Market Share Analysis, By Country, 2019 and 2027 (%)
        • Brazil
        • Argentina
        • Mexico
        • Rest of Latin America
    • Middle East and Africa
      • Regional Trends
      • Market Size and Forecast, By Components, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Integration Type, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Raw Material, 2020–2027 (US$ Million)
      • Market Size and Forecast, By Application, 2020–2027 (US$ Million)
      • Market Share Analysis, By Country, 2019 and 2027 (%)
        • GCC Countries
        • South Africa
        • Rest of the Middle East and Africa
  10. Competitive Landscape
    • Company Profiles
      • Agilent Technologies, Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Intel Corporation
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Aifotec AG
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Infinera Corporation
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Alcatel-Lucent
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Hewlett Packard
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Avago Technologies
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Finisar Corporation
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Ciena Corporation
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Enablence Technologies Inc.
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
      • Emcore Corporation
        • Company Overview
        • Product Portfolio
        • Financial Performance
        • Key Strategies
        • Recent Developments/Updates
  11. Section
    • References
    • Research Methodology
    • About Us and Sales Contact

*Browse XX market data tables and XX figures on “Global Photonic IC Market-forecast to 2027”.

Frequently Asked Questions

The global photonic IC market size was valued at US$ 996.1 million in 2019 and is estimated to exhibit a CAGR of 42.6 % between 2020 and 2027.
Laser segment held the major market share in 2019 owing to recent advancement in the technologies and allowed manufactures to design more innovative and robust products owing to its widespread use in drilling, welding, cutting, marking, and engraving.
Major factor driving the growth of global photonic IC market during the forecast period is growing application areas and increased functionalities.
Major factors hampering the growth of the photonic IC market during the forecast period constitutes presence of counterfeit products.
North America photonic IC market is expected to generate the highest revenue during the forecast period.
Some of the key players operating in the market are Agilent Technologies, Inc., Intel Corporation, Aifotec AG, Infinera Corporation, Alcatel-Lucent, Hewlett Packard, Avago Technologies Finisar Corporation, Ciena Corporation, Enablence Technologies Inc., and Emcore Corporation..
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