According to the market analysis, the photonic integrated circuit market is showing a significant growth trend, with the photonic integrated circuit market size of USD 15.11 billion in 2024 and is expected to reach USD 38.35 billion by 2029, growing at a CAGR of 20.47% during the forecast period (2024-2029).
According to ID TechEx report, PIC (Photonic Integrated Circuit) market CAGR will be driven by quantum, 5G, LIDAR, sensors such as biosensors and gas sensors and AI data communication applications will grow to 8%. Photonic integrated circuits are fast, adaptable to higher bandwidths, and highly energy efficient, characteristics that address some of the fundamental shortcomings of traditional ICs. The silicon photonics and PIC market is experiencing strong growth, driven by surging demand for AI and datacom transceivers. Major industry players such as Intel, Coherent, and Infinera have entered the market and are aggressively adopting PIC technology in their transceivers to meet the market demand for high-speed and efficient data transmission.
What are the PIC materials of the future?
There is a wide variety of future PIC materials, with most of the current market using silicon and dioxide-based PICs for light propagation. Emerging materials such as thin-film lithium niobate (TFLN) and barium titanate (BTO) show great potential for applications such as quantum systems and high-performance transceivers due to their unique properties such as low material loss. Single-crystal indium phosphide (InP) remains a major application material in future photonic integrated circuits due to its ability to detect and emit light.
Figure: Notable developments in photonic integrated circuits
Demand for Silicon Photonics and PICs for Artificial Intelligence
The increasing complexity of artificial intelligence and machine learning applications has led to the need for higher data transfer speeds and bandwidth between computing units. Silicon photonics is a key technology to meet this need due to its ability to enable high-speed data transfer at low power consumption. PICs, as a type of integrated circuit, while their traditional applications are more focused on interfacing with control and peripheral devices, also need to meet higher data transfer requirements as the interface part of data transfer in the overall architecture of AI systems. According to ID TechEx, NVIDIA's latest Blackwell requires approximately two 800G transceivers per CPU. the need for efficient, high-bandwidth communications is becoming increasingly important for AI, making silicon photonics and PICs an important part of the AI-driven future. the biggest driver of PIC transceiver development is AI, as higher-performance AI gas pedals will require higher performance transceivers, with 3.2Tbps transceivers expected by 2026.
What are the future applications?
As AI technology continues to develop and spread, more and more new application scenarios are emerging, such as autonomous driving and smart healthcare. These applications pose new challenges and demands on silicon photonics and PICs.
For example, automatic driving systems need to process a large amount of image and video data in real time, and have extremely high requirements for data transmission speed and bandwidth; smart medical systems need to ensure the accuracy and reliability of data transmission to ensure patient safety.
The silicon photonics and PIC markets are experiencing strong growth, driven by surging demand for AI and datacom transceivers. Key industry players such as Intel/Jabil, Coherent, and Infinera are actively using PICs in their transceivers. Chinese transceiver company, Asahi Chuang Technology, has achieved 1.6Tbps transmission speeds in its latest transceivers at the end of 2023, and is expected to start shipping them for data center applications in 2024. Coherent, which has its own InP fab facility, is also developing higher performance transceivers for 1.6T+ applications. According to IDTechEx's analysis, Intel Silicon Photonics may be acquired by the manufacturing company Jabil, which sold approximately 1.7 million PICs in 2023 and will continue to develop datacom and telecom transceivers. IDTechEx predicts that PIC technology will continue to dominate the high-performance transceiver market, further cementing its position as a key component of the modern technology landscape.
