PHOTONICS MARKET ANALYSIS

The global photonics market size was valued at USD 757.3 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 7.9% from 2023 to 2030. The Photonics Market is expected to grow during the forecast period. Its growth can be attributed to its growing applications in various sectors, such as information and communication technology, medical technology, solar energy, and security and defense. The market is also projected to experience strong growth due to the increase in demand for energy efficient lighting, data transmission and sensing technologies.

Global Photonics Market: Regional Insights

The global photonics market is regionally segmented into North America, Latin America, Europe, Asia Pacific, and Middle East & Africa.

North America is anticipated to witness significant growth in the global photonics market over the forecast period. This growth can be attributed to growing adjacent markets such as safety and protection applications, lighting, production technology, and healthcare. Moreover, strong growth of data center hardware market in the U.S. along with presence of various market players such as HP, Intel Corp., and IBM is also driving growth of the global photonics market in the region.

Moreover, Asia Pacific is also expected to show substantial growth in the global photonics market during the forecast period. This is due to frequent collaborations among market players, investments by major companies to boost their growth in Japan. Along with this, increasing growth of economy and electronics market share of China is also fueling the market growth. The manufacturing sector of this country is growing rapidly and is witnessing deployment of different telecommunications and manufacturing technologies. Thus, the region is expected to show strong growth in the global photonics market during the forecast period.

Figure 1: Global Photonics Market Share (%), By Region, 2022

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Global Photonics Market Drivers:

Emerging silicon-based photonics applications to boost the market pace

Silicon photonics is a branch of photonics that is evolving continuously, as it offers a clear benefit over electric conductors utilized in semiconductors that are used in the high-speed transmission systems. This technology will boost the speed of transmission up to 100 Gbps, with companies such as Intel, IBM, and Kothura that are achieving advancement with the use of this technology. Furthermore, due to this technology, the semiconductor industry is witnessing revolution, as it enables transfer and processing of data with high speed. Thus, this factor is expected to fuel growth of the global photonics market during the forecast period.

Rise in focus on eco-friendly solutions and high performance to drive the market growth

In current times, modern technological developments are occurring rarely without taking environmental impacts into consideration. Saving the planet has become an important factor in forging the direction of innovations in photonics technology, and on the opposite, photonics is impacting the environment significantly. Thus, the focus on finding environmentally-friendly solutions with high performance is increasing in the industry. This in turn is expected to drive growth of the global photonics market during the forecast period.

Global Photonics Market Opportunities:

The transition of photonics industry from conventional approach to modern approach is expected to create several growth opportunities in the global photonics market during the forecast period. The adoption of advanced technologies with emphasis on healthcare and data communication services is growing in photonics industry in order to ensure better operation levels. Thus, the industry is witnessing continuous innovations in manufacturing and product design, and it is likely to continue in the market in the coming future. Thus, the photonics market is likely to witness significant opportunities in the coming future.

Growing advancements in communication technology are likely to benefit the global photonics market with various growth opportunities over the forecast period. The rise in need for efficient and cross-industrial applications and advancing communication technologies are supporting growth of the market. The advancement in data communication and establishment of data centers aids in active application of transceivers and transmitters, with optical or photonic technologies in work behind the products. Thus, this in turn is creating several growth opportunities in the global photonics market during the forecast period.

Global Photonics Market Trends:

Growing importance of LiDAR technology is a major trend in the market

LiDAR technology in recent years has become important for autonomous driving, as it analyzes the distribution of gases and pollutants in the environment. Due to the technological developments in light-based technologies, the number of innovations are growing in the industry by providing eco-friendly solutions to global challenges. This in turn is driving the market growth. Moreover, with the wide use of laser in data center and telecommunications applications, the laser market IC is likely to grow. Some of the vendors are focused on implementation of technologies such as hybrid silicon laser, which in turn is likely to drive demand for photonics in the coming future. Thus, this trend is likely to boost growth of the global photonics market during the forecast period.

Rapid advancement in the IC semiconductor miniaturization is a growing trend

Along with the rapid technological developments in IC semiconductors miniaturization, the demand for X-ray science, imaging, photovoltaics, quantum optics, terahertz technology, optoelectronics, and organic optical communications is expected to increase significantly in the coming years. This is further anticipated to boost the need for photonics, which in turn is expected to drive growth of the global photonics market during the forecast period.

Global Photonics Market Restraints:

High cost of photonics-enabled devices to hinder the market growth

High initial cost associated with silicon-enabled devices and products compared to traditional products is hampering the use of this technology in multiple fields. The technology offers higher efficiency and performance, however, photonics-based devices are still inaccessible for a majority of small and medium sized end users in different sectors, owing to their limited budgets. Thus, this factor is expected to hamper growth of the global photonics market during the forecast period.

Stringent regulations regarding environmental impact to obstruct the efficiency of photonics products

Photonics products are normally environmentally-friendly; however, some of the chemicals used in the products to enhance its performance are hazardous to the environment. Chemicals like boron oxide and arsenic oxide are known to be toxic and regulatory bodies such as the RoHS and the REACH restrict use of these chemicals. Photonics products such as UV detectors and others make use of arsenic oxide. Thus, these regulations affected the performance of photonics products, which in turn is expected to impede growth of the global photonics market over the forecast period. However, market vendors are focused on finding completely eco-friendly solutions, which is likely to support the market growth.

Figure 2: Global Photonics Market Share (%), By Application, 2022

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Global Photonics Market Segmentation:

The global photonics market report is segmented into Application.

Based on Application, the market is segmented into Surveying and Detection, Production Technology, Data Communication, Image Capture and Display, Medical Technology, Lighting, and Other Applications (Traffic and Research). Out of which, Surveying and Detection is expected to dominate the global market over the forecast period and this is attributed to the development of novel products with advanced technology by market players. For instance, in November 2021, Yokowo introduced a miniature multimode fiber optic transceiver that simplifies the design of the Industry 4.0 vision applications. The Yokowo Type-B optical transceiver can be designed into the space-constrained applications that offers low power consumption of 150 mW.

Product Technology segment is also expected to witness significant growth in the near future and this is owing to the growing focus of high growth enterprises on boosting the efficiency of their facilities. For this enterprises are increasingly investing in different technologies, such as connected solutions and IoT. This is likely to drive growth of this segment in the near future.

Global Photonics Market: Key Developments

In May 2022, Hamamatsu Photonics announced the development of a technology that can upgrade the spatial resolution of two-photon excitation fluorescence microscopy. The new technology is ideal for high-precision observations of deep regions in biological samples.

In February 2022, Intel Corporation, announced the acquisition of Tower Semiconductor for US$ 5.4 billion. The company is expanding its manufacturing capabilities as a foundry and make an addition to its portfolio as a semiconductor manufacturer.

In April 2021, Finisar WSS announced that its first ever C+L Band Wavelength Selective Switch and Quad Wavelength Specific Switch with Flexgrid technology obtained high marks in the Optical Subsystems category during the 2021 Lightwave Innovation Reviews.

In February 2021, Finsar Corporation (II-VI INCORPORATED), introduced a miniature 1060 nm seed laser for fiber lasers in the processing of materials. The novel seed laser has a broadband spectrum of 1060 nm and it comes in a 3-pin miniature package.

Global Photonics Market: Key Companies Insights

The global photonics market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global photonics market are Carl Zeiss AG (Scantinel Photonics GmbH), Hamamatsu Photonics KK, Schott AG, Intel Corporation, Photonics SAS (Keopsys), Polatis Photonics Inc., Philips Photonics (Trumpf GmbH), Alcatel-Lucent SA, Osram Licht AG, Molex Inc. (Koch Industries), IPG Photonics, Infinera Corporation, Finisar Corporation, NEC Corporation, and Innolume GmbH.

*Definition:

Photonics is the technology of generating and harnessing light and other forms of radiant energy whose quantum unit is a photon. It involves cutting-edge uses of lasers, optics, fiber-optics and electro-optical devices in numerous fields of technology including aerospace, agriculture, biomedicine, construction, energy, information technology, chemicals, transportation, homeland security, solid state lighting and more.