Photonic integrated circuits (PICs) refers to integration of multiple photonic functions and components on a single semiconductor chip, to perform functions involving processing as well as transmitting optical signals. PICs provide advantages of miniaturization, reduced size and weight, improved efficiency and reliability over discrete components. There is growing need for high performance, compact optoelectronic devices for applications in data communication, telecommunication and sensing.
The global photonic IC market is estimated to be valued at US$ 3535.23 Mn in 2023 and is expected to exhibit a CAGR of 5.2% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The need for miniaturization of optoelectronic devices presents a key opportunity for the photonic IC market players. Integration of multiple photonic components on a single semiconductor chip enables miniaturization and creates compact devices. This helps in development of portable and hand-held devices. For instance, spectrometers, biochemical sensors and imagers developed using PIC technology significantly reduce the size and complexity of optoelectronic components. Miniaturization using PIC allows development of affordable and energy efficient optical systems for various consumer and industrial applications. Photonic IC offers the potential to integrate photonic and electronic functions altogether on a single chip, opening vast opportunities for advanced 5G communication networks and next generation computing platforms.
Porter’s Analysis
Threat of new entrants: The photonic IC market size requires high initial capital investments and technological expertise for innovation. This serves as a barrier for new players.
Bargaining power of buyers: The presence of established players with a diversified product portfolio gives buyers significant bargaining power in the market.
Bargaining power of suppliers: Major players controlling key raw materials like gallium-arsenide, indium phosphide exerts influence over the prices of these materials.
Threat of new substitutes: Although there exists alternative technologies for optical communication, photonic ICs have established themselves as a mainstream solution.
Competitive rivalry: Major players invest heavily in R&D to drive product innovation and gain market share through strategic collaborations.
SWOT Analysis
Strength: Photonic ICs enable higher bandwidth, lower power consumption and miniaturization of devices. Rapid adoption of 5G networks and datacenter applications drives demand.
Weakness: High dependency on few semiconductor raw materials that require specialized manufacturing. Design complexities and learning curves for new entrants.
Opportunity: Integration of photonic ICs with silicon photonics expected to unlock new application areas. Emerging verticals like LiDAR and quantum technologies offer scope for growth.
Threats: Economic slowdowns impacting capital investments. Stiff competition from alternative fiber-optic and wireless communication technologies.
Key Takeaways
The global photonic IC market is expected to witness high growth during the forecast period aided by the increasing requirement for bandwidth and improved connectivity. The global photonic IC market is estimated to be valued at US$ 3535.23 Mn in 2023 and is expected to exhibit a CAGR of 5.2% over the forecast period 2024 to 2031.
North America dominates currently due to large presence of major players and advanced applications. However, Asia Pacific is likely to grow at the fastest pace with increasing investments in digital infrastructure by countries like China and India.
Key players operating in the Photonic IC market are Cargill Inc.,Tate & Lyle PLC,Corbion N.V.,Firmenich SA,Sensient Technologies,Associated British Foods Plc.,Givaudan,Takasago International Corporation,Mane SA,International Flavors & Fragrances Inc. (IFF),Quest Nutrition LLC,Danisco A/S. Regional players are focusing on mergers and acquisitions to strengthen their footprints.
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