Surging Need for Data Centers Boosts Silicon Photonics Market

Posted by Pramod Arya on February 5th, 2024

The silicon photonics market was USD 1,212.5 million in 2022, which will increase to USD 8,475.1 million, advancing at a 27.5% CAGR, by 2030.

The growth of the industry is because of the surging need for data centers and high-performance computing, coupled with the following requirement for rapid data transmission.

The need for rapid transmission of digital data has progressed substantially over the last few years and will continuously increase. 5G deployment as well as other modern network technologies in different regions is gearing up and then, the demand for data storage and quicker access to the same is also increasing.

The transceivers category, on the basis of product, will advance at the fastest rate, of 30%, in the coming years. This is because developed network design needs cutting-edge optical transceivers, and these are produced with photonic integration circuit technology and are mainly employed in data centers.

Moreover, the switches category will be a significant contributor to the industry, advancing at a 27% CAGR, during this decade. This is mainly because of their increasing need in data centers. The switches assist in sending the data in these centers, therefore the use of silicon photonics for quicker transfers in such devices will significantly rise in the years to come.

The telecommunications category, on the basis of application, will be a significant contributor to the silicon photonics market, in the years to come. This is because of the employment of 5G network technologies in various regions for greater connectivity and effective data transfer requirements.

North America will be the largest contributor to the industry, with approximately 40% share, during this decade. This is because of the existence of developed production facilities and the robust R&D activities planned to enhance production and the whole effectiveness of silicon photonics.

APAC will advance at a significant compound annual growth rate, of 31%, in the coming years. This is because of the increasing acceptance of 5G networks and the rising count of government proposals for helping the semiconductor manufacturing sector by offering monetary assistance in this region.