Photonic Integrated Circuit (PIC) Market Size - By Integration Type, By Component, By Material, By Application, By End Use - Global Forecast, 2025 - 2034

Photonic Integrated Circuit Market Size

The global photonic integrated circuit market size was valued at USD 14.6 billion in 2024 and is estimated to grow at CAGR of 20.6% to reach USD 98.6 billion by 2034. The market is driven by expansion of artificial intelligence (AI) and machine learning (ML) applications and data centers and government and institutional investments in photonics research and infrastructure.
 

The key players in the photonic integrated circuit market relies heavily on global supply chain. Trump’s tariffs, which include exponential tariffs such as 125% on Chinese imports, 32% on Taiwanese goods, and a 10% baseline on most other imports cloud disrupt the whole supply chain. Many components and manufacturing tools required for photonic integrated circuits are set to face increased import costs into the U.S. raising production costs for U.S.-based PIC manufacturers like Intel or GlobalFoundries. This could slow domestic production ramps and delay projects like data center expansions, which heavily utilize photonic integrated circuits for high-speed optical interconnects.
 

However, companies like Infinera or Lumentum, which have U.S.-based operations, may benefit from this event, but photonic integrated circuits relies on specialized equipment and rare materials which means tariffs could increase the input cost effectively eroding the benefits of onshoring.
 

The development and application of AI and ML technologies has placed a new unprecedented demand for high-performance computing infrastructure. Ever-increasing workloads of AI applications, including chatbot and image generator, command super-computing capabilities. Conventional electronic components currently struggle with the bandwidth and energy efficiency needed to process AI workloads.
 

As an example, in April 2025, Lightmatter startup in Mountain View, California has developed photonics systems to improve the data flow speed of connections to AI chips. The company's products are an interposer and a “chiplet” to be delivered in 2025 and 2026 respectively and manufactured by GlobalFoundaries. Lightmatter uses optical connections, in combination with silicon photonics, to attain much improved performance.
 

In the same manner, Nvidia is applying silicon photonics into its networking systems to aid AI data centers. The company’s Quantum InfiniBand and Spectrum Ethernet switches now integrate photonics into the switch photonic ASICs. This innovation enables configurations of up to 1.6 Tbps per port, allowing millions of GPUs to be connected and reducing AI data center power consumption over 50% with improved resource management.
 

With a clear vision to advance in photonic technology, countries and institutions around the world have begun vigorously funding photonics research and infrastructure. The focus of these infrastructural developments is innovation, bolstering the domestic capabilities, and gaining an edge in the global market.
 

The European Union in November 2024 also announced funding of USD 142 million towards pilot production centers of photonic semiconductors in the Netherlands. The initiative looks beyond the borders to strengthen semiconductor production in Europe, more particularly on photonic chips that perform computations using light instead of electrons which are much faster and energy efficient. The development along with the universities and knowledge institutes will be supported by a broad range of industry partners.
 

Additionally, in February 2025, STMicroelectronics has partnered with Amazon Web Services (AWS) to introduce a novel photonics chip aimed at AI data center. This chip utilizes light o increase the speed and decrease power consumption in data transceivers. AWS intends to integrate this technology into its framework, which is set for volume production at ST’s factory located in Crolles, France.
 

Photonic Integrated Circuit Market Trends

• One of the key trends significantly is the use of AI and Machine Learning (ML) technologies are boosting the potential of PICs. Their combination enables real-time analytics and decision-making in the telecommunication and autonomous system fields. The strengthening of secure and efficient information flow in sophisticated networks further accelerates this. Research and Development spending is notably high in photonic technologies that are undergoing development such as photonic neural networks and advanced sensor technologies. This shift towards innovation is marking the beginnings of smart interconnected systems that will revolutionize industries and spawn novel business ventures.
   
• Applications of data centers still lead the market share of the PIC which is vast. This is augmented by the demand for rapid information transfer and growth of cloud computing infrastructure. Increased data traffic requires modern data processing solutions where PICs are key components in contemporary data centers. Strategic partnerships between industry leaders with continuous breakthroughs in innovations are driving this.
   
• Due to the significant impact of photonics, policies have been adopted and enacted by different countries and institutions to allocate finances towards researching and building infrastructure photonics. The reason for the European Union’s investment in Dutch photonic chip manufacturing plants is to increase the volume of semiconductor production and strategically position themselves in global competition. These kinds of investments lead to innovation and accelerates the use of photonic integrated circuits (PICs) in multiple domains.
   
• Technological developments of silicon photonics are very helpful to the PIC market. Businesses like Lightmatter are bringing new developments in photonics to strengthen the connectivity of AI chips by utilizing optical connections; hence, information will be transmitted via silicon photonics. These improvements will enhance the functionality of AI technologies, including chatbots and image generators, and market growth will follow.
   
• These trends illustrate the interdependent change of the PIC market that is driven by technological creativity, purposeful funding, and broader use in different fields of industry.
   

Photonic Integrated Circuit Market Analysis

Based on integration type, the market is divided into monolithic integration, hybrid integration and module integration.
 

• The monolithic integration market is valued at 5.2 billion in 2024. The term monolithic integration is associated with the fabrication of all the photonic components onto a single substrate like Indium Phosphide (InP). Through this approach, the interconnect losses are lowered which increases the speed and overall performance while reducing the cost and improving the reliability of the system. It is ideal for miniature transceivers that operate at high speeds, as well as optical processors.
   
• The hybrid integration held a significant market share of 42.2% in 2024. Hybrid integrates different components made from varying materials onto one platform. This means that the advantageous properties from each material can be utilized (InP lasers can be placed on a silicon photonics platform). This method offers flexibility in design and is exceptionally beneficial for coherent advanced applications such as coherent communication and high-density optical modules.  

Based on component, the photonic integrated circuit market is divided into lasers, modulators, photodetectors, waveguides, multiplexers/demultiplexers, attenuators, optical amplifiers and others.
 

• The lasers market is expected to reach over USD 21 billion by 2034. In terms of photonic integrated circuits (PICs), coherent light sources that are required for transmission and sensing would be the lasers, which have become their core elements. It's a common practice to integrate InP-based lasers into PICs due to their efficience and operational fit within optical communication systems. Currently, they are a necessity in data centers, telecom networks and LIDAR uses.
   
• The modulators market is valued at over USD 2.6 billion in 2024. In PICs, the optical signals are controlled using modulators which manipulate some attributes (amplitude, phase, frequency) of the signal. In the case of transmitting data, they are necessary so that the information is encoded logic in intended fashion. In modern communication systems, one of the most valued attributes of silicon photonics-based modulators is their diminutive size in conjunction with their efficiency, especially in relation to power consumption.
   

Based on material, the photonic integrated circuit market is divided into indium phosphide (InP), silicon-on-insulator (SOI), silicon photonics, gallium arsenide (GaAs), lithium niobate and others.
 

• The indium phosphide (InP) market is expected to reach over USD 24 billion by 2034. InP is important in PICs as it permits efficient light generation and modulation as well as detection at telecom wavelengths (~1550 nm). Because of its remarkable optical qualities, it is best suited for long haul optical communication and sensing systems because it monolithically integrates and supports advanced optical technologies.
   
• The silicon photonics market is valued at over USD 3 billion in 2024. Silicon photonics takes advantage of silicon substrates and employs existing CMOS processing technologies and integrates to fabricate photonic components. This strategy is beneficial in silicon integrated circuits (IC) for cloud and data center applications because it is highly scalable and cost-efficient and allows for the mass fabrication of integrated optical transceivers.
   

Based on application, the photonic integrated circuit market is divided into optical communication, sensing, biophotonics, optical signal processing, quantum computing and others.
 

• The optical communication market is expected to reach over USD 9.5 billion by 2034. This application enables data transfer using light traversing through an optical fiber. Using PICs in optical communications permits the construction of advanced telecommunication systems, underwater cables, and interconnects in hyperscale data centers, offering high-speed, small form factor, and energy-efficient transceivers.
   
• The quantum computing market is valued at over USD 1 billion in 2024. In quantum computing, optical PICs are employed to manipulate photons as qubits (quantum bits) for the processing and transmission of quantum information. Their compactness and scalability make them particularly attractive for realizing stable integrated quantum photonic processors.
   

Based on end-user, the market is divided into telecommunications, data centers, consumer electronics, healthcare & life sciences, defense & aerospace, industrial, automotive and others.
 

• The telecommunications market is expected to reach over USD 20.7 billion by 2034. PICs are transforming telecommunications by enabling the compactness and efficiency of optical transceivers within fiber optic networks. They facilitate the efficient long-haul, high-capacity, low-latency data transmission with minimal latency.
   
• The data centers market is valued at over USD 2.9 billion in 2024. PICs facilitate the expansion of hyperscale and enterprise data centers by supporting cloud computing and AI workloads through powerful and energy-efficient integrated optical engines. Unlike other technologies, PICs enable low latency interconnect.

The U.S. photonic integrated circuit market is projected to grow significantly, reaching over USD 25.4 billion by 2034. The U.S. achieves the highest share of the global PIC market due to a complete ecosystem comprised of tech corporations, research and development institutions along with high investments in silicon photonics. Leading companies like Intel, Cisco, and Rockley Photonics are the pioneers of innovation in data centers, optical communication, and healthcare diagnostics. In addition, federal funding from the National Photonics Initiative (NPI) also supports research and commercialization of PIC technologies in the fields of Defense, Aerospace, and Biomedical domains.  
 

Germany photonic integrated circuit market is expected to witness robust growth, with a CAGR of 21.6% by 2034. Germany has one of the most important and strongest European photonic technological hubs due to an existing industrial base and precision capabilities in engineering. The adoption of photonics in industrial automation and smart sensor systems is a by-product of Germany’s focus on Industry 4.0 and intelligent manufacturing. Public-private funded projects by BMBF have enabled company level collaboration with TRUMPF and various Fraunhofer institutes, boosting Germany’s market power in high-performance PIC applications.
 

The China photonic integrated circuit market is projected to grow significantly, reaching over USD 15.6 billion by 2034. The country is concentrating on increasing its 5G infrastructure and data centers expansion which creates a high demand for highly advanced and energy-efficient photonic components. China is rapidly emerging in the PIC market due to strong government support as well as aggressive investments in self-sufficiency in semiconductors. Leading domestic companies like Accelink and Hisense are scaling up PIC manufacturing and while research institutions are making progress in Indium Phosphide (InP) based integration, the entire industry is making strides.
 

Japan held a market size of USD 491 million in 2024. Japan has a well-established base in optoelectronics and photonics, courtesy of NTT, Fujitsu, and NEC. The ability of Japan in miniaturization as well as high-precision manufacturing is great for innovation PICs for communications, sensors, and medical diagnostics. Strategic METI (Ministry of Economy, Trade and Industry) programs are strengthening Japan's position in next generation photonics, especially in quantum technologies as well as silicon photonics.
 

South Korea photonic integrated circuit market is poised for significant growth, projected to reach over USD 3.9 billion by 2034. With a strong government push toward semiconductor and telecom leadership, South Korea is steadily growing in the PIC landscape. Major companies like Samsung and LG Innotek are working on phonic technologies for 6G, automotive LiDAR, and optical transceivers. The Ministry of Science and ICT has outlined specific R&D programs focused on photonic chip design and fabrication, which will greatly improve the position of South Korea as a leader in innovation in the PIC domain.
 

Photonic Integrated Circuit Market Share

The photonic integrated circuit (PIC) industry is highly competitive Intel Corporation, Infinera Corporation and Cisco Systems, Inc. are the top 3 companies accounting for a significant share of 23.7% in the market.  Players operating in the global Photonic Integrated Circuit (PIC) market focus on implementing various growth strategies to strengthen their product portfolio and expand their market presence. These strategies include new product developments & launches, strategic partnerships & collaborations, mergers & acquisitions, and advancements in AI-driven automation. Companies are heavily investing in next-generation robotics, collaborative robots (cobots), and intelligent automation solutions to enhance efficiency, precision, and adaptability across industries.
 

Photonic Integrated Circuit Market Companies

List of prominent players operating in the photonic integrated circuit (PIC) industry include:

• Intel Corporation
• Infinera Corporation
• Cisco Systems, Inc.
• Broadcom Inc.
   

Founded in 1968 and headquartered in Santa Clara, California, Intel Corporation is a leading designer and manufacturer of microprocessors and related technologies that power a vast array of computing devices. The company has been instrumental in advancing semiconductor technology, adhering to Moore's Law to drive innovation across personal computing, data centers, and artificial intelligence. In March 2025, Intel appointed Lip-Bu Tan as its new CEO, who emphasized a strategic shift towards revitalizing the company's engineering focus and fostering a startup-like culture to enhance innovation.
 

Established in 2000 and based in San Jose, California, Infinera Corporation specializes in optical networking equipment, offering solutions that enable high-capacity, scalable, and reliable transport networks. The company's portfolio includes products like the Infinera GX series and the Infinite Capacity Engine (ICE), leveraging its expertise in indium phosphide-based photonic integrated circuits (PICs). In November 2024, Infinera's vertically integrated approach allows for enhanced performance and cost efficiency in addressing the growing demand for bandwidth driven by cloud computing and video streaming services.
 

Photonic Integrated Circuit Industry News

• In March 2025, Government of India supporting photonic chip research for next gen computing. Ministry of Electronics and IT is supporting research in Photonic Integrated Circuits (PICs) based on various material platforms such as Silicon, Lithium Niobate, Diamond, Polymer or Composite and its packaging technology.
   
• In November 20234 The Public Authorities Board (PAB) of the Chips Joint Undertaking (Chips JU) had selected the consortium with which to start negotiations to establish the Advanced Photonic Integrated Circuits (PIC) Pilot Line for Europe - PIXEurope. This Pilot Line will be jointly funded by the European Union, through the Horizon Europe and Digital Europe Programmes, Participating States, and private organisations.
   

The photonic integrated circuit market research report includes an in-depth coverage of the industry with estimates and forecast in terms of revenue (USD Million & Units) from 2021 – 2034 for the following segments:

Click here to Buy Section of this Report

Market, By Integration Type

• Monolithic integration
• Hybrid integration
• Module integration

Market, By Component

• Lasers
• Modulators
• Photodetectors
• Waveguides
• Multiplexers/demultiplexers
• Attenuators
• Optical amplifiers
• Others

Market, By Material

• Indium Phosphide (InP)
• Silicon-on-Insulator (SOI)
• Silicon photonics
• Gallium Arsenide (GaAs)
• Lithium niobate
• Others

Market, By Application

• Optical communication
• Sensing
• Biophotonics
• Optical signal processing
• Quantum computing
• Others (e.g., LiDAR)

Market, By End Use

• Telecommunications
• Data centers
• Consumer electronics
• Healthcare & life sciences
• Defense & aerospace
• Industrial
• Automotive
• Others

The above information is provided for the following regions and countries:

• North America 
  • U.S.
  • Canada 
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Netherlands 
• Asia Pacific 
  • China
  • India
  • Japan
  • Australia
  • South Korea 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• Middle East and Africa
  • Saudi Arabia
  • South Africa
  • UAE