Market Trends of Photonic Integrated Circuit Industry
Growing Applications in Telecommunications and Data Centers to Drive the Market
- In telecommunication businesses and data centers, hybrid PICs offer a wide range of applications. The basic factor that has led to the increased adoption of hybrid PICs in the telecommunications and data center markets is their need for a higher transfer rate, which existing ICs cannot accommodate.
- The development of high-capacity networks and 5G have also contributed to an increase in speed. Through the development and widespread acceptance of transceivers and passive components, PIC technologies have emerged as a technology well-known within the telecommunications sector. Wireless and radio technology has become a focus of the development of 5G.
- However, photonics and fiber optics have been critical in transporting signals to and from the new generation of base stations.
- Moreover, many manufacturers are benefiting from the high degree of innovation that is allowing them to develop low-cost hybrid PIC hardware in line with their needs. In addition, an increasing number of cloud applications are rapidly upscaling the traffic that has to be handled by data centers (DC).
- According to the survey conducted by Uptime Institute on the data center industry, most operators employ a mix of strategies related to DC operations. With IT workloads spread across various services and data centers, Uptime shared that about one-third of all workloads shifted to the cloud, colocation, hosting, and Software-as-a-Service (SaaS) suppliers.
- As a matter of fact, according to Cisco, 92% of the workload in data centers will be cloud computing by 2022, which indicates that there is an important need for more advanced switching and data transfer devices available through hybrid PICs.
- Additionally, booming demand for larger bandwidth and strong adoption of cloud services by SMEs typically heightened amid COVID-19 boosted the demand for data centers. A growing trend of increasing switch data and transceiver data rates is driving PIC adoption.
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North America to Hold Major Market Share
- In North America, the demand for photonic integrated circuits (PIC)-based products is driven by data centers and fiber optic communication WAN applications. A growing need to transmit data at fast speeds has led to an increase in cloud computing traffic, and the rapid introduction of the Internet of photonics is likely to lead to a flourishing IC industry across the region.
- According to Cloudscene, the United States holds the highest number of data centers globally, i.e., almost 2,700, which is almost 33% of the world's.
- In addition, service providers must meet the growing demand for network capacity as mobile, video, and cloud services increasingly become an integral part of their business. In particular, it is expected that companies will base their optical networks on PICs, which may have a positive effect on the growth of the market. International companies working on PIC-based solutions for telecommunications challenges, including IBM Corporation, Intel Corporation, and Cisco Systems Inc., have worked together with academia, business, and government partners throughout the region.
- Public-private partnerships have forged national research consortiums for smaller enterprises, such as the American Institute for Manufacturing Integrated Photonics (AIM Photonics, Rochester, NY) in the United States, the Canadian Photonic Industry Consortium Florida Photonics Cluster, and the Ontario Photonics Industry Network.
- With increasing data rates and bandwidth requirements, companies have started to push for a shift toward PICs. PICs working with light and photons instead of electricity and electrons could offer higher bandwidth and efficiency, making them well-suited for future applications. PICs have been finding new ways to improve technology, like quantum computing.
- In Dec 2022, OpenLight unveiled an 800 G DR8 photonic integrated circuit to advance the global data center interconnect industry. OpenLight has fabricated and tested these wafers using the open silicon photonics foundry platform with integrated lasers offered by open silicon photonics foundry platform with integrated lasers offered by Tower Semiconductor.
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