Photonic Integrated Circuit Market Report 2025

The photonic integrated circuit market size has grown exponentially in recent years. It will grow from $12.4 billion in 2024 to $15.25 billion in 2025 at a compound annual growth rate (CAGR) of 23%. The growth in the historic period was driven by the growing miniaturization of electronic and photonic devices, the rising demand for scalable and compact communication systems, the increasing need for low-latency data transfer, the expanding adoption of IoT and connected devices, and the greater deployment of data-intensive applications.

The photonic integrated circuit market size is expected to see exponential growth in the next few years. It will grow to $34.48 billion in 2029 at a compound annual growth rate (CAGR) of 22.6%. The growth in the forecast period can be attributed to the rising demand for high-bandwidth communication, the increasing adoption of fiber optic technology, the global expansion of internet penetration, the growing use of photonics in telecommunications, and the heightened need for faster data transfer within enterprise networks. Key trends expected during this period include advancements in next-generation transceivers, the development of advanced indium phosphide photodiodes, innovations in silicon photonics platforms, the integration of photonic and electronic components, and progress in coherent optical modules.

The rising demand for high-speed internet is expected to drive the growth of the photonic integrated circuit market in the coming years. High-speed internet refers to broadband connections that provide fast data transmission, enabling quick downloads, smooth streaming, and efficient online communication. This demand is growing as individuals and businesses increasingly rely on data-heavy activities such as streaming, cloud computing, and remote work. Photonic integrated circuits (PICs) support high-speed internet by transmitting data with light instead of electricity, which allows for faster, more efficient, and higher-capacity communication across networks. For example, in July 2025, the Government of Canada, a federal administration, announced that by 2026, high-speed internet coverage in Canada is projected to reach 98% of the population, with full nationwide access expected by 2030. This expanding accessibility highlights how the demand for high-speed internet is fueling the adoption of photonic integrated circuits.

Companies in the photonic integrated circuit market are focusing on developing advanced solutions to improve high-speed optical communication and data transmission. A photonic integrated circuit is a device that combines multiple photonic functions, such as lasers, modulators, and detectors, onto a single chip to process and transmit light signals for communication and sensing applications. For instance, in March 2025, Keysight Technologies Inc., a US-based manufacturing company, introduced Photonic Designer, a comprehensive tool for designing and simulating photonic integrated circuits. The tool offers accurate physics-based simulations with real-world data integration, streamlining the circuit design process, reducing risks, and ensuring models are optimized for fabrication. This innovation enhances design efficiency and accelerates workflows from concept to production.

In June 2025, Pasqal SAS, a France-based quantum computing company, acquired Aeponyx Inc. for an undisclosed amount. This acquisition aims to strengthen Pasqal’s quantum computing hardware platform by enhancing qubit control precision and stability while accelerating scalability from hundreds to thousands of qubits. Aeponyx’s compact and efficient light-control chips will simplify optical setups, supporting Pasqal’s progress toward fault-tolerant quantum computing. Aeponyx Inc. is a Canada-based fabless semiconductor company that develops photonic integrated circuits.

Major players in the photonic integrated circuit market are Huawei Technologies Co. Ltd., Intel Corporation, IBM Corporation, Cisco Systems Inc., Fujitsu Limited, Nokia Corporation, Ciena Corporation, Coherent Corp., Ansys Inc., Lumentum Holdings Inc., Viavi Solutions Inc., Source Photonics Inc., POET Technologies Inc., Acacia Communications Inc., EFFECT Photonics B.V., Lightmatter Inc., ColorChip Ltd., LIGENTEC SA, AEPONYX Inc., Analog Photonics LLC, Bright Photonics BV, Dream Photonics Inc.

North America was the largest region in the photonic integrated circuit market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in photonic integrated circuit report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the photonic integrated circuit market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid rise in U.S. tariffs and the subsequent trade frictions in spring 2025 are having a major impact on the electrical and electronics sector, with semiconductors, display panels, and rare-earth metals (essential for batteries and motors) subject to steep duties. Consumer electronics brands face profit erosion, as competitive markets limit their ability to pass costs to buyers. Industrial electronics manufacturers, meanwhile, grapple with delayed projects due to shortages of tariff-impacted components like printed circuit boards. Companies are responding by relocating assembly to tariff-exempt countries, increasing inventory buffers, and redesigning products to reduce dependency on restricted materials.

A photonic integrated circuit (PIC) is a compact chip that combines multiple optical components onto a single substrate, using photons rather than electrons to transmit and process information. It enables the creation, manipulation, and detection of optical signals for use in telecommunications, data communications, and sensing.

The key component types of photonic integrated circuits include lasers, modulators, detectors, multiplexers or de-multiplexers, attenuators, and others. A laser (light amplification by stimulated emission of radiation) generates a highly focused, coherent, and monochromatic light beam by stimulating photon emission from energized atoms or molecules. PICs are produced using hybrid or monolithic integration methods, employing materials such as indium phosphide (InP), silicon-on-insulator (SOI), silicon photonics, gallium arsenide (GaAs), lithium niobate, and others. They are applied across domains such as optical communication, sensing, biophotonics, optical signal processing, and quantum computing, serving industries including telecommunications, data centers, consumer electronics, healthcare and life sciences, defense and aerospace, industrial, and automotive, among others.

The photonic integrated circuit market research report is one of a series of new reports that provides photonic integrated circuit market statistics, including photonic integrated circuit industry global market size, regional shares, competitors with a photonic integrated circuit market share, detailed photonic integrated circuit market segments, market trends and opportunities, and any further data you may need to thrive in the photonic integrated circuit industry. This photonic integrated circuit market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The photonic integrated circuit market consists of revenues earned by entities by providing services such as design and simulation services, prototyping and fabrication services, foundry services, system integration support services, and consulting and design optimization services. The market value includes the value of related goods sold by the service provider or included within the service offering. The photonic integrated circuit market consists of sales of photodetectors, wavelength division multiplexers, amplifiers (SOAs or EDFAs), integrated waveguides, and couplers and splitters. Values in this market are ‘factory gate’ values; that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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