The photonics market was valued at USD 773.64 billion in 2020, and is expected to reach a value of USD 1208.72 billion by 2026, at a CAGR of 7.96% over the forecast period (2021-2026)

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The trends in photonics, such as lidar or additive manufacturing are rising. Lidar technology has been used for decades to analyze the distribution of gases and pollutants in the atmosphere. It has become a crucial technology for autonomous driving in recent years.

New York, March 05, 2021 (GLOBE NEWSWIRE) -- announces the release of the report "Photonics Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)" -

- Silicon-based photonics application is the key driver for the photonics market. Hybrid silicon lasers (silicon and group III-V semiconductor) are used in telecommunications and data center applications, which gives the advantage of light-emitting properties of III-V semiconductor materials.
- Technological advancements in light-based technologies have been driving the new wave of innovation by providing sustainable solutions to global challenges, which has been identified as a major driving factor for the global market.
- However, due to the high cost of applications of photonics products, the market is expected to face challenges in the future.

Key Market Trends
Application of Silicon Photonics to Gain Market Share in Data Communication

- Silicon photonics is an evolving branch of photonics offering a clear advantage over electric conductors used in semiconductors, which are used in high-speed transmission systems.
- In data center applications, fiber-based optical interconnects can be used to provide point-to-point links, enabling high-bandwidth, inter-rack, data communications. However, due to the use of bulk optical components, high energy and cost are key disadvantages.
- The integration of silicon photonic devices can be used for high-bandwidth, multi-channel, wavelength division multiplexed with effective optical communication.
- The realization of an on-chip channelized spectrum monitor and a network-node-on-a-chip is a key example, where these optical integrated circuits are used to replace bulk optical components with their functional equivalents on monolithic silicon.
- 100G silicon photonic transceiver is gaining the market share, due to its high data speed data communication with future integration in 5G technology.
- Intel Corporation’s portfolio of 100G silicon photonics transceivers is optimized to meet the bandwidth requirements of next-generation communications infrastructure, while withstanding harsh environmental conditions.

Asia-Pacific Occupies the Major Market Share

- Asia-Pacific region occupies the most significant market because of the presence of emerging economies such as China and India. The availability of a cheap workforce coupled with favorable government initiatives is driving the market growth.
- For instance, China aims to become a global leader in manufacturing by 2025 through its initiative " Made in China 2025". Currently, China is a leader in manufacturing smartphones and other consumer electronics, such as flat panel displays and, lighting products. Thus, through this initiative, China aims to become the world’s "factory," and in return would have a positive impact on the market.
- Moreover, with the rising young workforce in countries such as India, there is an increase in disposable income which is another primary reason which is expected to drive the market. This is because the major vendors are expanding their footprint in the country through partnerships or mergers and acquisitions to gain a competitive advantage.
- For instance, Sansui Electric Co., Ltd in partnership with Jaina Group of New Delhi, announced establishing a manufacturing unit for television, washing machines, refrigerators, and air-conditioners in Gurgaon by June 2020. The group has entered into a 24-year licensing agreement and plans to invest INR 1,000 crore in the next three years. Such an initiative is expected to augment the market.
- Therefore, all the above factors are expected to drive the photonics market in the region.

Competitive Landscape
The photonics market is highly fragmented and the major players have used various strategies, such as expansions, new product launches, partnerships, agreements, joint ventures, and acquisitions, among others, to increase their footprints in this market. Key players in the market are Hamamatsu Photonics KK, Intel Corporation, Alcatel-Lucent SA, etc. Recent developments in the market are -
- Mar 2019 - Luna Innovations Incorporated announced that it has acquired General Photonics Corporation, a Chino, California-based leading provider of innovative components, modules, and test equipment that focus on the generation, measurement, and control of polarized light critical in fiber-optic-based applications. It brings a highly complementary product portfolio to the capabilities of Luna’s communications test products.
- Dec 2018 - Lumentum, a manufacturer of photonic products for optical networking and commercial laser customers, completed its acquisition of Oclaro. The combined scale, resources, talent, and breadth of technologies will help them to accelerate the innovation and development of products to their customers and network operators around the world.

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