Photonic Integrated Circuit Market Size, Share & Trends Analysis Report By Material (III-V Material, Lithium Niobate, Silica-on-silicon), By Integration Process (Hybrid), By Application, By Region, And Segment Forecasts, 2025 - 2030

Photonic Integrated Circuit Market Trends

The global photonic integrated circuit market size was valued at USD 14.08 billion in 2024 and is projected to grow at a CAGR of 10.8% from 2025 to 2030. The growth of this market is primarily influenced by factors such as growing modern digital infrastructures, increasing demand for high-speed data communication, requirement of enhanced bandwidth for implementation of advanced network capabilities, and more. The emergence of 5G technology and network expansions of 5G are also expected to drive demand for the photonic integrated circuit market from 2025 to 2030.

One of the key growth drivers that stimulate increasing demand for photonic integrated circuits (PICs) is the superior capacities and performance of PICs compared to traditional integrated circuits (ICs). Its higher bandwidth capacities, efficient and faster performances, and increasing application in areas such as data centers, wireless communication, and devices such as smartphones, laptops, and others are also contributing to the growth of this market.

The technological superiority of PICs, which combine multiple optical components on a single chip, enables improved performance by reducing delays in signal processing. This makes them a preferred choice for real-time data transfer and analysis applications. In addition, the emergence and fast-paced network expansions of 5G technology are driving the demand for PICs, as low latency is a critical requirement for 5G networks.

As businesses and industries become more aware of energy efficiency and the significance of using energy-efficient products, materials, components, and devices, demand for PICs is expected to rise substantially. Designed to consume less power, PICs are proving to be more suitable options for settings such as modern data centers.

Material Insights

Based on materials, the III-V Material segment dominated the global photonic integrated circuit market industry with a revenue share of 33.2% in 2024. The growth of this segment is mainly influenced by factors such as unique material properties of III-V, higher mobility of electrons, enhanced efficiency in light absorption and emission, and improved thermal stability and conductivity. In addition, III-V material is preferred for its lower power consumption abilities over other materials.

The silica-on-silicon segment is expected to experience the fastest CAGR of 11.6% from 2025 to 2030 attributed to benefits offered by the material, such as cost-effectiveness, ease of integration with existing electronics, extraordinary optical properties, and more. In addition, its characteristics, such as scalability, improved data transfer capabilities, compatibility with CMOS technology, and others, are expected to generate an upsurge in demand for this segment.

Integration Process Insights

The hybrid integration segment dominated the global market for photonic integrated circuits in 2024. Some of the common techniques for hybrid integration include selective area growth, die-to-wafer bonding, flip-chip bonding, and others. Key benefits associated with the hybrid integration of PICs are enhanced design flexibility, cost efficiency, improved device performance, and reduced physical footprint. Its extensive use in application industries such as telecommunication, data centers, medical imaging, sensing technology, and others is expected to increase demand for this segment.

Monolithic integration segment is anticipated to experience the fastest CAGR from 2025 to 2030. The growth of this segment is mainly driven by its key features, such as single substrate fabrication, often silicon or silicon-on-insulator (SOI), reduced signal loss, improved device performances, cost efficiency, improved reliability, compact design, and others. It is widely used in the quantum computing industry. Growing demand for high-speed data communication is anticipated to increase demand for monolithic integration of PICs during the forecast period.

Application Insights

Based on application, the data centers segment accounted for the largest revenue share of the global market in 2024. This is attributed to the performance improvement capacities of photonic integrated circuits (PICs). PICs play a vital role in high-speed data transmissions by leveraging photos instead of electrons. In addition, their energy efficiency characteristic contributes to their growing use in data centers. Furthermore, PICs operate at lower temperatures and produce less heat, reducing cooling expenses. These aspects are expected to develop growth for this market.

The telecommunication sector is expected to experience the fastest CAGR of 11.6 % from 2025 to 2030. Photonic integrated circuits are increasingly used in the telecom industry to address the growing demand for high-speed data transmissions. Ease of integration with existing silicon-based electronic systems enables industry participants to enhance current infrastructure instead of spending more on a complete overhaul of the networks.

Regional Insights

North America photonic integrated circuit market held the largest revenue share of 38.5% in 2024. This is attributed to factors such as growing 5G networks in the region, the large number of data centers operating in North America, the growing demand for the biomedical sector, and the presence of multiple semiconductor market participants in the region. The growing use of PICs in data centers for achieving cost efficiency and high speed data transmissions is generating upsurge in demand for this market.

U.S. Photonic Integrated Circuit Market Trends

The U.S. photonic integrated circuit market dominated the regional industry with a revenue share of 83.6% in 2024. Advancements in the telecom industry, unceasing growth in demand for high-speed data transmission, the ongoing expansion of numerous data centers, and supportive regulatory scenarios encourage the innovation and research associated with photonic integrated circuits.

Europe Photonic Integrated Circuit Market Trends

Europe is identified as a lucrative region for the global photonic integrated circuit market in 2024. The rapid expansion of telecom networks in the region drives this market. Increasing the use of PICs in data centers also adds to the rising demand. The growing use of advanced technologies, connected devices, and internet-based applications has developed the need for enhanced communication networks and technologies. Factors such as expanding 5G networks and rising use of innovation-based technologies such as IoT-driven devices, autonomous cars, and cloud computing are expected to increase demand for photonic integrated circuits during the forecast period.

Germany photonic integrated circuit market is expected to experience significant growth from 2025 to 2030. This is attributed to numerous data centers in the country, growing demand for high-speed data transmission technologies, a strong focus of organizations and governments on the development and delivery of advanced photonic technologies, and ongoing digital transformation in various industries aimed at more efficient and integrated infrastructures and systems.

Asia Pacific Photonic Integrated Circuit Market Trends

Asia Pacific photonic integrated circuit market is expected to experience fastest CAGR of 12.1% from 2025 to 2030. This market is primarily driven by growing demand for high bandwidth communication solutions, significant advancements in optical technology, increasing demand from data centers, and rising integration of photonics with electronics. The rapid pace of digital transformations in the region and growing investments in communication infrastructure developments are also contributing to the growth of this market.

India photonic integrated circuit market is projected to grow substantially during forecast period. The use of photonic integrated circuits in advanced medical equipment, such as compact diagnostic tools, biosensors, and others, is expected to contribute to the growth of this market. Unprecedented growth in internet use, smartphone technology penetration, and demand for high-speed data transmissions have driven demand in this market.

Key Photonic Integrated Circuit Company Insights

Some of the key companies operating in the market are Lumentum Operations LLC, Coherent Corp., Cisco Systems Inc., Source Photonics, Infinera Corporation, Intel Corporation, and others. To address growing competition in the market, the key companies are adopting strategies such as innovation, enhanced focus on research and development, growing collaborations, and more.

Recent Developments

• In June 2024, Nokia, one of the prominent companies in the telecommunication and technology industry, and Infinera Corporation, a key player in the photonic integrated circuit market, declared a definitive agreement related to Infinera Corporation’s acquisition by Nokia.

Photonic Integrated Circuit Market Report Scope

Global Photonic Integrated Circuit Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global Photonic Integrated Circuit Market report based on material, integration process, application, and region:

• Material Outlook (Revenue, USD Billion, 2018 - 2030)

  • III-V Material  

  • Lithium Niobate

  • Silica-on-silicon

  • Others

• Integration Process Outlook (Revenue, USD Billion, 2018 - 2030)

  • Hybrid

  • Monolithic

• Application Outlook (Revenue, USD Billion, 2018 - 2030)

  • Telecommunications

  • Biomedical

  • Data Centers

  • Others

• Regional Outlook (Revenue, USD Billion, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Saudi Arabia

    • UAE

    • South Africa