Photonics Market Analysis By Product (Waveguides, Optical Modulators, Optical Interconnects, LEDs, Wavelength Division Multiplexer Filters, Photo Detectors, Lasers, Amplifier), By Application (Consumer Electronics, Displays, Safety & Defense Technology), And Segment Forecasts, 2020 - 2024

Industry Insights

The global photonics market was valued at USD 758.46 billion in 2019 and is expected to expand at a compound annual growth rate (CAGR) of 5.5% from 2020 to 2024. The industry is anticipated to witness significant growth over the forecast period owing to photonics’ wide range of applications in the domains of medical sciences, jewelry, security, automotive, lighting, manufacturing, and information technology.

The development of optics has reached its zenith with highly advanced contemporary lasers gradually replacing traditional electric bulbs and primitive lamps. Advancements in optics have made rapid strides in the photonics-based field in the past few years and are further broadening the technological horizons.

Innovative photonic-enabled connected services and products are expected to be introduced and are expected to have positive impacts on organizational as well as consumer activities. The emergence of flat-screen displays and the increasing use of the photonic-enabled high-speed internet have considerably changed the dynamics of the market. Photonics is a Key Enabling Technology (KET) within the Information and Communications and Technology (ICT) vertical owing to its advantages and high economic growth across various industries.

The industry is characterized by the presence of considerable growth opportunities over the forecast period. An emerging trend in the industry is the commercialization of environment-friendly photonic-based renewable energy sources, such as solar cells. Although other developments, such as flexible PV-based on plastic electronics, offer lower efficiencies, they are anticipated to reduce the production cost, consequently leading to the mass use of solar cells on the exterior cladding of buildings, cars, and clothing.

However, high initial investments associated with photonic-enabled technologies are envisioned to challenge market growth in the near future. The high cost of technology has led to the slow adoption rates of photonics-based products among the general population. Moreover, technological obsolescence and rising demand for counterfeit technology are expected to challenge the market growth over the next eight years.

Photonics Market Trends

Photonics is a growing technology that transfers data among data centers by optical rays. It is able to carry far more data in lesser time and at a longer distances than electrical conductors. Photonics provides high-speed transfer of data at a lower price, using the techniques of standard semiconductor fabrication that are integrated with microelectronic chips. The low energy consumption feature of the technology is driving the demand for photonics for a wide range of applications. The need for high-speed transfer in data communication applications is expected to be the key factor driving the photonics market.

The usage and sharing of information and entertainment content are changing from local media hardware to distributed content with mobile and online access. Photonics technology encompasses the exclusive properties of optical communications, including the capability to superimpose various colors of light within a single optical fiber, in order to increase the data volume and transmission of high-speed data over large distances, while maintaining low energy consumption. The above-mentioned characteristics combine to enable rapid movement of data within data centers, servers, and supercomputers, in order to overcome the challenges of congested information traffic generated by next-generation interconnect technologies.

Photonics encompasses high risk of thermal effect. One of the most recognized hazards of photonic lasers is a retinal or corneal injury. Laser beams with longer wavelengths in the infra-red region (1400 to 10,000 nm) and short wavelength in the UV region (100 to 400 nm) of the electromagnetic spectrum are absorbed by the eye. Beams in the visible region (400 to 1400 nm) are absorbed by the retina. Light beams within these spectrums can be focused by the lenses on to the retina with magnification up to 10,000 times. This hazard caused by focusing of the beam onto the retina is termed as the thermal effect of photonics, which can cause severe damage to the body. Owing to the above-mentioned hazards, the thermal effects and risks associated with this effect are expected to challenge the market growth over the forecast period.

Product Insights

Products analyzed in the report include waveguides, optical modulators, optical interconnects, LEDs, Wavelength Division Multiplexer (WDM) filters, photodetectors, lasers, and amplifiers. WDM filters are envisioned to emerge as a predominant product segment over the forecast period on account of their advantages such as mass productivity, high port counts, and low loss. WDM filters are presumed to contribute significantly to the construction of contemporary photonic networks including optical cross-connect and optical add/drop multiplexing systems.

The demand for photodetectors is presumed to grow at a significant rate over the forecast period. Photodetectors are being increasingly used in various devices as they enable greater interaction in the machine environment interface. These devices are a low-volume and low-mass alternative for large traditional detectors and sensors.

High brightness LEDs are revolutionizing the lighting industry and are envisioned to drive the market for LEDs over the forecast period. The demand for high-brightness LEDs has grown over the past few years owing to their broad application base. An emerging trend in the segment is the integration of LEDs with television backlights and mobile phones to enhance their lighting, display, as well as energy efficiency. These products are critical for the further development of a low carbon economy.

Application Insights

Applications analyzed in the report include consumer electronics, displays, safety & defense technology, communication, metrology, sensing, medical & healthcare, and high-performance computing. The display segment is expected to retain its dominance throughout the forecast period owing to its broad application base, including biosources, discrete and integrated optical components, PV and solar cells, supercontinuum sources and laser, image sensors, optical fibers, and LEDs. The application of photonics-based components in displays provides enhanced energy efficiency and light beams by manipulating the flow of incident light source.

High-performance computing is relatively a new application of photonics and is not matured. The market is thus presumed to witness considerable growth over the forecast period owing to rising developments in the high-performance computing application segment. The growth in this segment can be attributed to a substantial increase in computational power over the last few years. The increasing amount of processed data coupled with the need for high computational speed is envisioned to drive the demand for photonic in high-performance computing over the forecast period.

Safety & defense is presumed to emerge as a key revenue-generating segment over the forecast period owing to the ability to gather intelligence, defend the population, and protect troops in the field. Photonic-enabled optical sensing technology provides enhanced reconnaissance and surveillance, and identification of nuclear, biological, and chemical threats. Photonics technology is being increasingly used in defense electronics to improve the accuracy of laser-guided weapons and provide lasers for critical missile defense capabilities.

Regional Insights

North America is envisioned to emerge as a predominant region over the forecast period owing to the increasing adoption of advanced next-generation technologies in the region. The growth in the U.S. can be attributed to increasing government funding in the R&D and applications of laser optics and photonic-enabled technology. Substantial investments from the U.S. government to work on the development of advanced lasers for military applications are presumed to drive industry growth over the forecast period.

The need for high-speed transfer in data communication application is expected to be the key factor driving the photonics market. The reduction in power loss, demand for high bandwidth, and availability at its cheap prices are presumed to drive the data communication application in various regions including in countries such as U.S. and Canada.

Europe is expected to grow at a considerable rate over the forecast period. Member states across the region have formed a long-term commitment to Public-Private Partnership (PPP) to lead to a competitive photonics industry in the region. The region is increasingly establishing pilot production facilities for research institutes and industries to work on the development of innovative photonics-based component production processes.

With the proliferation of the internet, cloud computing, and mobile devices, substantial growth in data production is unlikely to recede in the near future. These growing data demands are forcing network providers to seek new techniques to accommodate increasing data traffic by increasing bandwidth in Germany. Such trends are driving the growth of the market.

Key Companies & Market Share Insights

Key companies in the industry include Dunlop Boots, Honeywell Safety Products, JAL Group, Uvex Safety Group, Rock Fall, VF Corporation, Wolverine, Anbu Safety, and Hewats. Manufacturers are increasingly working on the development of low-cost, comfortable, static-dissipative, slip-resistant, lightweight, and durable safety shoes for use in industries. Companies are developing lightweight composites to minimize the problem of discomfort, such as heaviness and difficulty in walking, associated with traditional Polyvinyl Chloride (PVC).

Photonics Market Report Scope

Global Photonics Market Segmentation

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2024. For the purpose of this study, Grand View Research has segmented the global photonics market report on the basis of product, application, and region:

• Product Outlook (Revenue, USD Billion, 2015 - 2025)

  • Waveguides

  • Optical Modulators

  • Optical Interconnects

  • LEDs

  • Wavelength Division Multiplexer (WDM) Filters

  • Photo Detectors

  • Lasers

  • Amplifiers

• Application Outlook (Revenue, USD Billion, 2015 - 2025)

  • Consumer Electronics

  • Displays

  • Safety & Defense Technology

  • Communication

  • Metrology

  • Sensing

  • Medical & Healthcare

  • High-performance Computing

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)

  • North America

  • Europe

  • Asia Pacific

  • RoW