PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1927676
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1927676
Photonic Integrated Circuit market size was valued at US$ 14,234.54 Million in 2024, expanding at a CAGR of 10.78% from 2025 to 2032.
A Photonic Integrated Circuit (PIC) functions as a miniaturized optical circuit which combines multiple photonic capabilities including light generation and modulation and routing and amplification and detection onto a unified semiconductor chip. PICs transmit and process data through light (photons) because they do not use electrical signals like conventional integrated circuits which results in their ability to achieve extremely fast data transmission and minimal delay and lower energy usage. Photonic integrated circuits use silicon and indium phosphide and silicon nitride materials to create a unified platform which integrates multiple optical components into a single stable and scalable solution. The integration process decreases needs for space and financial resources and operational steps to handle equipment while providing better results and dependable operations, which makes PICs essential for high-speed data centers and telecommunications networks and LiDAR systems and optical sensing and upcoming technologies like quantum computing and biosensing.
Photonic Integrated Circuit Market- Market Dynamics
Exploding demand for high-speed data links
The photonic integrated circuit market experiences its primary growth because of rising requirements for high-speed data links which result from cloud computing and hyperscale data centers and artificial intelligence workloads and high-bandwidth internet services. Modern applications such as video streaming and AI model training and big data analytics and real-time communication require massive volumes of data to be transmitted quickly and reliably and with minimal energy consumption. Traditional electrical interconnects reach their maximum limits because they cannot handle higher-speed networks which require both better bandwidth and higher power efficiency and lower heat generation. The design of photonic integrated circuits enables ultra-fast optical data transmission through their combination of low latency and minimal power loss and their capability to create compact scalable systems. The 400G and 800G and terabit-class connections in data centers and telecom networks drive market growth by increasing PIC adoption which results in higher PIC usage.
By Application
The optical communication sensing segment is expected to dominate the market over the forecast period. Optical communication systems depend on photonic integrated circuits to satisfy the increasing need for faster data transmission and reduced response times and better energy-efficient solutions throughout telecommunications networks and hyperscale data centers. Integrated photonics provides service providers and cloud operators with compact power-efficient optical transceivers that work at 400 G 800 G and terabit-class links because they reduce the need for heavy power-consuming discrete optics. The use of photonic integrated circuits in environmental monitoring biomedical diagnostics autonomous vehicle LiDAR and industrial process control systems has expanded because these systems enable multiple optical functions to be integrated on one chip which provides high sensitivity and small size and strong operational capabilities. The need for high-speed optical communication systems together with various sensing system requirements has created new business opportunities for PICs which has led to increased revenue growth as manufacturers and network operators and system integrators spend money on advanced photonic systems that provide both high-speed performance and accurate results.
By Industry Vertical
The IT & telecommunication segment is expected to dominate the market over the forecast period. The continuous global data traffic growth from cloud computing and streaming services and artificial intelligence and mobile broadband expansion creates a demand for increased bandwidth and decreased power consumption and lower latency which traditional electrical interconnects cannot meet. The integration of various optical functions such as light generation and modulation and detection onto a single chip provides PICs with the capability to transmit optical data at high speeds while consuming less energy and enabling greater system expansion than separate optical components. The telecommunications industry relies on photonic integrated circuits to establish next-generation fiber-optic connections which link metropolitan areas with extended distance networks and provide connectivity for upcoming 5G and 6G mobile systems that need rapid high-quality optical connections. IT data centers now implement PIC-based transceivers and co-packaged optics technology to achieve 400 G and 800 G and terabit-class interconnects while decreasing power consumption and equipment size and boosting data transmission capacity. The market has grown through increased PIC technology deployment because IT operators need performance requirements that match the capabilities of photonic integration, which resulted in major financial growth for the market.
Photonic Integrated Circuit Market- Geographical Insights
North America is expected to dominate the photonic integrated circuit market during the forecast period. This situation exists because 5G networks are expanding throughout the region and North America has many operational data centers and the biomedical industry needs to grow and multiple semiconductor companies operate in the area. The market demand for this product rises because data centers increasingly adopt PICs which provide both cost savings and fast data transmission capabilities. Additionally, the increasing product launch and the presence of major company drives the market growth. For instance, in November 2025, NLM Photonics, a leader in silicon organic hybrid (SOH) electro-optic technology, announced that its patented SOH photonic chips, featuring Selerion-HTX(TM) and JRD1, have successfully arrived at the International Space Station (ISS) as part of NASA's Materials International Space Station Experiment (MISSE-21) mission aboard the JAXA's HTV-XI spacecraft launched on October 29, 2025.
The Photonic Integrated Circuit (PIC) market presents a competitive environment which features multiple established companies together with component manufacturers and photonic foundries and active startup businesses. High-volume transceivers and integrated photonics platforms find their market supply from major companies which include Intel and Cisco and the Broadcom-related companies and Infinera and Lumentum/Coherent and NeoPhotonics. The market for silicon-photonics manufacturing at foundries and fabs together with new foundry service providers has reached its peak because hyperscaler demand requires more output, which has initiated a trend toward vertical integration and strategic mergers and acquisitions. The market remains divided because multiple startups and niche companies compete with their distinct technologies, which include silicon and InP and SiN and hybrid, together with their proprietary packaging intellectual property. Recent acquisitions and foundry moves show consolidation and industrialization are accelerating as players race to secure design-to-volume supply chains for data-center, telecom and sensing customers, while regional strengths (notably strong activity in Asia-Pacific) influence where capacity and partnerships form.
In March 2025, Keysight Technologies, Inc. announced the launch of Photonic Designer, an innovative photonic design automation (PDA) software solution engineered to provide unparalleled accuracy and compliance-driven design validation. Designed for photonics design engineers, this solution enables streamlined workflows from concept to simulation, emulation, and manufacturing, addressing the challenges of fragmented tools, inconsistent simulation precision, and increasing compliance demands.
In January 2025, Aeluma, Inc., a semiconductor company specializing in high performance, scalable technologies for mobile, automotive, AI, defense and aerospace, communication and quantum computing, announced today that it has become a full industry member of the American Institute for Manufacturing Integrated Photonics (AIM Photonics).