Photonic integrated circuit market seen topping $36 billion by 2030

The global photonic integrated circuit market is forecast to grow at an 18.9% compound annual rate through 2030, according to The Business Research Company. Asia-Pacific and the U.S. are expected to lead demand as optical communication, data centers and AI-related infrastructure expand.

Why it matters: - Photonic integrated circuits are moving from a niche technology into a larger share of the semiconductor stack as demand rises for faster data transmission and lower-latency optical communications. - The market is projected to exceed $36 billion by 2030, making it a growing slice of a much larger electronics supply chain. - Growth in the sector could shape telecom networks, data centers, AI systems, sensing and quantum technology research.

What happened: - The Business Research Company released its Photonic Integrated Circuit Global Market Report 2026 – Market Size, Trends, And Forecast 2026-2035 on Oct. 16, 2026. - The report forecasts the photonic integrated circuit market will grow at an 18.9% CAGR through the forecast period. - The market is expected to reach more than $36 billion by 2030. - The report places photonic integrated circuits at about 4% of the semiconductor and related devices market by 2030. - The report also says the category will represent about 0.7% of the broader electrical and electronics industry by 2030. - More information

The details: - Asia-Pacific is forecast to be the largest regional market by 2030 at $15 billion, up from $6 billion in 2025. - Asia-Pacific growth is expected to run at a 20% CAGR, driven by high-speed optical communications, 5G and data center deployment, silicon photonics adoption, and investment in optical computing and quantum technology research. - China, Japan, South Korea and Taiwan remain core manufacturing hubs for the region. - The U.S. is projected to be the largest national market in 2030 at $8 billion, up from $3 billion in 2025. - U.S. growth is tied to investment in optical technologies for AI and high-performance computing, next-generation sensing and imaging, aerospace and defense uses, and research in integrated photonics and quantum communication. - Lasers are expected to be the largest component segment by 2030, accounting for 29% of the market, or $11 billion. - The report segments the market by lasers, modulators, detectors, multiplexers, optical amplifiers and other components. - The report also breaks the market down by material, including indium phosphide, silicon, lithium niobate, gallium arsenide and others. - Main applications include optical communication, sensing, biophotonics and optical signal processing. - Key end users include telecommunications, healthcare, data centers, defense and security. - The full report

Between the lines: - The report points to a market that is still fragmented, with the top 10 companies accounting for about 20% of revenue in 2025. - High fabrication complexity, heavy capital needs and strict performance requirements continue to limit concentration. - STMicroelectronics N.V. led the market in 2025 with a 6% share. - Other major players include GlobalFoundries, Coherent, Smart Photonics, MACOM Technology Solutions, Ayar Labs, Lightmatter, PsiQuantum, Sivers Semiconductors and DustPhotonics. - The competitive race is centered on silicon photonics, energy efficiency, scalability and faster integration into existing manufacturing flows. - A separate trend is the use of photonic electronic design automation tools to improve simulation, co-design and manufacturability. - In March 2025, Keysight Technologies launched a photonic designer tool in its advanced design system suite, with physics-driven simulation, real-world data integration and Process Design Kit compatibility.

What's next: - The report expects component growth through 2030 to be led by lasers, which are projected to add $6 billion. - Modulators are forecast to add $5 billion, while detectors and multiplexers are each expected to add $3 billion. - Optical amplifiers are projected to add $2 billion, and other components are expected to add $1 billion. - Companies are likely to keep investing in integrated photonics, AI design tools and optical data center infrastructure to improve yield and shorten time-to-market. - The report's 2026 edition also adds market attractiveness scoring, TAM analysis, company scoring matrices, dashboards and trend graphics.

The bottom line: - Photonic integrated circuits are shifting from an emerging technology to a core enabler of faster, more efficient optical systems across telecom, data centers and advanced computing.