Silicon Photonics Market - Growth, Trends, Covid-19 Impact, And Forecasts (2021 - 2026)

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The silicon photonics market is expected to register a CAGR of over 18.68% during the forecast period (2021 - 2026). With the increasing trend of miniaturization of electronic devices coupled with the increasing need for efficiency and speed has led to an increase in the demand for the silicon photonics market.

- With the rise of cloud computing, there is an exponential increase in the data traffic, which has led to an increase in demand for the data centers globally. Owing to the high demand for high-speed data transmission in data centers is expected to fuel the market demand.
- For instance, in September 2018, Intel has unveiled details of its silicon photonics products that aims to optimize data transfer between computer chips via optical rays, providing 100 Gigabit-per-second connectivity for large-scale cloud and enterprise data centers. With such product portfolio, it is expected that it will influence the global silicon photonics market.
- Moreover, the rise in demand for live streaming and broadcasting which requires fast and reliable wireless connections is boosting the penetration of 5G globally. ...
... Thus, owing to the benefits such as the energy-efficient and high-speed performance, it is expected that it will replace the electrical switches. This will led to an increase in demand for the silicon photonics market.
- However, on the flip, few silicon photonics-based devices might have a thermal effect problem, which may hamper the performance of the devices and the high cost of integration of circuits are few factors which restraints the market to grow in the forecasted period.

Key Market Trends

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Data Centres is Expected to Register a Significant Growth

- By 2021, Cisco Systems estimates put that there will be 94% of cloud workload in the total data center workload while in 2017 it was limited to 86%. The adoption of cloud workload has been aiding the market growth because embedding silicon photonic functionalities are able to decrease its costs.
- Moreover, increasing investment by the vendors is also boosting the market growth. For instance, in January 2019, a San Francisco-based private investment firm, GI Partners, purchased two data centers properties from NTT Data. This enhances the extensive portfolio of data center and technology-intensive properties of the company. Such investments have a positive impact on the data center market which in return will further boost the silicon photonics market globally.
- Further, data communication is one of the major market shareholders of the silicon photonics because of the features such as they are capable of high-speed data transmission with utilizing less energy compared to traditional transmitters in data centers.

Asia- Pacific to Witness Fastest Growth

- Asia-Pacific is expected to witness the fastest growth owing to the growing demand for data transfer through the internet, is increasing through the adoption of 5G. Thus, the requirement for fast communication without any loss of signal is expected to drive the market in the region.
- Further, the increasing population coupled with the rising advancement in the technology in such a region has propelled the vendors to invest in the region to gain a competitive edge in the region. For instance, in January 2019, Oracle is planning to open its first data center in India with an intention to enhance its cloud offerings. This is return is expected to augment the market for the silicon photonics market.
- Moreover, with government initiatives such as MeghRaj, an Indian government initiative, to accelerate the delivery of e-services in the country while optimizing ICT spending of the government. Such an initiative is expected to impact positively on the market because of the benefits associated with silicon photonics.

Competitive Landscape

Many manufacturers are favoring the silicon photonics technology and are ready to invest in this technology to gain a competitive edge. Therefore, the silicon photonics market is highly competitive in nature because of the increasing number of players globally. Few prominent players operating in this market include Infinera Corporation, Intel Corporation, Acacia Communications, Inc, and Cisco Systems, Inc. Some of the recent developments are:

- March 2019 - Juniper Networks launched its 100G QSFP28 and 400G QSFP-DD devices, which leverages the silicon photonics expertise. The company also claims to reduce energy consumption by 20% through its above-mentioned products. This enhances the product portfolio of Juniper Networks.
- January 2019 - Cisco Systems acquired Luxtera Inc. With the acquisition of Luxtera Inc, the overall cost of deployment of a network would reduce and strengthen the position of the Cisco System.

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