2023 Silicon Photonics Outlook

Silicon Photonics: 42% CAGR, driven by data center (and M&A).

Silicon photonics is a platform for high-volume applications in data centers and telecommunications, benefiting from the performance of silicon processing with hybrid integration of photonic dies. More is coming, with photonic computing around the corner and multiple M&As to get access to the technology.

M&As between Silicon Photonics companies are increasing, the stopping of Intel’s acquisition of Tower (and subsequent agreement between Tower and Innolight paving the way for Chinese players into Silicon photonics), the sale of Intel’s photonics interests to Jabil, the acquisition of CloudLight by Lumentum… are all signs of the strategic importance of photonic integrated circuits.

SiPho provides a versatile platform for applications with high-volume demands. The most immediate domain for its application is in data centers, where Intel still holds a dominant position. Another high-volume application is telecommunications, as exemplified by Acacia, benefiting from the consistent and superior performance of silicon processing. A third broad application area encompasses optical LIDAR systems.

Intel remains the market leader in datacom with a 61% market share in both shipments and revenue, followed by Cisco, Broadcom… In telecom, Cisco (Acacia) has almost a 50% market share, followed by Lumentum (Neophotonics) and Marvel (Inphi).

Multiple developments are on the way: Various material platforms for photonic integration, such as thin film LiNbO3 (TFLN), SiN, BTO, GaAs, and more, have demonstrated their potential. In parallel to the new materials development, hybrid integration is key. By utilizing 3D bonding to connect the photonic integrated circuit (PIC) to electronics, which may operate at 3 nm or beyond, the strengths of both worlds can be combined.

Yole Group has multiple products covering the evolution of the SiPho industry, from market and technology analyses to reverse engineering of the most popular Sipho modules.

Co-packaged Optics for Datacenter 2023 cover

Co-packaged Optics for Datacenter 2023
Market and technology trends

VCSEL 2023
Market and technology trends