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The photonics market size is forecast to increase by USD 321.9 billion, at a CAGR of 6.45% between 2023 and 2028. The market growth hinges on several critical factors, including advancements in lasers, optics, and fiber components, which drive innovation across various applications and industries. With a rising demand for high-speed communication and precise fiber optics sensors, the market is witnessing increased research and development activities. The market refers to the global industry related to the science and fiber laser technology of generating, manipulating, and neurophotonic, detecting light. The market is experiencing rapid growth and innovation across various sectors. Moreover, the emphasis on energy-efficient products like silicon photonics underscores the industry's commitment to sustainability. As telecommunications and electronics sectors continue to evolve, the global market remains at the forefront of innovation, offering scalable solutions for diverse technological needs.
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The market is experiencing significant growth due to the increasing adoption of light-based technology in various industries. In healthcare, photonics is revolutionizing non-invasive diagnostic methods through medical lasers, imaging solutions, and optical scanning systems. Lidar technology, using photonics, is essential for 5G deployment and autonomous vehicles. In information technology, fiber optic cables and spectroscopy are driving data center growth and quantum computing development. Photonics also plays a crucial role in energy production, biometric identification, and environmental monitoring. However, environmental regulations and concerns over toxic chemicals in semiconductor fabrication may hinder market growth. Military applications, 3D printing, and surveillance systems are other sectors benefiting from photonics technology. Overall, the market is expected to grow steadily, driven by the increasing demand for light-based technology in healthcare, information technology, energy, and various other industries.
One of the key factors driving the global market is the reduction in transmission costs and scalability beyond 400G. There is increasing adoption of the technology due to its benefits in communication network carriers. One of the main advantages of this network structure is that it facilitates communication network carriers to transmit data across several end-user establishments on a single wavelength and maintain their specific requirements.
As a result, there is a significant cost reduction in transmission as this technology does not require separate wavelengths for different clients, which ensures efficient bandwidth utilization. The main advantage is that it can offer high-capacity services at speeds of 100G and above. Hence, such benefits are expected to drive the global market size during the forecast period.
A key factor shaping the market is the emergence of optical data centers. The continuous demand in cloud-based applications and big data and analytics has revolutionized the scale of data center networks. Advanced data centers require large and efficient interconnection networks as they are made up of thousands of servers.
Moreover, WDM also known as optical wavelength division multiplexing has the ability to provide terabits of data transmission, and optical switching facilitates fast and low-energy switching, energy efficiency capabilities for intra-data center networks. Hence, it is widely used in such ultra-high-speed optical switch applications which is expected to drive the global market size during the forecast period.
The availability of substitute technologies is one of the key challenges hindering market penetration. Some of the main reasons which hinder the wide use include the availability of substitutes such as vertical-cavity surface-emitting lasers (VCSEL). VCSEL is a potential alternative to this technology which is widely used in fiber optic communications.
However, VSCEL is expected to negatively impact the market growth as it is set to revolutionize communication networks by enhancing efficiency and data transfer rates. One of the main advantages of VSCEL is that it can check for processing issues and material quality during the production process. Hence, such factors are expected to hinder the global market size during the forecast period.
The consumer electronics segment is estimated to witness significant growth during the forecast period. There is a significant increase in the growth of the consumer electronics segment due to the advances in the technology which led to a profitable, sustainable, and innovative future in electronics and lighting.
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The consumer electronics segment was the largest segment and was valued at USD 207.70 billion in 2018. Some of the main applications of this technology in the consumer electronics segment are high-resolution screens for smartphones, tablets, and TVs, leading the LED technology revolution, intelligent lighting solutions, and Lifi. One of the main applications of this technology in high-resolution screens for smartphones, tablets, and TVs segment is laser technology innovations, such as ultrafast lasers, which are critical to the continuous manufacturing and cost-effective production of these advanced consumer electronics. Additionally, this acts as an essential foundation in intelligent digital lighting solutions. Hence, such applications of this technology are expected to drive the growth of this segment which in turn will drive the global market size during the forecast period.
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North America is estimated to contribute 33% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional market trends and drivers that shape the market during the forecast period. One of the main factors contributing to the significant growth of the global market in North America is its well-developed and advanced telecommunications network system, which strengthens the regional telecommunications sector. Some of the key countries in North America that have a well-established telecommunication network include the US and Canada. For instance, while all other regions are trying to upgrade to 100G bandwidth, North America is focusing on developing a new system with 400G. Hence, such innovations in the telecommunication network infrastructure are expected to drive the global market growth in the region during the forecast period.
The market industry report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth and forecasting strategies.
Market Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market players, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The market is experiencing significant growth due to the increasing adoption of light-based technology in various industries, including healthcare, information technology, and telecommunications. In healthcare, photonics is revolutionizing non-invasive diagnostic methods through medical lasers, spectroscopy, and imaging solutions like Optical Coherence Tomography (OCT) scanning. In the IT sector, LIDAR technology, fiber optic cable, and photonic integrated circuits are driving advancements in 5G deployment, data traffic management, and cloud-based services. Technological advancements drive innovation in deep learning, computer vision, and natural language processing, enhancing data transmission and silicon photons devices. Moreover, the aerospace industry is leveraging photonics for machine vision technology, additive manufacturing processes, and biometric identification.
Also, the energy sector is also embracing photonics for energy efficiency and environmental considerations, while quantum computing and Hamamatsu Photonics are pushing the boundaries of photonics-based computing. The market is further expanding into women's health, biotechnology, biomedical engineering, and military applications. Environmental regulations and concerns over toxic chemicals in semiconductor fabrication are also fueling the demand for more eco-friendly photonic solutions. The market's growth is expected to continue, driven by the increasing demand for fiber optic technology, 5G network services, and the integration of photonics in various industries. Further, the market is expanding with applications in medical technology, life sciences, and defense operations. Celestial AI is enhancing non-invasive healthcare through advanced imaging systems and photonics-based devices. Key trends involve material waste reduction, economic growth, and competitive insights into broadcasting, detectors, and measurement.
Market Scope |
|
Report Coverage |
Details |
Page number |
176 |
Base year |
2023 |
Historic period |
2018 - 2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.45% |
Market growth 2024-2028 |
USD 321.9 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.72 |
Regional analysis |
North America, Europe, APAC, Middle East and Africa, and South America |
Performing market contribution |
North America at 33% |
Key countries |
US, China, and Japan |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
AIO Core Co. Ltd., ams OSRAM AG, Ayar Labs Inc., Carl Zeiss AG, Corning Inc., Hamamatsu Photonics KK, II VI Inc., Infinera Corp., Innolume GmbH, Intel Corp., International Business Machines Corp., IPG Photonics Corp., Koch Industries Inc., NKT Photonics AS, Nokia Corp., OSCPS Motion Sensing Inc, Polatis Inc., RANVOUS Inc., Sicoya GmbH, and TRUMPF SE Co. KG |
Market dynamics |
Parent market analysis, market trends and analysis, market growth analysis, Market forecasting, market growth and trends, market report, market forecast, market analysis and report, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements.
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Product
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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