Photonic integrated circuits (PICs)

Why the concentration exists

Three primary substrate materials dominate photonic chip production: silicon, indium phosphide, and silicon nitride. While III-V semiconductors can cover a wavelength range between 0.3 μm and 20 μm, they are associated with minimal yield and other suboptimal features when assessed against the Si/Si3N4/SiO2 PIC platform on silicon substrates. Silicon photonics enables fabrication of photonic components using standard semiconductor manufacturing processes, potentially reducing latency and increasing efficiency.[3][13][17]

Facilitating the efficient connection of III-V light sources with silicon photonic circuits poses a pivotal challenge in integrated optics. Crucial prerequisites for large-scale production include minimal coupling losses, a compact footprint, high assembly yield, and the capacity for automated processes. Large demand volumes are required to offset the initial cost of designing and manufacturing PICs, and production lead times can take months.[3][7]

What the evidence shows

Who supplies it

Leading manufacturers include Intel's silicon photonics division, Broadcom, Lumentum, and Cisco, alongside specialized companies across different platform technologies. Intel has shipped over 8 million photonic integrated circuits and more than 32 million on-chip lasers since launching its silicon photonics platform in 2016. In 2024, Intel moved its Integrated Photonics Solutions into its Data Center and Artificial Intelligence division as part of a restructuring plan.[4][9][14][16]

Coherent Corporation manufactures its own photonic integrated circuits in-house as part of a vertical integration strategy. InnoLight entered a partnership in 2023 with Tower Semiconductor to access a silicon photonics process platform called PH18 for photonic integrated circuits. GlobalFoundries partnered with Fabrinet in silicon photonics packaging in 2022.[12][21]

Sumitomo Electric Industries remains the global leader in the indium phosphide substrate market, using the vertical Bridgman crystal-growth method to supply high-quality substrates from 2 to 6 inches. Lightium AG is a Swiss startup offering PIC foundry and design services based on its proprietary, production-grade, thin-film lithium niobate platform. PHIX Photonics Assembly operates as an independent packaging foundry for integrated photonics, supplying optoelectronic modules and components in scalable manufacturing volumes.[1][5][11]

What it depends on, and what depends on it

The global PIC market was valued at USD 17.32 billion in 2025 and is projected to reach between USD 54 billion and USD 107.66 billion by 2035. Sales of lasers and PICs used in optical transceivers are expected to increase from USD 2.4 billion in 2023 to USD 5.9 billion in 2029. The integrated photonics industry expects demand to reach approximately 300 million photonic integrated circuits by 2030 and potentially 1 billion by 2040.[2][15][17][24]

Growing demand from artificial intelligence data centers, telecommunications, quantum computing, and sensing applications drives market expansion. Starting in March 2023, hyperscale data center clients including Google, Amazon, and Nvidia began ramping up demand for 800G transceivers, doubling the previous 400G generation. Silicon photonics is expected to capture 60% market share by 2030, serving as a foundational technology for both linear pluggable optics and co-packaged optics.[2][12][19]

Co-packaged optics technology in silicon photonics reduces costs, increases data transmission by over 8 times, provides more than 30 times the computing power, and saves 50% in power consumption. Nvidia's CPO switch optical engine consumes about 4-5W per 800G of bandwidth, a 73% reduction in power compared to an 800G DR4 optical transceiver consuming about 16-17W. A full transition to CPO in a GB300 NVL72 cluster on a three-layer network cuts transceiver power by 84% versus DSP optics.[8][10]

Where it sits in the stack

What would break it

Supply of critical optoelectronic chips such as electro-absorption modulated lasers and continuous-wave laser diodes remains tight due to capacity allocation constraints. Leading international players including Coherent, Lumentum, and Applied Optoelectronics, along with Taiwanese firms such as Elite Advanced Laser Corp and LuxNet Corp, have initiated capacity expansions and technology deployments to address the shortage.[22]

It is challenging to scale PICs toward future petabit per second capacity requirements. Scalability bottlenecks arise in terms of guiding materials, dense integration approaches, and wide-band optical sources. The number of photonic components integrated onto a single PIC has followed a trend similar to Moore's law in electronics with a delay of 25 to 30 years, now approaching as many as 10,000 components.[6][24]

China's advantage in silicon photonics could allow it to overtake the United States in emerging technology areas, according to a March 2023 assessment. Beijing-based firm Sintone is reported to be building a photonic chip production line that does not require extreme ultraviolet lithography machines subject to US-led export controls. CHIPX and Turing Quantum have developed a photonic chip packing more than 1,000 optical components onto a six-inch silicon wafer.[13][23]

What to watch

The world's first industrial wafer fab dedicated to 6-inch indium phosphide photonic chips broke ground in Eindhoven, the Netherlands, with total investment exceeding Euro 150 million. The fab is scheduled to enter full operation by 2028, with an expected annual production capacity of up to 10,000 wafers and 10 million photonic chips.[11]

TSMC's roadmap includes COUPE in pluggables in 2024 and COUPE on substrate in a CoWoS co-packaged optics solution in 2026. NVIDIA plans to launch a CPO-based optical interconnect platform in 2026, supporting both Ethernet and InfiniBand technologies. In 2026, 800G coherent pluggable modules are expected to become the standard optical connectivity solution for AI networks.[12][20]

Intel demonstrated the first fully integrated optical compute interconnect chiplet at the Optical Fiber Communication Conference on June 26, 2024. Next-generation 200G/lane PICs are under development to support emerging 800 Gbps and 1.6 Tbps applications. CHIPX launched China's first pilot production line for six-inch thin-film lithium niobate photonic wafers in June, capable of manufacturing about 12,000 wafers a year.[16][18][23]

Related nodes

Sources

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2. laserfocusworld.com
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4. photondelta.com · 2026-01-26T10:56:14
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