Silicon photonics to become a multibillion dollar market, says Yole

November 14, 2016 // By Julien Happich
According to market research firm Yole Développements, Data centers with few other emerging applications will become a multibillion dollar market for silicon photonics by 2025. Yole's analysts have identified growing investments made by VCs and few startups have been created in this sector, all hinting that silicon photonic technologies have reached the tipping point that precedes massive growth.

Yole Développement shares its findings in its market report "Silicon Photonics for datacenters and other applications", where both experts Dr Eric Mounier, Sr Technnology & Market Analyst at Yole and Jean-Louis Malinge, former CEO of Kotura, now at ARCH Venture Partners combined their knowledge of the silicon photonic industry to perform a deep added-value analysis.

The silicon photonics market is still modest with estimated sales below US$40 million in 2015 and very few companies actually shipping products in the open market: Mellanox, Cisco, Luxtera, Intel, STMicroelectronics, Acacia and Molex are part of these leading players.
Silicon photonics has been under development for years. However now, this technology is being pushed hard by large webcom companies like Facebook and Microsoft.

“Silicon photonics has reached the tipping point that precedes massive growth”, notes Dr Eric Mounier from Yole. “Indeed we estimate, the packaged silicon photonics transceiver market will be worth US$6 billion in 10 years.”

Silicon photonics is an exciting technology mixing optics, CMOS technology and advanced packaging. This combination benefits from semiconductor wafer manufacturing scalability to reduce costs.

According to Yole, by 2020, silicon photonic chips will far exceed copper cabling capabilities. Such solutions will be so deployed in high-speed signal transmission systems. In 2025 and beyond, the technology will be more and more used in processing such as interconnecting multiple cores with processor chips. Yole’s analysts value this market to US$1.5 billion in 2025 at chip level.

Data centers are clearly the best opportunity for silicon photonics technology today. And there are also many other applications that silicon photonics can enable. These include high performance computers, telecommunications, sensors, life science, quantum computers and other high-end applications. Two emerging applications are also particularly interesting for silicon photonics.