Photonics Market Size, Share & Industry Analysis, By Application (Displays, Information, Photovoltaics, Measure and Machine Vision, Medical Technology, Production Technology, Lighting, Communication, Defense and Security, and Optical Component), and Regional Forecast, 2024-2032

The global photonics market size was valued at USD 920.56 billion in 2023 and is projected to grow from USD 983.51 billion in 2024 to USD 1,642.61 billion by 2032 at a CAGR of 6.7% during the 2024-2032 period. Asia Pacific dominated the photonics market with a market share of 63.2% in 2023.

The global market will be driven by the increasing use of photonics-enabled devices in the healthcare, information and communication, and industrial production sectors throughout the projected period. Light-based technology breakthroughs have sparked a new wave of innovation by delivering long-term answers to global concerns, which have been regarded as significant growth drivers for the global market. These goods are becoming more popular and their usage has expanded significantly due to the long-term benefits offered by them.  

Furthermore, innovations, such as Lidar and additive manufacturing are on the rise, will drive the photonics market growth. For decades, Lidar technology has been used to study the distribution of gases and contaminants in the atmosphere. In recent years, it has become a critical technology for autonomous driving.

Although the pandemic hampered most of the industries, the outlook for the 3D printing market remains bright. This technology is an increasingly interesting area of ​​laser, optical scanning systems, and imaging solution applications. The 5G deployment in many nations may be delayed as a result of supply chain disruptions, while fiber optic cable costs may rise since fiber optic cable manufacturing countries such as China have been negatively impacted.

Photonics Market Trends

Increasing Usage of Photonics for Non-invasive Healthcare to Aid Market

Photonics technology has spread rapidly from physics to life sciences. Light and laser technology are used in many stages of medical and biological research. Spectroscopy enables in-depth study of biological components. From drug development and delivery to medical imaging and genomics to robotic guidance in surgery, everyone relies on medical lasers for success. Diagnosis is arguably the most seriously affected medical aspect that is altered by photonics. For example, OCT scanning is a modern invention that can detect various conditions that were previously problematic. The first and most affected area to benefit from OCT is ophthalmology. Eye scans using OCT can detect significant optical degradation of glaucoma, retinopathy, and other forms. Technology is essential for the diagnosis of new retinal disorders and is now an integral part of all modern optometry clinics.

Women's health examinations have made great strides with the product eliminating invasive and embracing treatment procedures. Even the invasive nature of basic female health procedures is a great deterrent to the early detection and diagnosis of serious fatal illnesses. From areas with wide access to women's care to poorly serviced people, all report that embarrassment and discomfort are important factors in deciding whether to seek treatment or go to the clinic. The wide variety of devices used in medicine is the direct result of collaboration between biotechnology, biomedical engineering, and photonics. These devices range from surgical guidance tools to biomarker detection and other therapeutic tools. Machine vision technology uses laser scanning to make automated equipment decisions. The most famous of these could be self-driving cars, manufacturing equipment, and other robotics.

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Photonics Market Growth Factors

Photonic Backbone of Additive Manufacturing to Drive Market Growth

Photonics is more than simply a foundation for beam formation and steering. The rising industrial maturity of technology is aided by laser beam diagnostics and precise performance measures based on photonics. Even little changes in the beam and scanning settings might result in severe quality losses throughout the building process, according to some background. New additive processes are constantly entering the market, leading to accelerated construction processes and increased material choices. At the same time, the number of user industries is increasing.

Meanwhile, automotive, aerospace, energy and chemical plant manufacturers, medical technology, food industry, and mechanical engineering rely on AM processes. In addition to prototypes and tools, they use additional processes to indirectly manufacture molds for axle housings and wheel hubs. It also produces very small quantities of increasingly complex vehicle components and uses process design freedom. A well-thought-out design may allow the assembly of many individual parts to be combined into a single component in a sandwich structure. This has reduced assembly work and certification, quality assurance, and warehousing work. In addition, the laser in the sandwich structure process exposes the metal powder only where the structure of the component is intended, significantly reducing the weight of the component and allowing new features to be integrated into the component. This can range from cooling channels to devices for optimizing lubrication supplies. The more specific the machine or vehicle, the more interesting it is to not store spare parts and print based on stored design data as needed. In Industry 4.0, additive manufacturing allows sensor-monitored mechanical parts to be pre-printed at the end of their useful life and proactively assembled before costly defects or machine failures during maintenance.

Growing Demand for Surveillance and Biometric Identification to Propel Market Growth

In recent years, the demand for safety and security systems has been increasing rapidly, and photonics technology has played a major role in meeting this demand. Photonics-based safety and security systems are used in various applications, including surveillance, biometric identification, and threat detection. These systems use a combination of sensors, cameras, and other advanced technologies to monitor and analyze the environment, detect potential threats, and respond quickly and effectively to any security breaches.

One of the key advantages of photonics-based safety and security systems is their ability to provide high levels of accuracy and reliability. For example, biometric identification systems that use photonics technology can accurately identify individuals based on their unique physical characteristics, such as fingerprints or facial features. Similarly, surveillance systems that use photonics technology can provide high-resolution images and video footage that can help identify potential threats and provide evidence in a security breach. Another advantage of photonics-based safety and security systems is their versatility. These systems can be used in various environments, from airports and government buildings to commercial businesses and residential properties. They can also be customized to meet the specific needs of different applications, such as monitoring large crowds or detecting intruders in remote areas.

RESTRAINING FACTORS

Stringent Environmental Regulations Against Few Raw Materials to Restrict Market Growth

Strict environmental laws are hampering the performance of photonics goods. Though most products are ecologically safe, a few compounds used to improve performance are deemed toxic to the environment. Toxic chemicals, such as arsenic oxide and boron oxide, are regulated by REACH and the RoHS. UV detectors, sensors, and other products include arsenic oxide. REACH is a European Union rule that governs chemical registration, evaluation, authorization, and limitation. Attributed to the potential effects on human health and the environment, it regulates the manufacture and use of chemical compounds, including arsenic oxide and boron oxide. RoHS limits or forbids the use of cadmium, lead, mercury, flame retardants, polybrominated biphenyls (PBB), polybrominated diphenyl ether (PBDE), and chromium VI in the manufacture of electrical and electronics. Photonics-enabled goods and services are high in cost. When compared to other items, photonics-enabled devices deliver superior performance and are more energy-efficient.

Photonics Market Segmentation Analysis

By Application Analysis

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Displays Segment to Dominate Market during Forecast Period

Based on application, the market is classified into displays, information, photovoltaics, measure and machine vision, medical technology, production technology, lighting, communication, defense and security, and optical component.

Displays held the major share of the market and are expected to maintain their dominance during the forecast period. In the industrial sector, photonic applications are mostly focused on laser-based microelectronic production, semiconductor fabrication, and metrology. Photolithography, metrology, laser-based equipment for flexible and high-density interconnects (HDIs), printed circuit boards (PCBs), through drilling, IC packaging applications, and display production and processing are examples of typical uses.

Lasers are used in mission-critical inertial navigation systems in the aerospace and military industries, such as ring laser gyroscopes for aerial and marine navigation and guidance systems for missile and UAV (drone) guidance. Photonics is especially important for sensing and imaging in difficult settings as part of military assets that are airborne, spaceborne, or on the ground. Fiber-based optical interconnects can be utilized to offer point-to-point connectivity in data center applications, enabling high-bandwidth, inter-rack data transmission. However, when bulk optical components are used, high energy and cost are major drawbacks.

REGIONAL INSIGHTS

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The market size in Asia Pacific stood at USD 581.75 billion in 2023. The market in Asia Pacific is anticipated to witness rapid growth owing to the region's first mover advantage and rising share in R&D and innovations. China, in particular, has been at the forefront of important innovations and advancements taking place in the field of photonics. Many of the leading companies are Chinese, with domestically based production facilities and a strong supply chain that exports photonics components across the world. China has a well-developed market and is expected to capture considerable photonics market share during the forecast period. Rising usage of this product in the development of faster and more efficient next-generation integrated electronics is expected to fuel market growth.

The market in North America is expected to be driven by the presence of tech giants, such as Facebook and Microsoft, who require optimization of data processing and transmission for their multiple data centers. Photonics can considerably improve high-speed data processing and transfer two important pillars of modern computing systems. Additionally, photon-based quantum computers can also operate at ambient temperature, providing them a considerable advantage over electron-based quantum computers, which require colder temperatures.

The Europe market is anticipated to expand significantly as a result of the European Commission's strong support for companies that manufacture these devices. The European Commission is assisting these companies in getting access to world-class technologies developed in Europe for the development of new and innovative products. It implies that companies will be able to take their ideas, scale them up, and validate them with the advanced, high-cost infrastructure and expertise required to manufacture innovative products. For instance, the European Photonics Industry Consortium, Europe's prominent nonprofit industry association, introduced some of the most significant EU acceleration initiatives to the widest possible audience of small and midsize enterprises.

The Latin America market is still in its early stages of development, but with government and private investor assistance, the region is likely to develop into a manufacturing hub during the forecast period. Lower manufacturing costs and a logistical advantage as an exporter to the U.S. and Canada are anticipated to aid in the development of this market. Market growth in the Middle East and Africa is likely to be sluggish due to the region's underdeveloped electronic and manufacturing sectors.

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List of Key Companies in Photonics Market

Strategic Planning Adopted by Companies to Strengthen Their Market Share

The market is extremely fragmented, and prominent companies have employed a variety of methods to expand their footprints in this market, including expansions, new product launches, collaborations, agreements, joint ventures, and acquisitions, among others. Hamamatsu Photonics KK, Intel Corporation, Alcatel-Lucent SA, and others are the market's major participants.

LIST OF KEY COMPANIES PROFILED

• TRUMPF (Ditzingen, Germany)


• Hamamatsu Photonics K.K. (Hamamatsu-city, Japan)


• IPG Photonics Corporation (Massachusetts, U.S.)


• Molex (Illinois, U.S.)


• Innolume (Dortmund, Germany)


• II-VI Incorporated (Pennsylvania, U.S.)


• NeoPhotonics Corporation (California, U.S.)


• One Silicon Chip Photonics Inc. (Montreal, Canada)


• NKT Photonics A/S (Birkerød, Denmark)


• AIO CORE (Tokyo, Japan)


• SICOYA GMBH (Berlin, Germany)


• RANOVUS (Ontario, Canada)

KEY INDUSTRY DEVELOPMENTS

• March 2024 – VLC Photonics, part of the Hitachi group, collaborated to offer design and test services using the OpenLight process design kit (PDK) for the development of photonic integrated circuits (PICs). This has expanded the capacity of designs OpenLight can support on the Tower Semiconductor PH18DA process, driving advancements across various applications and market segments in the silicon photonics industry.


• October 2023 – Montana Governor Greg Gianforte met with President Tsai Ing-wen and emphasized Taiwan's importance as a key partner in Montana's efforts to strengthen its photonics industry. Montana has a high concentration of optics, photonics, and quantum computing companies. Gianforte stressed the imperative nature of building the photonics industry in Montana, given the expected global growth to almost USD 2 trillion by 2025. He acknowledged Taiwan's expertise in this field as a valuable asset. By partnering with Taiwan, Montana can accelerate the growth of its photonics industry, creating new opportunities and driving economic growth.


• July 2023 – Celestial AI has raised USD 100 million for its Photonic Fabric technology platform in a series B funding round. The round was led by IAG Capital Partners, Koch Disruptive Technologies, and Temasek's Xora Innovation fund, with participation from Samsung Catalyst, Smart Global Holdings, Porsche Automobil Holding SE, The Engine Fund, ImecXpand, and M Ventures. The funding will enable Celestial AI to accelerate the development and commercialization of its platform, which offers a unique and compelling solution for high-speed, low-latency data transmission and processing.


• January 2021 – Machine learning benefits from development in light-carrying chips. Researchers at the University of Münster are developing innovative methodologies and process architectures to deal with these challenges in a highly efficient manner, in collaboration with an international team. They have now demonstrated that so-called photonic processors, in which data is processed using light, may process information even faster and in parallel, something that electronic chips are incapable of achieving.


• April 2019 – TRUMPF completed the acquisition of Philips' photonics division, which it announced in December 2018. Laser diodes from Philips Photonics are utilized in smartphones, digital data transmission applications, and sensors for autonomous driving. TRUMPF Photonics Components has been formed as a result of the acquisition. TRUMPF will get access to a new market segment as a result of the acquisition, which will complement its current high-power diode laser business.

REPORT COVERAGE

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The global market research report offers an exhaustive photonics market forecast analysis and emphases on critical factors such as major companies and products. Also, it offers insights into market trends and highlights vital industry developments. In addition to the factors mentioned above, the report encompasses various factors contributing to the market's growth in recent years. It further includes historical data & forecasts revenue growth at global, regional, and country levels and analyzes the industry's latest market dynamics and opportunities.

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