The global photonics market was valued at $576.8 billion in 2019 and is projected to reach $1,214.5 billion by 2030, advancing at a CAGR of 6.9% during the forecast period (2020–2030). The lighting category is expected to grow fastest during the forecast period attributed to the growing demand for lighting solutions in applications like general lighting and backlighting across the globe, particularly in the U.S., China, Germany, and India.
In 2019, the optical component & system category held the largest share in the photonics market. This is due to the factors including growing demand for process automation among different industry verticals, increasing need for software like supervisory control and data acquisition (SCADA) in industrial automation, surging applications of cloud computing in the defense sector, and rise in telecom infrastructure investments across the globe.
Surging Industry 4.0 Revolution is a Major Market Opportunity
With the Industry 4.0 revolution, there has been an increasing demand for automation, internet of things (IoT), and smart sensors in the manufacturing industry. Innovations in Industry 4.0 rely heavily on new developments in laser technology, optical fibers, and sensor technology. Industry 4.0’s mission is to create smart, highly efficient factories where autonomous machines would automatically do all the work. Smart factories are a highly digitized and connected production facility that relies on smart manufacturing, wherein, smart manufacturing is an approach that utilizes internet-connected machinery in order to monitor the production process.
The role of photonics in smart factories are mainly in the areas of communication and manufacturing process. For instance, during manufacturing process, lasers are used for cutting, drilling, engraving purposes, whereas for communication purposes, optical fibers are used to enable reliable data communication at a high-speed within the factory. Thus, based on all these factors, Industry 4.0 revolution is expected to provide ample opportunities to the photonics market players during the forecast period.
High Cost Associated with Integration of Devices is Impacting the Market Growth
The technology is playing a significant role across several applications in the field of lighting and displays, optical data communications, manufacturing, medical & life sciences, security, and safety; it is due to the use of light energy which is faster than many conventional energies. For example, with increasing data traffic, the demand for high-speed transfer rate, data storage, processing, and data communications are exponentially rising across the globe. Photonics is used in the data communications field in order to meet the demand for a high data-transfer rate through the principle of photonics where light energy allows several wavelengths to be transferred simultaneously. However, with difficult operating environments (-40˚ to 85˚C, relative humidity (RH) up to 85%) in which the communication is establishing, it requires a high cost of system deployment and maintenance. Therefore, high cost associated with integration of devices is impacting the market growth.
Segmentation Analysis of Photonics Market
Geographical Analysis of Photonics Market
APAC held the largest share in the photonics market in 2019. Within APAC, China accounted for the largest share in the market in 2019. This is attributed to a large number of manufacturing industries in the country. For instance, the Eastern provinces of Fujian, Jiangsu, Zhejiang, and Shandong have a diverse manufacturing industry in the country. The auto parts manufacturing zones in the country are located in the Eastern region, mainly in Jiangsu, Hebei, Zhejiang, and Fujian provinces. With the presence of a large number of automotive production centers, demand for products like a laser for automotive manufacturing applications like brazing, cutting, marking, and coating removal is rising across the region.
In North America region, the U.S. held a larger share in 2019. Increasing government funding in the R&D and growing applications of laser optics are the major drivers to the growth of the U.S. photonics market. Programs such as the American Institute for Manufacturing Integrated Photonics (AIM Photonics), which works on the development of photonics related products is fueling the growth of the market. One of the biggest trends that have been exhibited in the country is the data centers have shifted from 10/40 Gbps modules to 100/400 Gbps modules to meet the growing demand for high data transfer rates. Fiber-optics carry different wavelengths of light at the same time, allowing for multiple communications to be carried out simultaneously. Thus, the need for a high-data transfer rate is increasing the demand for optical component & system.
Browse report overview with detailed TOC on "Photonics Market Research Report: By Product Type (LED, Laser, Sensor & Detector, Optical Component & System), Application (Display, IT, PV, Communication, Medical Technology & Life Science, Measurement & Image Processing, Lighting, Production Technology), End User (Industrial, Telecommunication, Consumer Electronics, Medical, Defense & Security) - Global Industry Size, Share and Growth Forecast to 2030" at:https://www.psmarketresearch.com/market-analysis/photonics-market
Competitive Landscape of Photonics Market
The photonics market is highly fragmented in nature, characterized by the presence of a large number of global and regional players. Major players in the market include Coherent Inc., IPG Photonics Corporation, Hamamatsu Photonics KK, II-VI Incorporated, and NeoPhotonics Corporation., which are focusing on product launches and other developments to increase their footprint in the market. For instance, in September 2019, NeoPhotonics Corporation introduced an Ultra-Narrow Linewidth Tunable C++ laser, which has a tuning range of 6 THz, covering the full "Super C-band". The C++ laser supports full gridless tuning and accommodates any channel spacing, including 50, 75, 100, 125, and 150 GHz.
Some of the other key players operating in the photonics market include Signify N.V., Lumentum Holdings Inc., Infinera Corporation, NEC Corporation, and Innolume GmbH.