Forecasts estimate the global photonic integrated circuit (PIC) market value will be USD$30.39 billion by 2028, increasing at a rate (CAGR) of 19.60% annually starting this year. Influenced by the activities of large corporations like Cisco, Arista, Nokia, Intel, Tower, Coherent, and NVIDIA, PIC technologies have captured the attention of startups, who are working to leverage them to advance products in a range of markets.
But the picture isn’t all positive. Technology and production challenges are obstacles, as detailed in this article, but perhaps even more, environmental and business concerns present increasing difficulties in fanning the flames of this emerging market.
Looking at the nontechnical landscape, the top issues facing the PIC market include:
1. Geopolitical challenges. There’s no question that today’s global business environment is feeling the impacts of the war in Ukraine, trade issues with China, and, now, the war in Israel. The Israel Innovation Authority just this year funded a consortium to focus on PIC solutions, but with the shift in the landscape and the war, they’re likely to put that work on hold.
2. Market volatility. For the PIC community, the rise and fall of the markets and their corresponding impacts extend beyond traditional economic uncertainty. Companies are struggling both in terms of public and private financing. There are doubts, for example, whether Europe will deliver open calls for the CHIPS Act pilot lines, which would impede innovation and slow development, further compounding problems.
3. Sustainability requirements. As global Environmental, Social, and Governance (ESG) requirements take shape and companies strive to decrease their carbon footprints, those initiatives will impact PIC production. Determining which materials to use and not to use, addressing the need for power savings in data communications, and supporting the greater good around energy efficiency continue to be both a battle cry and a problem. As McKinsey & Co. puts it, “The question now is whether supply chains can keep up with the pace of the energy transition. Materials shortages and production bottlenecks—and even land availability—all threaten to slow momentum.”
4. Materials integration. While materials border on a technical challenge, they also create business issues for companies seeking novel solutions. Obstacles like hybrid integration of new materials, ways of using linear drive optics, co-design of electronics and photonics, increasing the reliability of photonic devices, volume testing, integration of manufacturing processes to semiconductor fabs, and more do not just impact R&D but drastically impede time to market, and correspondingly, impact revenue.
While businesses must navigate these issues in any number of vertical markets, when combined with technical constraints, they become all the more dire. For the PIC community to continue to flourish, it will need to band together not only to solve the technological challenges, but also to rise above these business deterrents.
Fortunately, the PIC community has grown closer than ever. There are fewer discussions around competition and more alliances and collaboration—which is imperative in today’s environment. The community needs to connect to create short-term impact and ensure PIC solutions reach their full potential in the long term.
The Optica Executive Forum at OFC 2024, taking place March 25 in San Diego, will help further these collaborations and advance discussions. With a session specifically focused on market drivers, the event will encourage dialogue around real solutions critical to the community’s future.
With the potential for the PIC market, the industry can’t afford to sweep environmental and business issues under the rug. Explosive growth requires innovative thinking, and as the community assembles, the collective discussion will inspire the path forward. Because when great minds convene, solutions emerge. It’s up to you to ensure you don’t miss the opportunity to be part of the next steps.