EUR 4.25 Billion! Europe's Top Eight Integrated Photonics Companies Call For: Creating A Stronger Supply Chain

Recently, CEOs from eight of Europe's largest integrated photonics companies came together at the PIC Summit in Eindhoven to present a plan to build a more flexible and resilient European supply chain for photonic integrated circuits.
The plan calls for 4.25 billion euros in funding over eight years and makes a series of recommendations to make the European integrated optoelectronics industry a global leader with the ability to independently supply products to EU customers.
The eight largest European integrated optoelectronics companies are: XFAB (Germany/France), SMART Photonics (Netherlands), AIXTRON (Germany), PHIX Photonics Assembly (Netherlands), VLC Photonics (Spain), Almae (France), Ligentec (Switzerland/France), and PhotonDelta (Netherlands).
Photonic integrated circuits (PICs) open the door to making smaller, faster and more energy-efficient devices. They are already being used in a variety of innovative application scenarios, including telecommunications, datacom, medical technology, self-driving cars, quantum communications and agriculture.
The aforementioned plan has now been handed over to Thomas Skordas, Deputy Director General of the European Commission, Lucilla Sioli, Director of Artificial Intelligence and Digital Industries, and Werner Steinhogl, Head of the Microelectronics and Photonics Sector.The plan makes several recommendations, including:
- Providing more than €2 billion in incentives to foster the development of industrial-scale PIC manufacturing capabilities in Europe.
- Providing EU PIC SMEs with Industrial PIC Test and Experimentation Facilities (TEFs) that partly reflect the latest commercial wafer processing equipment and tools in line with relevant industry standard wafer sizes.
- Establishment of a €200 million Industrial PIC "Manufacturing Supply Chain" Resilience Fund to support the investments needed to strengthen linkages and reduce vulnerabilities.
- Provide funding of €360 million to stimulate application development by providing design portfolios to drive the creation of industrial photonic design IP and verification based on hardware testing.
- Promote and incentivize an ecosystem of collaboration between vertical clusters and European PICs.
The proposal outlines several practical steps that the EU can take over the next decade to ensure the continued growth and security of the integrated photonics industry.
"Overdependence on Asia"
The organization points out that the EU's low level of manufacturing capacity and overdependence on Asia threatens the EU's economic security and resilience. Currently, less than 6% of the manufacturing of Indium Phosphide and Silicon Nitride PICs is done in the EU, and less than 4% of global assembly, testing and packaging capacity is located in Europe. In addition, research from PhotonDelta, a Dutch photonics ecosystem, highlights that competing countries are making concerted efforts to acquire EU PIC technologies and assets, while seeking to take EU SMEs' shares from the EU PIC supply chain.

Fragile supply chains
Johan Feenstra, CEO of SMART Photonics, explains that the world has become more unstable and unpredictable over the past few years. "The global supply chain is fragile and over-reliance on one country for key components poses economic and security risks - this is especially true for the semiconductor industry. Photonic integrated circuits could transform many industries. It is also the basis for advancing some of the most exciting new technologies. Currently, the EU has a vibrant and growing integrated photonics industry; however, without mass production, testing and packaging capabilities, we are very vulnerable to global events and competitors' national policies."
Johan Feenstra added: "With just over €4 billion, we can build our supply chain and secure the future of an industry that could generate hundreds of billions of euros per year for decades to come."
EU Layout Heavyweights
In April this year and Photonics21 jointly introduced a report "Integrated Photonics White Paper on Integrated Photonics" (White Paper on Integrated Photonics), the EU has emphasized the importance of the layout of the photonics industry chain.
In fact, the EU has previously designated photonics technology as a strategic technology, and according to the 43 billion euros adopted in April this year, "Chip Act" will be listed as a potential area of funding, but it is not yet clear what resources have actually been invested in photonics technology.
In June this year, the EU also launched a €48 million, 3.5-year project to commercialize silicon photonics technology - photonixFAB. the project is led by silicon chip foundry X-FAB, Nokia, Nvidia, Ligentec, imec and CEA-Leti, among other major companies, will work to drive photonic product innovation while paving the way for high-volume production.
Summary
Earlier this year, a McKinsey report article "Imperatives for photonics companies in the next wave of growth" (Imperatives for photonics companies in the next wave of growth) shows that photonics-enabled systems and devices have gained widespread use among consumers, businesses and government organizations, and their related products have a The global market is valued at $1.4 trillion. By 2025, the photonics systems market is expected to grow to nearly $2 trillion. This growth is due to the development of raw materials as well as lasers, sensors, optics and other photonics components.
Thankfully, there are already many domestic and international manufacturers who are actively working on photonics technology today. Beyond technological advances, however, the transition from proof-of-principle prototypes to complete sets of concretely deployable applications will require urgent investment in and development of a sustainable photonics ecosystem that brings together interdisciplinary researchers, scientists and engineers, infrastructure and testbeds, as well as federal, academic and private partners. Programs such as the one described above, proposed by a consortium of eight European integrated photonics companies, will help to further improve the scalability of integrated photonics platforms and truly advance the integrated photonics industry.