The Bright Future of Photonics Market
The photonics technology market is incredibly diverse, with applications spanning across various industries. This makes determining the growth rate of the broad photonics market a challenging task. Nevertheless, multiple market trackers have collectively predicted a bright future for the photonics market, highlighting rapidly growing areas.
In January 2024, at the Photonics West exhibition's Global Business Forum, SPIE invited several analysts to assess the development of the photonics market. These analysts' reports help corporate executives judge the market environment, understand the driving factors behind market development, and formulate progressive corporate development strategies.
Firstly, Andy Brown, the Senior Director of Global Business Development at SPIE, shared SPIE's market forecast for 2024. Since 2012, SPIE has been tracking the revenue of core photonics devices using the same method. SPIE first identifies companies (nearly 5000) that produce these devices globally. Then, the actual income of the companies is determined based on the currency of the country where the company headquarters is located. Finally, the income is converted into dollars for global trend comparison. Brown pointed out that using a consistent method helps achieve more accurate year-on-year comparisons.
SPIE's revenue forecast for 2024 ranges between 360 billion dollars (a 2.5% decrease from 2022's actual income) and 401 billion dollars (an 8.9% increase from 2022's actual income). "On the same chart, this is both optimistic and pessimistic," Brown explained. They finally decided to "adopt a medium income forecast of about 379 billion dollars, which is about a 3% increase from 2022."
Brown pointed out that SPIE's forecast is based on data collected in the fall of 2023. "Of course, since last fall, our world has changed a lot, some of which are unfortunate," he added. In the long run, the compound annual growth rate of the photonics market will reach 7% over the next 12 years.
Furthermore, Brown also shared SPIE's analysis of the sub-markets supported by photonics devices, including consumption, defense, biomedicine, and other fields. It is the demand in these application fields that ensures the stable growth of the photonics device market. He said, "Photonics is the foundation of various applications. This also makes the market full of diversity because most companies provide services for more than one market."
The European market
Thierry Robin, a partner and co-founder of the French market consulting company Tematys, proposed another market view using a different definition of photonics devices from SPIE. The company detailed its definition in a report published by Photonics21. It is reported that Photonics21 will also release an updated version of the report in March. Robin and Brown pointed out that despite the differences in methods, both analyses gave almost the same prediction for the market growth rate over the past decade-Tematys at 7%, and SPIE at 7.3%.
Robin also deeply analyzed the specific device market. He stated that Tematys predicts that all sub-markets will grow by 7%-10% from 2022 to 2027. He particularly emphasized the expected growth of the following sub-markets:
• Light sources: Driven by reasonably priced new wavelengths and better power costs, the LED market will grow by 8%, and the laser market will grow by 7%. • Optical devices: Driven by compact components and fast/accurate beam deflection, the discrete optical device market will grow by 7%, and the optical fiber market will grow by 10%. • Photonic sensors: Driven by reasonably priced new wavelengths and on-chip functions, the imaging detector market will grow by 8%.
Robin also estimated that the market size of photonic integrated circuits (PICs), which include lasers, optical devices, and sensors, is about 1 billion dollars. He highlighted two rapidly growing emerging technologies: metamaterials for optical and radio frequency (RF) fields, and spectrometers the size of a chip. "It is expected that the market for optical metamaterial surfaces will grow rapidly because they have been used in smartphones and microelectronics, and will also be used in applications such as virtual reality (VR) and display," Robin said.
Tematys predicts that the revenue of metamaterials and metamaterial surfaces used for optics will increase from 26.6 million dollars in 2022 to 779 million dollars in 2029. In the RF market, it is expected that the revenue of metamaterials and metamaterial surfaces will increase from 112.8 million dollars in 2022 to 560.1 million dollars in 2029.
Metamaterials use the structural patterns of standard materials to achieve unique optical properties. In the field of optics/photonics, applications of metamaterials include filters and combiners, wavefront-selective metal lenses and active beamforming/beam control devices; in RF applications, applications include antennas, passive transmitters/reflectors, and active beam forming/beam switching devices.
In the field of spectrometers, Robin said, "We are seeing a huge growth in the market for chip-sized spectrometers, especially because they are already used in smartphones [ for camera enhancement ] ," he said, although he did not give specific growth figures, but a chart in his presentation shows a market of more than $500m for 2026, mainly for consumer applications, that will be virtually nil in 2020.
The driving force behind growth
For the drivers behind the growth of the photonics market, Robin summarized the following points:
• The need for high-speed data transmission to meet the demands of digitization, machine learning, and the Internet of things (IoT) is growing.
• There is growing demand for remote vision and sensing technologies for AR/VR, autonomous vehicles, advanced driver assistance systems (ADAS) , process automation and unmanned reconnaissance.
• Advances in digital and additive manufacturing have led to greater precision, less waste and greater design flexibility.
• Rapid advances in health care and life sciences have led to better diagnosis, personalized medicine and innovative treatments.
• as governments grapple with geopolitical instability, they are increasingly focusing on defence and surveillance innovation and strengthening their supply chains.
