Due to improved reliability and continued growth in the demand for optical connectivity with AI clustering, LightCounting is forecasting the sale of silicon photonics (SiP) and thin film lithium niobate (TFLN) to reach over 70% of market share by 2029.
A report from optical communications marketing research company LightCounting suggests that, although a “surging demand for optical connectivity in AI Clusters has reversed the decline of gallium arsenide (GaAs) vertical-cavity surface-emitting laser (VCSEL) semiconductors,” referencing Nvidia’s purchase of almost two million transceivers this year already and plans to buy four million more, the “comeback story for VCSELs will not last.”
Suggesting Nvidia itself will prioritise silicon photonics technology for its next generation of transceivers, the report predicts that sales of silicon photonics chips will increase from $0.8bn in 2023, to above $3bn in 2029, and sales of PICs specifically with TFLN modulators will grow from a standing start of near zero to £0.75bn in the same time period. Meanwhile, sales of bulk lithium niobate (LiNbo3) modulators of the kind used in legacy dense wavelength-division multiplexing (DWDM) transceivers will continue to decline to near-zero by the end of the decade.
Image: LightCounting
Rise in silicon photonics’ market share
The image above, taken from LightCounting’s report, shows the changing sales data of lasers and PICs used in optical transceivers, sorted by technology. While there are gradual declines predicted in the market share of GaAs- and indium phosphide (InP)-based transceivers, SiPs and TFLNs will gain share, and the broader adoption of linear photonics optical (LPO) pluggable optics and co-packaged optics (CPO) will also contribute to the growth of SiPs market share.
Manufacturers of silicon photonics unite for dominance
“Companies manufacturing TFLN products are joining forces in accelerating supply chain development,” suggests the report, with Advanced Fiber Resources (AFR), HyperLight, Fujitsu Optical Components (FOC), Liobate and Ori-Chip and partners organising a well-attended TFLN workshop at OFC 2024, and LightCounting predicting more companies to invest in the required infrastructure to scale up production.
Summarising the report, LightCounting suggest that, assuming TFLN can be included within a broader definition of silicon photonics PICs, “sales will reach close to $3.8bn by 2029.”
