Yole Forecasts SiPho Market to Grow at 44% CAGR from 2022-2028

The silicon photonics market is projected to experience significant growth in the coming years. According to Yole Developpement, the market, currently valued at $68 million in 2022, is expected to reach over $600 million by 2028, growing at a compound annual growth rate (CAGR) of 44% from 2022 to 2028. This growth is primarily driven by the increasing demand for high-data-rate modules and the use of optical I/O in machine learning (ML) servers for scaling models with light.

The industry is characterized by a diverse range of participants, including major vertically integrated players like Intel, Cisco, Marvell, Broadcom, Nvidia, and IBM, as well as startups and design houses such as AyarLabs, OpenLight, Lightmatter, and Lightelligence. Among these players, Intel stands out as a leader, investing heavily in research and development. On the other hand, numerous startups are focusing on specific applications or developing novel technologies.

In the datacom sector, Intel currently holds a dominant position with a 61% market share in both shipments and revenue. Cisco, Broadcom, and other smaller companies follow Intel. However, with the strengthening of portfolios and commercialization efforts from other players, Intel's dominance in this sector is expected to diminish in the future.

When it comes to telecom, Cisco, through its acquisition of Acacia, commands nearly 50% of the market share. Lumentum (Neophotonics) and Marvell (Inphi) are the other key players in this sector. The market for telecom is primarily driven by the demand for coherent pluggable ZR/ZR+ modules.

Overall, Intel remains the market leader in the datacom sector, with a 61% market share in both shipments and revenue, closely followed by Cisco and Broadcom. However, with the rapid growth of the silicon photonics market and the emergence of new players, the landscape is expected to evolve in the coming years.