Photonic Packaging Market

Photonic Packaging Market Outlook (2024 to 2034)

The global photonic packaging market size is evaluated at US$ 289 billion in 2024 and is forecasted to increase at a CAGR of 5.8% to reach US$ 507.87 billion by the end of 2034.

A roadmap for the packaging of integrated photonic devices becomes more important as new mass markets for integrated photonics emerge and unit demand rises rapidly. This has made it necessary to create packaging procedures that are more affordable and volume scalable. Packaging can be thought of as the assembly of electronic and photonic devices from boards to chips, including mechanical housings such as hermetic and non-hermetic packages, micro-optics, optical fibers, and electronic IC packaging using wire bonding, thermal management, and flip-chip assembly.

• North America is expected to hold 23.8% of the global photonic packaging market share in 2024.

The use of these cutting-edge production methods will necessitate the purchase of new precision packing tools and equipment. Advanced machine vision and robotic systems will be used more frequently in automated and passive optical packaging procedures in place of current operator assembly procedures.

Operator-driven assemblies are inappropriate for complicated multi-channel integrated photonic devices because they cannot offer the sub-micron alignment tolerances necessary for very high-volume manufacturing. Improvements gained in packaging machinery used for sophisticated electronics assemblies will also aid developments in electronic and photonic packaging.

• Short Term (2024 to 2027): The growing popularity of photonics and innovations in packaging will positively influence photonic packaging market growth.
• Medium Term (2027 to 2030): North America and Europe are projected to exhibit comparatively high photonic packaging demand due to the high penetration of optical and photonic products.
• Long Term (2030 to 2034): Integration of advanced technologies such as nanopackaging and 3D printing, some of the notable photonic packaging market trends will benefit key producers in the long run.

Report Attribute	Detail
Photonic Packaging Market Size (2024E)	US$ 289 Billion
Forecasted Market Value (2034F)	US$ 507.87 Billion
Global Market Growth Rate (2024 to 2034)	5.8% CAGR
South Korea Market Value (2034F)	US$ 20.35 Billion
Gallium-based Photonic Packaging Demand Growth (2024 to 2034)	5.2% CAGR
Single-mode Photonic Packaging Sales (2034F)	US$ 196.04 Billion
Key Companies Profiled	Aim Photonics; Boschman; Fiberoptics Technology Inc; IBM; Inphotec; Juniper Networks; Keysight; Tyndall National Institute; VLC Photonics; MSRI Systems; PHIX; Technobis.

Why is Photonic Packaging Gaining Traction Worldwide?

“Emerging Technologies for Photonic Packaging Paving Way for High Growth Opportunities”

It's interesting to consider how developing technologies, in addition to those that are already in use, can influence photonic packaging demand over the coming years. For instance, FR4 (fire-resistant, version 4) PCBs coupled with polymer waveguide technology are used to demonstrate evanescent coupling and can also be used to produce a platform. Here, greater cost-effectiveness and processing flexibility of the polymer waveguides (i.e., photolithography or direct laser-writing), especially for large areas, are the key advantages over glass interposers.

Moreover, the packaging of silicon photonic devices with electronic amplifiers, drivers, and other control circuitry is becoming a significant challenge as demand grows for high levels of operational frequencies (>25 GHz) and co-integration of photonic electronics. To this, Nano-photonic packaging technology is anticipated to act as the best option.

“Advancing Data Center Network Architectures”

By extending photonics to the switching nodes, data center system architectures can be much more scalable and effective, in addition to improving chip technology. Many data centers are working on innovations to shift switching functions into the optical domain and loosen the constraints on digital functionality.

The bandwidth per fiber and scalability of the data processed in the switch fabric can be increased due to the high-density integration of silicon photonics with electronics. The optical data capacity of a silicon photonic device can expand as it becomes widely used throughout data centers, due to improvements in silicon photonics manufacturing. Owing to this, demand for photonic packaging is expected to rise in data centers.

“Advanced Manufacturing Processes Requiring Photonic Device Wafer-level Packaging”

A key advancement in future packaging will be the transition to wafer-level packaging from device-level packaging. Like electronic packaging, wafer-level photonic device packaging will benefit from developments and more closely resemble it. Wafer-level packaging offers a remedy for better manufacturing process scalability, guaranteeing that the packaging is financially viable, especially for mass-market applications. As photonics becomes a more widely used technology platform for packaging, wafer-level packaging processes will gain momentum in the coming years.

What’s Hampering Widespread Adoption of Photonic Packaging?

“High Cost of Photonic Packaging Limits its Widespread Adoption”

Photonic packaging involves the integration of various specialized materials and precision manufacturing techniques. The implementation such materials and techniques leads to high cost. Thus, the high cost of photonic packaging can limit their adoption rates in price-sensitive markets.

Photonic components also often require integration with electronics and other optical components. This further leads to intricate design and manufacturing processes. This integration complexity further increases the overall cost of photonic packaging.

Start-up Ecosystem

• SCINTIL Photonics is a France-based start-up that manufactures silicon photonic integrated circuits. These circuits find extensive applications in 3D sensing, quantum photonics, and communications. The company’s solution, Backside-on-BOX, integrates silicon and indium phosphide for the flawless combination of active and passive optical components.
• LIGENTEC is a Swiss start-up that produces photonic integrated circuits. These circuits are used in biosensors and quantum technologies.

Country-wise Analysis

Will Increasing Use of Photonics & Optical Devices Drive Photonic Packaging Demand in the United States?

“High Use of Photonics in Military Sector Will Offer Lucrative Opportunities for Photonic Packaging Producers”

Attribute	United States
Market Value (2024E)	US$ 46.98 Billion
Growth Rate (2024 to 2034)	6% CAGR
Projected Value (2034F)	US$ 84.08 Billion

Increasing government spending on the advancement of technologies such as 5G networks is a prominent factor that will influence the demand for photonic packaging in the United States. Currently, the commercial and military application areas for photonics are growing rapidly in the country.

The first wave of commercial products is focused on the data communications and telecommunications areas, but applications in analog data processing, sensing, laser ranging, coherent systems, and many other spaces are rapidly emerging. A key innovation in recent years in the electronics industry has been the development of low-parasitic interposer technologies and through-silicon vias.

What Makes China a Lucrative Market for Photonic Packaging Solution Manufacturers?

“Growing Focus on Enhancing Electric Mobility”

Attribute	China
Market Value (2024E)	US$ 40.95 Billion
Growth Rate (2024 to 2034)	5.8% CAGR
Projected Value (2034F)	US$ 71.99 Billion

The 14th 5-year plan of China promotes rapid electric mobility and industrialization. Prime areas of Chinese government investments include quantum LIDAR, photonics, optical chips, industrial lasers, precision optics, and optical displays.

China is a rapidly growing photonic packaging market. Demand for industrial lasers, LiDAR, and optical systems is increasing, offering the photonics packaging industry a great deal of potential growth. Additionally, local governments are paying attention to the photonics industry, thereby making efforts to boost the photonic packaging market and investments to help upgrade downstream industries within their jurisdictions.

Category-wise Analysis

Why is Silicon Photonic Packaging a Popular Solution?

“Silicon Photonic Packaging Materials Offers High Performance and Reliability”

Attribute	Silicon-based Photonic Packaging
Segment Value (2024E)	US$ 165.6 Billion
Growth Rate (2024 to 2034)	6% CAGR
Projected Value (2034F)	US$ 297.61 Billion

As photonic modules become more compact, they will be in high demand to efficiently manage heat dissipation through non-thermoelectric means (passive). Thus, silicon materials are used to facilitate improved electrical, thermal, and optical performance. Further, silicon material improves thermal conductivities and also demonstrates extended lifetimes required for robust photonic modules.

Additionally, silicon photonic packaging is now widely accepted as a key technology in next-generation data interconnects and communications systems. It brings the advantages of integration and photonics-transmission of data over longer distances with high data densities in a platform where high levels of integration can be achieved with low manufacturing costs using conventional silicon integrated circuit infrastructure.

Why is Demand for Multi-mode Photonic Packaging So High?

“Compatibility with Existing Infrastructure Increasing Need for Multi-mode Photonic Packaging”

Attribute	Multi-mode Photonic Packaging
Segment Value (2024E)	US$ 172.53 Billion
Growth Rate (2024 to 2034)	6.1% CAGR
Projected Value (2034F)	US$ 311.83 Billion

Most data centers are already equipped with multi-mode fiber infrastructure. Upgrading or expanding these networks with multi-mode photonic packaging allows the organization to leverage its existing investments in infrastructure and benefit from high data throughput and improved network performance. Multi-mode photonic packaging offers a wide range of applications beyond data communications, such as in medical imaging and industrial automation.

Competitive Landscape

High cost of photonic packaging is probably creating a significant bottleneck in producing competitive photonic equipment. Key players in the photonic packaging market are focused on offering advanced solutions at competitive prices to attract price-sensitive customers.

The clear trend is for more compact photonic packaging designs with high levels of integration (MEMs and electrical), effective and ideally passive thermal stabilization, and lower insertion loss. Photonic packaging companies are developing scalable and standardized solutions from a legacy of individually customized prototypes. All in all, this will create high-growth opportunities for key market players.

• In January 2022, Nanoscribe and PHIX B.V., a Dutch photonics packaging foundry, announced a collaboration to provide on-fiber printing services to the photonics packaging industry.

Fact.MR provides detailed information about the price points of key producers of photonic packaging positioned across the world, sales growth, production capacity, and speculative technological expansion in the recently updated photonic packaging market report.

Key Segments of Photonic Packaging Market Research

• By Material :

  • Silicon-based
  • Gallium-based
  • Others

• By Technology :

  • Optical
  • Electrical
  • Thermal Management
  • Mechanical

• By Structure :

  • Single-chip
    • Area-array Packages (Ball Grid Arrays)
    • Surfacemount Packages (Quad-flat Packages)
    • Direct-chip Mounting
    • Dual-in-line Packages
  • Multi-chip

• By Mode :

  • Single-mode
  • Multi-mode

• By Application :

  • LiDAR & Imaging Devices
  • Li-Fi
  • Optical Sensors & Photodetectors
  • Photodiodes
  • Optical Communication Systems & Networking Components
  • Optoelectronic Devices
  • Others

• By End-use Industry :

  • Components & Material
  • Mobility
  • Discrete Manufacturing
  • Environment, Energy & Lighting
  • Healthcare & Life Science
  • Telecommunications
  • Aerospace & Defense
  • Consumers & Professionals
  • Others

• By Region :

  • North America
  • Latin America
  • Western Europe
  • Eastern Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa