What will be the leading markets for photonic integrated circuits (PICs) by the decade's end? And what are the challenges facing the PIC industry?
SiLC Technologies' Lidar PIC. Source: SiLC Technologies.
A panel session at the recent PIC Summit Europe event held in Eindhoven, The Netherlands, looked at what would be the markets for photonic integrated circuits by 2030.
The market for PICs is dominated by datacom and telecom. However, emerging applications include medical and wearable devices, optical computing, autonomous vehicles, and sensing applications for the oil, gas, water, and agriculture industries.
Taking part in the PIC Summit Europe panel on behalf of LightCounting Market Research, I shared two forecast charts. One showed LightCounting's latest Ethernet module forecast, highlighting the rapid growth expected in the next five years, including the adoption of 1.6-terabit and 3.2-terabit pluggables. Also shown was how silicon photonics is gaining market share and will account for nearly half of all optical transceivers by 2029.
No surprise then that LightCounting's view is that datacom and telecom will remain the dominant markets for PICs in 2030. Moreover, the challenges AI is posing the optical industry means the photonics developments will continue to drive the PIC market overall.
Julie Eng
Before the PIC Summit Europe panel, Gazettabyte sought some industry views. What would help the PIC landscape, and what should the PIC industry be addressing? Also, what were the views regarding the PIC marketplace in 2030?
Those approached focus mainly on datacom and telecom. But Julie Eng, the CTO of Coherent, has a broader remit that includes emerging photonics markets, while Mehdi Asghari is CEO of SiLC Technologies, a silicon photonics start-up focused on the Lidar marketplace.
Emerging PIC markets
Dave Welch, founder of Infinera and now founder and CEO of stealth start-up AttoTude, says PICs for datacom and telecom are alive and thriving, while PICs for Lidar and sensing are burgeoning applications with real volume.
Dave Welch
"Datacom and telecom will dominate for the foreseeable future," says Welch. "I do not see where any other application of comparable size can come from."
Maxim Kuschnerov, director of R&D, points out that 2030 is not as far out as it used to be: "That is like two bigger product cycles at most." He, too, says datacom and telecom will remain the main markets for PICs.
Coherent’s Eng agrees: "The primary driver of PICs will be datacom and telecom, but if you're looking for additional drivers, health monitoring is a possible one."
Coherent experienced an uptick for optical components for medical equipment during the COVID-19 pandemic. "The pandemic increased demand for PCR [polymerase chain reaction] testing, which grew the business for products we sell, such as optical filters and thermoelectric coolers," says Eng. "The pandemic focused people more on health monitoring, and that, combined with advanced health-monitoring featured in smart-watches, has grown interested in personal health monitoring."
Eng notes that component sales into PCR testing declined post-COVID although interest remains high in personal health monitoring.
Companies are also addressing biosensing using silicon photonics and semiconductor lasers. "In some cases, a silicon photonics PIC for this application could be fairly large as it is often helpful to monitor many wavelengths," says Eng. She also highlights potential volumes. "If biosensing in the watch takes off, that could be a higher volume than datacom transceivers, and the PICs may be large. So that is an application to watch."
Professor Laura Lechuga
"The pandemic experience has pushed the point-of-care testing market, which include biosensors, exponentially," says Professor Laura Lechuga, a leading biosensor researcher. "This is an increasing market every year with an intensive research and development at academic and industrial level. Point-of-care will be for sure the future of diagnostics."
Kuschnerov also highlights the health-monitoring market. "There has been a lot of work on non-invasive glucose monitoring using optical sensing, but it is not clear if this could pass FDA [U.S. Food and Drug Agency] approval," says Kuschnerov. “It could be a life changer for people with diabetes."
Rafik Ward is a consultant working with companies on PIC developments including the point-of-care medical device marketplace. One start-up developing PIC technology realised it was competing with low-cost point-of-care diagnostics devices. Another challenge the start-up faced is the long development cycles and difficulty entering the medical marketplace. The start-up decided to refocus on communications.
"One thing that did come from COVID was the realisation of how fragile our distribution and logistics ecosystem was and how dependent it was on low-cost labour," says SiLC's Asghari. The labour shortage persisted after COVID-19 and has driven a push for warehouse and logistic automation. "For our business in Lidar, this has created a significant demand in robotics and automation," says Asghari.
Another driver is the drop in the working-age population—about 1 per cent a year—caused by the drop in population growth in industrial countries over the past 20 years.
"This is a major issue and is becoming even more critical over time," says Asghari. "If robots need to do the kind of work that people do, then they need to see the way we do, and cameras and even 3D imagers don't cut it."
Kuschnerov says gas, oil, water quality, and agriculture will eventually use optical sensing variants, but he does not expect high volumes.
Maxim Kuschnerov
Another wearable market is augmented reality/ virtual reality (AR/VR) glasses. This volume market has been predicted for years, but work is taking place, such as the development of diffractive waveguides for such glasses. "Research is happening here, which can't be ignored, but it's a non-existent market today," says Kuschnerov.
Infra-red sensors are set to grow for autonomous drone warfare. Military drones being used in Ukraine and the Middle East are changing modern warfare, he says, a development noted by the leading militaries.
VCSELs for a 3D vision of robots will continue to stay relevant. "The future is full of these (Tesla-like) robots. I'm sure they will need VCSEL arrays," says Kuschnerov.
Challenges facing the PIC industry
Ward says the highest priority regarding PICs is for the fabrication plants [fabs] to reduce cycle times from tape-out to returned chips.
Rafik Ward
Indium phosphide fabs regularly turn around chips in six to eight weeks, whereas several of the big silicon photonics fabs take five months. Moreover, chip designs can often take two to three iterations to get to production. "We shouldn't be surprised that indium phosphide has consistently been six or more months ahead of silicon photonics at each generation," says Ward. "It's simple maths." Silicon photonics needs to be developed to launch new generations of communication devices at the same time as indium phosphide products.
Ward also highlights the need for improved process design kits (PDKs). "While this is improving, there is still too much redundant work by PIC customers because PDKs are immature," he says.
AttoTude's Welch notes that, in years past, the value of PICs has been in integrating optics, specifically lasers. The issue with lasers, however, is their environmental compatibility with silicon circuits. "This problem needs to be improved if we expect greater integration into the system needs," says Welch.
Prof. Lechuga says that one of the main obstacles for biosensors is mass-fabrication at low cost. "It will be interested to see if Europe could offer such fabrication," she says.
Another issue is the benefits a PIC brings. For Eng, PICs must solve a problem and offer value at a lower cost than existing solutions. "That is a big ask," says Eng. "Optical technologists must understand new markets with many established technologies."
Getting help
Asghari suggests several ways the optics industry and governments can help, and not just for PICs. The industry and governments must be measured to avoid boom-and-bust cycles, or at least not feed them.
Mehdi Asghari
"I see the AI hype now, and it brings back bitter memories of the 2000 era," says Asghari. "That did not help anyone and set back the industry in a major way."
He also calls for fairer trade but not through tariffs. We need fairness, he says: "Our gates are wide open, and we hold ourselves to rules that do not allow governments to support industry."
But China does whatever it likes, he says. "Our reaction is to add tariffs on imports on things that our industry needs to manufacture, and unfortunately, a lot of these are still from China." It is, therefore, important to make it easier for companies to manufacture in the West and help bring back basic key capabilities. "We should enable investments and not tax them, and we should stimulate the venture capital communities to invest in hardware, which no one does anymore," says Asghari.
The issue of population shrinkage and the need for automation is the photonics industry's chance to lead. "But we are losing again due to lack of investment in the same way that we are losing the electrical vehicle market," he warns.
For Asghari, what is needed is a long-term vision, stability, and fairness.