The International Renewable Energy Agency (IRENA) states that the global installed capacity of solar photovoltaic (PV) installations and solar thermal power plants will surge from 583,872 megawatts (MW) in 2019 to 709,674 MW in 2020 and 6,384 MW in 2019 to 6,479 MW in 2020, respectively. The increasing capacity of solar energy power plants, on account of the rising global warming and surging air pollution levels caused due to fossil fuel combustion, will result in the largescale adoption of photonics products.
Additionally, the booming demand for energy-efficient products is expected to drive the photonics market at a CAGR of 6.9% during the forecast period (2020–2030). According to P&S Intelligence, the market revenue stood at $576.8 billion in 2019 and it will reach $1,214.5 billion by 2030. The adoption of energy-efficient products by power plants is causing a sharp fall in fossil fuel consumption and increasing the efficiency at low maintenance costs, owing to which there has been a large-scale development of high-performance computing systems.
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In recent years, data centers have increasingly deployed silicon photonics instruments to develop high-speed transmission systems because these instruments offer high data transfer rates of more than 100 Gbps and consume less energy. Moreover, the rising inclination of Datacom protocols toward high-speed signaling will also encourage the adoption of silicon photonics at data centers. The integration of silicon photonics with Complementary Metal-Oxide Semiconductor (CMOS) solutions enables data centers to attain next-generation performance by offering high-speed interconnect.
The product type segment of the photonics market is classified into laser, light-emitting diode (LED), optical component and system, and sensor and detector. Among these, the LED category is expected to exhibit the fastest growth throughout the forecast years as the integration of LED technology into intelligent digital lighting solutions will result in reduced energy consumption. Additionally, the energy efficiency and greater life span of LED lights will also contribute to the growth of this category in the forecast years.
In contemporary times, the industrial sector utilizes the highest volume of photonics products due to the surging use of such products, such as lasers, in the manufacturing sector for cutting, drilling, welding, and laser marketing applications. Further, the consumer electronics industry is expected to adopt a considerable quantity of photonics products, on account of the booming demand for smart air conditioners, smart TVs, and smart refrigerators. Additionally, the telecommunication, medical, and defense and security sectors also consume a notable quantity of such products.
Geographically, the Asia-Pacific (APAC) photonics market generated the highest revenue during the historical period (2014–2019), and it is also expected to display the fastest growth during the forecast period. This can be primarily ascribed to the large-scale adoption of consumer electronics in China, Indonesia, India, Japan, South Korea, and Thailand. In the forecast years, India will exhibit the fastest growth in the APAC market due to the booming PV industry and strengthening manufacturing sector, on account of the implementation of government initiatives such as 'Make in India', in the country.
Therefore, the increasing installation of solar PV cells and solar thermal plants and escalating demand for energy-efficient products will encourage the usage of photonics products in the upcoming years.
