Silicon leads photonics market by material with 40.3% share; GaN to rise at 9.3% CAGR through 2030

The photonics market is driven by the rising adoption of optical communication, laser-based manufacturing, and energy-efficient lighting technologies. Expanding use in telecom, healthcare imaging, and semiconductor production is fueling global photonics industry growth and innovation across connected and sustainable applications.

The photonics market is valued at USD 1.75 trillion in 2025, and is projected to reach USD 2.39 trillion by 2030, growing at a CAGR of 6.43%, driven by rising demand for high-speed data transmission, energy-efficient displays, and advancements in optical communication technologies. Growth is fueled by the increasing deployment of high-speed optical links in data centers, wider adoption of LiDAR in vehicles, and ongoing demand for energy-efficient LED lighting.  

Regional initiatives such as India’s PLI scheme and the EU Chips Act are accelerating fab construction, while investments in silicon-photonics start-ups and the standardization of LiDAR in automotive ADAS systems support market expansion. Additionally, scaling up GaN and micro-LED manufacturing reflects a shift toward lower power consumption technologies in consumer and industrial devices. 
 
Key trends and growth drivers in photonics industry 

LiDAR integration accelerating ADAS adoption in China
Chinese automakers are rapidly adopting LiDAR-based systems, making advanced driver-assistance features more accessible in mid-range vehicles. Collaborations between local suppliers and OEMs are expanding deployment beyond premium models, while government-backed safety standards are speeding up certification and commercialization across the automotive market. 

Rising data-center interconnect needs boost silicon photonics adoption
The growing complexity of AI-driven data centers is driving a shift from copper to silicon photonics transceivers, enabling faster data transfer with lower energy use. Advanced foundry platforms integrating photonic and electronic layers are supporting large-scale optical connections, while strong investor interest continues to accelerate innovation and market expansion. 

PLI Scheme Driving Growth of India’s Photonics Ecosystem
India’s production-linked incentive program is accelerating the formation of domestic photonics hubs by supporting semiconductor manufacturing and research. With new facilities and collaborative partnerships, the initiative is strengthening local capabilities, reducing import dependence, and positioning India as a rising player in advanced photonics production. 

Photonics market regional insights
* Asia-Pacific dominates the photonics market share, driven by large-scale electronics manufacturing in China, Japan, and South Korea.  
* Europe leads in photonic research and innovation, with Germany and the Netherlands pioneering integrated optics.
* North America sees strong growth across defense and medical photonics, supported by high R&D investments and robust semiconductor infrastructure.