The rise of AI and high-performance computing is driving growth within the market for new technologies that can optimize performance. Photonic integrated circuits are just one of the many phenomena explored by IDTechEx in their portfolio of Semiconductors, Data Centers, AI Research Reports and Subscriptions.
An overview of PICs
IDTechEx reports that AI and high-performance computing (HPC) hardware has opened up large opportunities for photonic integrated circuit (PIC) technologies, including AI servers, AI networking technologies, and AI storage. Within networking hardware, the subsection of interconnects is where optical transceivers sit. These have recently been the biggest application for PICs, where the converting of optical signals into electrical signals takes place, as PICs are formed on a semiconductor material which lets light through.
Some of the main advantages of using PICs include the benefit of light traveling at a faster speed than electricity, less resistance losses and interference, and higher information density. When compared with electrical integrated circuits, PICs are far more efficient at data transfer, have better bandwidth capabilities, and around a third lower latency. While some of the downsides of PICs include high costs, larger chip areas, and less maturity, they can be manufactured using modern CMOS processes with a large choice of materials and are easy to integrate. IDTechEx's report, "Silicon Photonics and Photonic Integrated Circuits 2026-2036: Technologies, Markets, and Forecasts", covers the latest developments within the market.
Many deals have taken place over the past couple of years across various photonics players, highlighting significant recent growth and large investments within the market. IDTechEx predicts that the photonic integrated circuit-based transceiver market will surpass US$48billion by 2036.
CPOs and high-performing AI models
Co-packaged optics (CPO) is a current trend across the computing sector, where optics components are positioned closer to the ASIC in order to minimize transmission losses. This is explored further in IDTechEx's report, "Co-Packaged Optics (CPO) 2026-2036: Technologies, Market, and Forecasts". With increased investments into the optical transceiver market as a whole, PICs and silicon photonics are positioned well to see growth in the near future.
AI models require high-performance transceivers as a result of models being too large to fit on one GPU and therefore need to be fit across multiple GPUs strung together which can provide the benefits of a fast data flow. Low latency and optimal bandwidth are therefore necessary to ensure models can work smoothly without interference, which is why industries are moving towards using optics.
IDTechEx describes in its webinar on PICs the concepts of vertical and horizontal scaling within data centers. Vertical scaling, or a scale-up, would see the resources in a single server increased, including GPU, memory, and storage, to improve the performance and speed of an individual node, while horizontal scaling, or a scale-out, sees more servers added to a system to increase capacity and broaden a network.
For more information on photonic integrated circuits and computing trends, visit IDTechEx's portfolio of Semiconductors, Data Centers, AI Research Reports and Subscriptions for the latest developments.
