Photonics can be defined as a branch of science which involves detection, generation and control of photons. Simply put, photonics enables users to tap the potential of any form of radiant energy with photon as its quantum unit. Photonics is a very broad landscape with innumerable applications which span across industries like consumer electronics, aerospace, healthcare, manufacturing, chemical, and military and defence among others. As technical know-how associated with this field of science is already high among enterprises of all sizes and still continues to increase, penetration of this technology across sectors is also high.
The photonics market growth is partially attributed to rapid growth of precision manufacturing across the globe. Precision manufacturing can be defined as a type of manufacturing which has been gaining widespread adoption for the manufacturing of small parts with extreme accuracy for machinery and equipment across industries. As miniaturization continues to influence the design of many solutions, adoption of technologies which facilitate miniaturization is also increasing across industries. Communication and technology, for instance, is one of the major industries which are witnessing increasing penetration of miniaturization. Continuous transformation in IT infrastructures across the globe and increasing number of enterprises worldwide is increasing the demand for small hardware components which, in many cases, act as backbone of the infrastructure. This increasing demand for such components is pushing many manufacturers across economies, which have required infrastructure and resources to manufacture such components, to ramp up the production. South Korea, for instance, is one of the technology hubs in Asia Pacific, and has been contributing significantly in meeting the global demand for ICT equipment. The figure given below shows the trends in output of ICT equipment in the country:
South Korea ICT Equipment Production, 2014 to 2019, in Trillion Korean Won
Source: Korea Information Society Development Institute
Interestingly, sectors such as memory semiconductors are witnessing a very sluggish growth and increasing network virtualization across all key markets are shrinking the demand for hardware components. Yet, the country is witnessing a continuous increase in the production of such components. Other economies like China, Japan and India among others are also contributing to this increasing production. Although other regions like Europe and North America also contribute to the global supply of these components, a major chunk of this supply is held by the economies in Asia Pacific. Continuous expansion of data centers across the globe is also contributing to the growing demand for small hardware components. As per the data released by the World Bank, the total number of secure internet servers globally increased from 1.29 million in 2010 to 26.35 million in 2017. The rate of growth has been the highest in developing countries, with the year-on-year growth rate in 2017 going as high as 3,3336.36% in Somalia. China, Brazil, Chile and Italy are among some of the fastest growing countries in this sector. Google, in February, 2019, announced its plans to invest $13 billion in new data centers and offices in the United States. The company is planning to open 7 new data centers and 10 new offices across the country. Earlier in December, 2018, CtrlS Datacenters, a data center provider based in India, announced its plans to invest INR 2,000 crore to set up 3 new data centers in Mumbai, Hyderabad and Chennai. As communication and technology sector continues to show an increase in demand for precision components, the demand for technologies used for the purpose is also increasing, thus boosting the photonics market growth.
The market growth is also being driven by rapid growth of aerospace industry in regions like Europe and North America. These regions are witnessing inflow of huge investments by industry players. The United Kingdom, for instance, has been making significant investments into aircraft manufacturing. Although UK mainly manufactures and markets parts for aircrafts, assembly of aircrafts in this country has also been increasing. For instance, the Ministry of Defense, United Kingdom, in November, 2018, announced that it is in talks with Boeing regarding undertaking of the assembly of E-7 aircrafts and radar combination within UK. Spain, another key economy in this sector, has some very important facilities of Airbus and Boeing, two of the largest players in the aerospace sector. For instance, Getafe Madrid and Puerto Real, Cádiz (Andalusia) facilities take care of assembly of Airbus’ A380. Final assembly of Airbus’ Eurofighters for Spain takes place at Getafe Madrid. Final assembly line for Airbus’ military transport airlift A400M and for medium-sized tactical aircraftCN235s and C295s also takes place in Spain at Airbus’ Sevilla (Andalusia) facility. Photonics is used not only in manufacturing of aircraft components, but also for regular rigorous inspection of aircrafts in order to identify and mitigate any structural damages. Growth of this sector is thus supporting the market growth of photonics.
Consumer Electronics is another sector contributing to the global photonics market growth. Unlike many other sectors, this sector is witnessing continuous miniaturization. With increasing manufacturing of components with size in few nm, ongoing research in this sector is focused on making components and solutions of even smaller size. Although this requires robust technology infrastructure, many economies are still showing a continuous increase in production of such electronics products and components. Japan, for instance, has managed to maintain a good position in electronics manufacturing segment. The figure given below shows the trend:
Domestic Production by the Japanese Electronic Industry, in Yen 100 Million
Source: Japan Electronics and Information Technology Industries Association
Many other economies across the globe are also contributing to the increasing electronics production across the globe. We estimate that this sector holds a fairly large share in the global photonics market and as a large number of manufacturers continue to spend rigorously into technologies which can aid them in achieving size of solutions even smaller than a nm, we expect this sector to have the highest impact on the growth of this market throughout the forecast period.
About the Author:
Dhiraj Kumar Sharma is a Market Research Analyst at Knowledge Sourcing Intelligence. He combines his outright understanding of technologies with years of experience working in the industry to deliver actionable information to clients who span across industries and geographies. Dhiraj often works closely with clients in order to better understand their requirements and is known for the quality of market insights he delivers to them.