Photonics is anything that involves detection, generation and/or control of photons which are the fundamental particles of light. In other words, photonics facilitates the tapping of potential of any form of radiant energy, which has photon as its quantum unit, by users. Photonics is a very vast landscape with innumerable uses across applications which span across all key industry verticals like healthcare, chemical, consumer electronics, manufacturing, aerospace, and military and defence among others. Already high technical know-how associated with this field of science among enterprises, and further increasing know-how on account of inflow of huge investments into research and development, is pushing this technology deeper into sectors. When this technology first emerged, its use was limited only to some high-end applications only across some key sectors. But as this technology continued to climb up the growth curve and move towards maturity, its scope of applications continued to expand. From sectors, which are usually perceived as technology intensive, to sectors like agriculture, which have, for long, been seen as low technology-reliant sectors, this field of science has seen immense evolution. The maturity of this technology can be determined by the fact that the global markets have presence of innumerable solutions which are inexpensive and use photonics as their driving force.
The global photonics market growth is partially being driven by continuous growth of precision manufacturing in many regions across the globe. Precision manufacturing has been gaining widespread adoption for the manufacturing of small parts with extreme accuracy for machinery and equipment across industries. As designs continue to reflect the influence of miniaturization, we are witnessing a continuous increase in the adoption of technologies which facilitate miniaturization across industry verticals. Communication and technology, for instance, is one of the many industries which are witnessing increasing influence of miniaturization. Continuous evolution of IT infrastructures worldwide, on account of high focus of enterprises towards improving the overall efficiency of the IT infrastructure, is increasing the demand for more advanced hardware components. This growing demand for such components, many of which are getting smaller in size with continuous investments into research and development, is pushing many manufacturers across economies to ramp up the production of such components. South Korea, for instance, which continues to remain one of the key technology hubs in Asia Pacific, has been witnessing a continuous increase in the demand for ICT equipment. The figure given below shows the growth in output of ICT equipment in South Korea:
South Korea ICT Equipment Production, 2015 to 2019, in Trillion Korean Won
Source: Korea Information Society Development Institute
Interestingly, demand for these equipment from sectors such as memory semiconductors is showing a very slow growth and solid growth of network virtualization across markets worldwide is adding to this impact. These factors are contributing to shrinking of demand for ICT hardware components. Yet, South Korea is witnessing a decent growth in the production of such components. Other countries like Japan, China, Taiwan and India among others are also adding considerably to this increasing production. Although other regions like South America, Europe, Middle East and Africa, and North America also contribute to the global market for these components, a significantly large share of this supply is accounted for by the economies in Asia Pacific. Furthermore, continuous expansion of data centers in many regions across the globe is also fuelling the demand for small hardware components. According to a data from the World Bank Group, the cumulative number of secure internet servers worldwide rose from 1.29 million in 2010 to 26.35 million in 2017. This sector is also witnessing a heavy inflow of investments by players who seek to leverage the growth potential held by it. For instance, in February, 2019, Google announced its plans to pour $13 billion in new data centers and offices in the United States. The technology giant revealed its plan to open 7 new data centers and 10 new offices across the country. Earlier, in December, 2018, CtrlS Datacenters, announced an investment of around INR 2,000 crore in setting up 3 new data centers in Mumbai, Hyderabad and Chennai. As the growth of the global communication and technology sector remains robust, the demand for precision components is also increasing. This is driving the demand for technologies used for the purpose of manufacturing, thereby boosting the photonics market growth.
The market growth is also being propelled by the growth of aerospace industry which has remained good especially in regions like Europe and North America. This growth is majorly due to heavy inflow of huge investments by industry players. The United Kingdom, for instance, has been a key aircraft manufacturing economy in the world, and the growth of the sector in this country is closely tied to the investments that flow into it. Although the country mainly manufactures and markets parts for aircrafts, assembly of aircrafts is also increasing. In November, 2018, the Ministry of Defence, United Kingdom, announced that the government is in talks with Boeing regarding commencement of assembly of E-7 aircrafts and radar combination within the country. The use of photonics is not confined to manufacturing of aircrafts or their components, but it goes beyond to regular and rigorous inspection of aircraft bodies as part of the companies’ efforts to identify and mitigate any structural flaws. This is increasing the demand for photonics-based solutions in this sector, thus driving the market growth.
Consumer Electronics remains a key contributor to the growing demand for photonics. With growing manufacturing of components with size in few nm, the demand for solutions and technologies which can facilitate precision manufacturing is increasing in many parts of the world. Although this requires advanced technology infrastructure, many countries have it, and are still showing a good growth in the production of such electronics products and components. Japan, for instance, holds a good position in this 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 countries worldwide are also contributing to this increasing electronics production. This sector holds a fairly large share in the global photonics market and as miniaturization and precision manufacturing continues to increase its traction across this sector, we expect it to have the highest impact on the global market growth till 2025.
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.