IDTechEx: AI Data Center Demand Boosts PICs, Emerging Applications Surface

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DateMay 7, 2024

The field of Silicon Photonics and Photonic Integrated Circuits (PICs) is seeing a notable upswing, driven by the increasing needs of data communication transceivers and artificial intelligence (AI), according to a report by IDTechEx. PICs are being used in transceivers more and more frequently thanks to the leadership of major industry firms including Intel, Coherent, and Infinera.

The ability of photonic integrated circuits; tiny optical devices made of silicon, indium phosphide, or silica (glass), can transport billions of bits of data in compact sizes similar to candy bars, is transforming technology. These circuits are opening up new applications including environmental sensing in addition to enabling complex optical designs.

Despite the advantages, the PIC market confronts substantial challenges, including material limitations, integration complexities, and high initial costs. A substantial market demand is necessary to offset these costs, with production lead times stretching over several months. The recent “Silicon Photonics and Photonic Integrated Circuits 2024-2034: Market, Technologies, and Forecasts” report by IDTechEx offers an exhaustive analysis, identifying AI’s photonic transceivers as a rapidly growing segment soon to become the largest demand driver for PICs.

The current market would predominantly utilize silicon and silica-based PICs, ideal for light propagation. Silicon, an indirect semiconductor, is generally inefficient as a light source or detector, which necessitates its pairing with III-V materials to achieve these functions. While silicon continues to dominate, emerging materials like Thin Film Lithium Niobate (TFLN) and Monolithic Indium Phosphide (InP) are gaining traction for their superior performance in high-stakes applications such as quantum systems and high-performance transceivers.

The rise of AI has significantly impacted the demand for high-performance transceivers, essential for supporting the vast data rates required by AI accelerators and data centers. Silicon Photonics and PICs, with their capability to handle data speeds of 1.6Tbps and beyond, are critical in this technological revolution. For instance, Nvidia’s latest Blackwell CPUs necessitate around two 800G transceivers per GPU, highlighting the crucial role of efficient, high-bandwidth communication in AI development. The anticipation for 3.2Tbps transceivers by 2026 underscores the escalating performance requirements driven by AI advancements.

High-Bandwidth Chip-to-Chip Interconnects

Beyond AI and datacom, the applications of Silicon Photonics and PICs are diverse, spanning from high-bandwidth chip-to-chip interconnects to advanced packaging and co-packaged optics. These technologies are forging paths for next-generation computing innovations. High-performance processors and programmable PIC devices leverage components like Mach-Zehnder Interferometers, facilitated by electro-optical interconnects. Additionally, the miniaturization of optical components into PIC devices is paving the way for revolutionary healthcare applications, such as Point-of-Care diagnostics and wearable sensors.

In the automotive and agricultural sectors, PIC-based FMCW LiDAR is emerging as a transformative technology for drones and autonomous vehicles. Similarly, the quantum computing sphere is increasingly relying on PICs to achieve the precise photon control required for computation, with companies investing in trapped ion and photon-based systems.

Reflecting on the commercial landscape, companies like Innolight are pushing the boundaries with transceivers that achieve 1.6Tbps, set to hit the market for data-center applications in 2024. Coherent is also making strides with its InP wafer fab facilities to develop transceivers surpassing the 1.6Tbps mark. Meanwhile, Intel’s Silicon Photonics segment, which might soon be under the aegis of manufacturing firm Jabil, sold approximately 1.7 million PICs in 2023, as per IDTechEx.

Looking ahead, IDTechEx projects a continued dominance of PIC technology in the high-performance transceiver market, cementing its crucial role in shaping the technological landscape of tomorrow. As the industry navigates the evolving challenges and harnesses emerging opportunities, the strategic importance of Silicon Photonics and PICs is set to escalate, marking a new era in high-speed, efficient data communication and beyond.

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