# AI demand to fuel 23x silicon photonic growth by 2030 > Source: > Published: 2026-08-21 14:11:35+00:00 Silicon photonics is set to dominate the optical interconnect market by the end of the decade, according to a report by China Insights Consultancy (CIC) for Chinese laser developer Yuanjie Semiconductors, which predicts a 23-times surge in silicon photonic-specific revenue between 2024 and 2030. The [report](https://www1.hkexnews.hk/app/sehk/2026/108326/a131067/sehk26032500790.pdf), commissioned as part of Yuanjie’s Hong Kong IPO prospectus, projects that global AI capex will total $4.7 trillion between 2026 and 2030. Among investments driving that surge is the need for high-speed optical interconnects, which are increasingly essential to support the scaling requirements of AI networks. The CIC report, first spotted by *Tom’s Hardware**,* suggests that demand will cause the global laser chip market to rise at a 44.1% compound annual growth rate (CAGR) from just $2.6 billion in 2024, to $22.9 billion in 2030. Silicon photonics underpin the laser chip forecast, which CIC projects will have a growth trajectory even steeper than the market it feeds. Silicon photonic optics revenues posted a 55.4% CAGR between 2020 and 2024, and will accelerate to 68.5% CAGR between 2024 and 2030. The consulting firm expects the technology to take up a 63.7% majority share of the market, up from being a minority niche just a few years ago. The importance of silicon photonic optics to Yuanjie stems from the technology's use of its continuous-wave (CW) lasers paired with modulators in optics over electro-absorption modulated lasers (EMLs). Where EMLs involve complex fabrication processes, CW lasers are easier to produce and separating them from the modulation layer improves performance scaling in high-density environments, like in data center co-packaged optics (CPO). That means better power and thermal efficiency and a lower cost to produce. CIC lists Yuanjie as the No. 2 company globally for supplying CW lasers for silicon photonic interconnects – making its emphasis on silicon photonic demand a strategic and potentially lucrative long-term focus for the company. Among its key customers is Huawei, which invested in Yuanjie in 2020. The laser maker is already racing to meet increased demand, with plans for a [new production facility](https://www.scmp.com/tech/tech-trends/article/3351605/optical-chipmakers-profit-soars-1153-ai-demand-chinas-tech-self-reliance-push) near its headquarters in China's Shaanxi province. The optics market as a whole is expected to heat up and could be warmed even more if President Donald Trump officials go ahead with rumored plans for a ban on [imports of Chinese-made optical transceivers](https://www.sdxcentral.com/news/photonics-grabs-priority-of-white-house-security-strategy-over-data-infrastructure/). Such a move could hamper Western AI infrastructure buildouts, with several Chinese firms among suppliers of optics to hyperscalers. Integrated photonics were recently [added as a technology of concern](https://www.sdxcentral.com/news/photonics-grabs-priority-of-white-house-security-strategy-over-data-infrastructure/) to the U.S. government’s National Security Science and Technology Strategy, which identifies critical national security technologies.