AI demand to fuel 23x silicon photonic growth by 2030

Silicon photonic-specific revenue will surge 23-fold between 2024 and 2030, driven by AI demand, according to a China Insights Consultancy (CIC) report commissioned for Chinese laser developer Yuanjie Semiconductors' Hong Kong IPO. The report projects global AI capex will total $4.7 trillion from 2026 to 2030, and the global laser chip market will grow at a 44.1% CAGR from $2.6 billion in 2024 to $22.9 billion in 2030, with silicon photonics capturing a 63.7% market share by 2030.

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.