Silicon photonics market projected to reach $17.92 billion by 2035

Silicon photonics is transitioning from a niche semiconductor application to the backbone of high-capacity streaming infrastructure. As video workflows integrate more AI-driven processing and 8K distribution, traditional copper interconnects hit physical limits in heat and throughput. By shifting data movement to light-based signals on silicon chips, operators can scale density without a proportional spike in power costs. This shift is critical for the next generation of content delivery networks (CDNs) and cloud-based playout systems that require near-zero latency. Watch for the commercial adoption of 1.6T transceivers in mid-2026 as a sign of this technology reaching mainstream scale.

The push toward silicon photonics is accelerating as major chipmakers and networking giants solve the 'copper cliff'—the physical limit where electrical wiring can no longer support AI-scale data rates. In February 2026, Cisco unveiled its Silicon One G300, a 102.4 Tbps switching silicon designed to power massive data center clusters. According to Cisco, the G300 uses integrated 200 Gbps SerDes to enable 1.6T Ethernet ports, potentially improving energy efficiency by 70% when combined with new liquid-cooled system designs. This follows Intel's June 2024 demonstration of a fully integrated optical I/O chiplet, a prototype designed to move data at 4 Tbps while co-packaged directly with a CPU.

Market competition is shifting toward co-packaged optics (CPO), which integrates silicon photonics onto the same package as the ASIC or GPU. Per TrendForce reporting in September 2025, TSMC has overtaken Intel in silicon photonics patent filings, with plans to mass-produce CPO-based semiconductors by 2026. This aligns with NVIDIA’s roadmap; at GTC 2025, NVIDIA announced its Spectrum-X Ethernet Photonics switches. These systems use internal silicon photonics to eliminate bulky external digital signal processors (DSPs), which NVIDIA claims can improve power efficiency by 3.5x and increase network resiliency for large-scale GPU clusters.

Financial commitments to the technology are reaching multi-billion dollar levels. In March 2026, NVIDIA announced dual $2 billion strategic partnerships with Coherent Corp. and Lumentum Holdings to secure laser and optical manufacturing capacity. These investments reflect an industry-wide move to stabilize a supply chain that has faced integration and packaging challenges. According to LightCounting in August 2025, 800G transceiver deployments are already surging, with the broader pluggable optics market expected to reach $12 billion by 2026 as 1.6T technologies begin early-stage volume shipments.