Glossary and definitions 2

Report scope 6

What we got right, what we got wrong                                 12

2020 – 2021 Silicon photonics – noteworthy news 14

Executive summary 18

Context 55

• General context
• Historical perspective
• Photons vs. electrons
• Building blocks
• Motivations for silicon photonics
• Comparison of silicon photonics to other PIC platforms

Market forecasts                         66

• General forecasts
• Long-term forecasts
• Datacenter forecasts

Market trends                                     94

• Optical communication
• 5G infrastructure
• LiDAR and Fiber Optical Gyroscope (FOG)
• E-noses
• Consumer healthcare
• Healthcare/Medical
• Computing

Market share and supply chain                                   150

• Players and market shares
• Supply chain
• Investments
• Research institutes

Technology trends                                          182

• Optical communication
• LiDAR
• Gas sensors and e-noses
• Consumer healthcare
• Healthcare
• Computing
• Lasers
• Manufacturing
• Packaging
• Materials

Reverse Costing^® – Structure, Process, and Cost analyses                  240

• Intel 100G PSM4 SiPh transceiver
• Intel 100G CWDM4 SiPh transceiver

Outlook                                                           243

• Roadmap for silicon photonics
• Conclusions

About Yole Développement                            247

MORE APPLICATIONS ARE EMERGING FROM THE SILICON PHOTONICS PLATFORM

Since the 1998 release by Bookham of the first product using the silicon photonics platform, the main application for silicon photonics (SiPh) has been optical communication. And after the 2008 release by Luxtera (now Cisco) of the first optical transceiver using silicon photonics, the silicon photonics optical transceiver market has grown to $581M, with almost 5M units shipped.

Because silicon photonics is a platform, numerous applications are possible and many have been proposed by research centers and universities. In 2020, two new applications reached the market.
Genalyte, a California company established by one of the co-founders of Luxtera, released systems for immunoassays based on silicon photonics elements. Also, KVH released fiber
optical gyroscopes (FOG) based on silicon photonics, intended for robotic car navigation.

Novel applications for silicon photonics are poised to further penetrate the market. In March 2021, Aeva, another California-based company, went public with an initial valuation
of $1.7B. The company’s goal: bring frequency modulated continuous wave (FMCW) LiDAR to the market with silicon photonics in order to serve autonomous driving. Also in March
2021, the American company Rockley Photonics announced its intention to go public in Q2 2021 at an initial valuation of $1.2B with an Apple-supported spectrophotometer project for smartwatches.

In addition to sensing for immunoassays, FOG, LiDAR, and consumer healthcare, other applications for silicon photonics include electronic noses, optical coherence tomography
(OCT), and cardiovascular diagnostic devices.
Computing could also benefit from SiPh through photonic computing and quantum computing, as well as optical interconnects in disaggregated datacenters, which will allow using light to connect the various elements of highperformance computing.

This Yole Développement Silicon Photonics 2021 report presents a complete analysis of the silicon photonics market up to 2026 with revenues, volumes, and average selling prices segmented by applications and technologies.

APPLE ENTERS SILICON PHOTONICS WITH ROCKLEY PHOTONICS

Apple started working with Rockley Photonics in2017 and has since become Rockley Photonics’slargest customer, with $70M of non-recurringengineering (NRE) commitment to date. Over2019 – 2020, Rockley Photonics had two maincustomers that accounted for 100% (2020) and99.6% of its revenue (2019). To date, RockleyPhotonics has received $359M in investments.

Rockley Photonics seeks to develop and produce photonic modules (based on silicon photonics) that can measure numerous biological parameters such as blood oxygen levels, lactate, alcohol, and glucose, among others. The project is known as a “clinic-on-the-wrist” and relies on a miniaturized spectrophotometer. Universities have previously demonstrated such spectrophotometers, but industrialization to the level of the Apple Watch could be a tough challenge.

With an estimated silicon photonics die price of $18, the module could be estimated at $45 and could fit a new, high-end $699 Apple Watch with healthcare functions. If the adoption rate of healthcare functions for smartwatches reaches 20% by 2035, the associated SiPh die market could reach $1.1B. By comparison, the 2020 silicon photonics die market for optical transceivers is estimated at $84M.

The difficulty of developing CPO (co-packaged optics) technology is in limiting the number of players that can move to the next level of optical communication.
This difficulty could be the reason why some silicon photonics players move to new applications. Also, the future of optical communication for silicon photonics is not limited to CPO. 5G optical transceivers are another application for silicon photonics.

This report presents an independent analysis of Rockley Photonics’ plans for consumer health applications.

INCREASED VARIETY AND DENSITY IN THE INDUSTRIAL LANDSCAPE

Three developments are evident in the silicon photonics industrial landscape: vertical integration, SPAC, and emerging foundry services.
In optical communication, the arrival of 51.2Tbps network switches by 2025 is expected to start a shift from pluggable optical transceivers to CPO technology. The high level of technological acumen required for CPO is limiting this technology to highly integrated companies such as Cisco, Intel, and Broadcom, all of which show a high level of readiness for CPO.

LiDAR and consumer healthcare benefit from a different development model which is based on NRE and IPO through a SPAC, providing huge amounts of cash for research and development.
For example, Apple recently announced a new $410M award for II-VI for the development of optical technology, on top of an initial $390M award in 2017.

Many foundries worldwide are interested in SiPh technology and offer manufacturing services. However, only a few are in large-scale volume production: Intel, which is #1 in volume market share and is manufacturing Si photonics dies internally, and TSMC, Luxtera/Cisco’s foundry partner since 2017. These are the key manufacturers, but there are many others proposing Si photonics either for R&D or low-volume production. As more applications arrive to fuel the Si photonics market, we are likely to see new foundries announcing volume production in the next couple of years.

This report furnishes a thorough analysis of the silicon photonics industrial landscape, including players, supply, acquisitions, partnerships, and market share.

Acacia, Accton, Aeva, AIO Core, Alibaba Cloud, Alpine Optoelectronics, Amazon, amf, ams, Analog Photonics, Anello, AOI, Aryballe, AT&T, Axalume, Ayar Labs, Bra-Ket Science, Broadcom, Broadex, Caliopa, CeliO, Ciena, Cisco, Cloudlight, Elenion, Ericsson, Facebook, Fiberhome, ficonTEC, Finisar, Fujitsu, Fujitsu Optical Components, Genalyte, GlobalFoundries, Google, Hengtong, HPE, Huawei, Hyperlight, IBM, II-VI, Infinera, InPhi, Intel, iPronics, IQE, Iris Light Technologies , Juniper, Kaiam, KVH, Leoni, Lightelligence, Lightmatter, Lightwave Logic, Lumentum, Luminous, Lumiphase, Luxtera, MACOM, Microsoft, Molex, NEC, NeoPhotonics, Nokia, NTT, NTT Electronics, NXP, Orange Labs, POET, Pointcloud, Polariton Technologies, PsiQ, QuiX, Ranovus, Rockley Photonics, Scintil Photonics, Senko, Sentea, ShinEtsu, Sicoya, SiLC, Silex, Silterra, Skorpios, Skywater, SOITEC, Sumitomo Electric, TE Connectivity, Teramount, Teraxion, TowerJazz, TSMC, Tundra Systems Global, VTT, Xanadu and more.