Australia’s PIC market poised for rapid growth
Australia’s photonic integrated circuit (PIC) market is set to expand rapidly as demand increases across telecommunications, data centres, defence and emerging computing applications.
Valued at USD 381.6 million in 2024, the market is projected to reach USD 1.77 billion by 2033, growing at a compound annual growth rate (CAGR) of 16.59% between 2025 and 2033. The growth reflects mounting pressure on traditional electronic systems as data volumes rise and energy efficiency becomes a critical concern.
Photonic integrated circuits, which integrate optical components such as lasers, modulators and waveguides onto a single chip, offer ultra-high-speed data transmission, lower latency and reduced power consumption by using light rather than electrical signals. These advantages are driving their adoption as core building blocks of next-generation digital infrastructure.
Telecommunications providers in Australia are increasingly evaluating PIC-based solutions for advanced optical networks, including 5G backhaul and future 6G systems. Pilot deployments have demonstrated improvements in bandwidth efficiency and energy performance, supporting the case for wider adoption as the country continues to invest in fibre-optic and high-speed connectivity infrastructure.
Data centres represent another major growth area. As hyperscale and edge data centres expand nationwide, operators are turning to photonic integrated circuits to enable scalable optical interconnects between servers, switches and storage systems while managing power and cooling constraints.
At the same time, growing interest in artificial intelligence and high-performance computing is driving exploration of photonics-based computing and optical interconnect technologies capable of supporting massive data movement at low latency.
Australia’s research institutions and universities continue to play an important role in advancing integrated photonics, particularly in silicon photonics platforms. Collaboration between academia and global photonics companies has supported progress in integration density, optical performance and manufacturability, helping bridge the gap between research and commercial deployment.
Beyond commercial markets, PICs are also gaining traction in defence, sensing, lidar and secure communications, where compact, robust and high-performance optical systems are essential.
With strong growth forecasts and expanding application areas, photonic integrated circuits are positioned to play a strategic role in Australia’s digital future, supporting faster, more energy-efficient and more resilient communication and computing systems over the coming decade.
