AI data center optical interconnect market to hit $144 billion by 2030, an over ten-fold increase from 2024 figures, according to new projections — silicon photonics expected to account for nearly two-thirds of revenue, driven by co-packaged optics

Intel co-packaged optics (Image credit: Intel) The global data center optical interconnect market is expected to reach $144.4 billion by 2030, up from $13.7 billion in 2024 — a 48.1% compound annual growth rate (CAGR) — according to a China Insights Consultancy (CIC) report commissioned by a Chinese laser-chip maker, Yuanjie Semiconductors, as part of its Hong Kong IPO filing. The report draws on data from LightCounting and interviews with industry experts. Of that future market, silicon photonics, the practice of manufacturing photonic chips from the same silicon material and mature CMOS foundry processes used for conventional semiconductors, is projected to account for 63.7% of revenue, its share climbing from 16.6% in 2020 as the industry shifts toward denser, more power-efficient designs like co-packaged optics.The moves that would turn those projections into reality are already well underway. Over the past year, the AI industry has invested more than $15 billion in co-packaged optics, photonic chips, higher-speed transceiver modules, and fiber, developing new integration techniques, acquiring photonics startups, and forming alliances among the biggest players. More recently, OpenLight and Tower Semiconductor placed OpenLight's photonic design kit inside Cadence's mainstream chip-design software. This step makes the laser-integrated 400G and 1.6T chips at the heart of co-packaged optics easier to design and bring to market. Etiido Uko is a news contributor for Tom's Hardware covering the latest updates in big tech and the PC industry. He is a mechanical engineer and senior technical writer with over nine years of experience in documentation and reporting. He is deeply passionate about all things engineering and technology, and is an expert in gadgets, manufacturing, robotics, automotive, and aerospace.