Silicon Photonics In The Data Center: What A CMOS Exec Needs To Know

Silicon photonics is changing the data center as copper interconnects transition to optical solutions. Photonics is expected to replace copper for all interconnects in about five years. TSMC may move from zero presence to a leading position. Pluggable optics transceivers drive the main market for silicon photonics today. These standardized devices connect the electrical interface of a switch or server to fiber optics cables. They transmit data at higher bandwidth and lower power than the copper cables they replace, with key components including a laser, a CMOS chip with DSP functionality and high-speed SerDes, and a silicon photonics modulator chip. Google has used optical circuit switches with MEMS mirrors in its cloud infrastructure for years. The switches enable reconfiguration of top-level interconnects for redundancy, reliability and changing workloads across thousands of TPUs. Coherent increased its estimate of the optical circuit switch total addressable market to over 3 billion dollars after seeing larger customer interest. Nvidia and Broadcom announced ethernet scale-out switches using co-packaged optics in 2025 to reduce switching power. Several startups including iPronics, nEye and Salience are developing compact silicon photonics approaches for optical circuit switches, with some already sampling or shipping products. Coherent's 2025 investor presentation projects the pluggable optics market growing from 6 billion dollars in 2023 to 25 billion dollars in 2030, with most volume at 1.6 terabits per second and 3.2 terabits per second data rates. OMDIA forecasts the total optical components market reaching 25 billion dollars by 2030, up from 13 billion dollars in 2023. CignalAI predicts 31 billion dollars in 2029, with growth primarily from AI networking needs.