Silicon photonics firms warn Europe lacks foundry infrastructure and scale-up capacity needed for commercialization success and market growth globally.
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According to a wide-ranging survey of 500 industry executives in five countries (UK, USA, Netherlands, Germany, and Spain), there are major gaps in the infrastructure needed to fulfill the commercial promise of silicon photonics. The research, which was released this week by the University of Southampton’s CORNERSTONE Photonics Centre for Innovation, identified that the greatest obstacle to moving silicon photonic chips from laboratory prototypes to market-ready products is manufacturing access. The survey also highlighted that the industry is at a crossroads. Silicon photonics (the combination of photonic and silicon technologies) has been a vital part of technological strategies globally. It has an enormous potential to address the power consumption of artificial intelligence and improve the capabilities of quantum computing. Despite its strategic importance, companies designing these chips face several challenges that make them insurmountable. 67% of respondents to the survey indicated that manufacturing access was the key barrier to commercialization of these chips, citing slow turnaround times in foundry services and restrictive licensing agreements as barriers that continue to exist.
The financial implications of these barriers are also significant. Over 30% of companies reported delays in their product roadmaps at an average of $2.7 million in losses attributed to the delay. Equally concerning, nearly 50% of respondents indicated that they could generate commercial revenue 7-12 months sooner if they could reduce their prototyping time by just 25%, representing an enormous amount of potential economic value that remains untapped.
The timing of these findings coincides with intensified government action on chip security. This month, the European Union announced proposals for a new EU Chips Act 2.0 which aims to boost the technological resilience of Europe and make Europe independent in the semiconductor industry. However, current support structures are perceived by researchers to be inadequate. In the Netherlands, Germany and Spain, an average of 54% of respondents feel that current EU Chips Joint Undertaking does not adequately support silicon photonics companies and therefore any changes to existing legislation are likely to be welcomed by those companies.
The appetite from the UK government to grow silicon photonics is also apparent. Last week, the UK government published its AI Hardware Plan that explicitly notes that silicon photonics are essential to AI hardware development. In March £2 billion was committed to developing quantum capacity; 64% of respondents in the UK have said that their organizations are developing silicon photonics chips for quantum technologies, while 56% are creating them for AI hardware applications. However, there is an opportunity cost associated with the skills shortages. 42% of UK businesses reported that they have lost employees to other countries and 55% of people surveyed plan to live and work abroad. Industry experts believe there is a need for a UK-based pilot line to enable the transition from lab scale prototypes to fully commercial production on an industrial scale, which will assist to address this talent shortage.
Callum Littlejohns, Deputy Director of CORNERSTONE, emphasised the urgency: "The silicon photonics industry is on the cusp of landmark growth, yet barriers to scale-up must be urgently addressed. Without critical scale-up infrastructure, companies will hit a major roadblock to commercialization." The message is clear: without immediate action to address infrastructure deficits, Europe and the UK risk losing competitive advantage in a sector poised to define the next generation of semiconductor technology.
Business Honor is of the view that addressing Europe's silicon photonics infrastructure deficits represents a strategic imperative for achieving semiconductor sovereignty and commercialization acceleration.
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