SPIE Europe 2026: Society presents positive Photonics Industry Report

Drawing on data from the 2026 SPIE Global Industry Report, Tuesday’s Photonics Marketplace presentation at the Palais de la Musique et Congrès, Strasbourg, reviewed the scale, growth, and global economic reach of the photonics industry. Key recent historic findings were that the 2024 industry value was around $381 billion in photonics components sales, which together support “multi-trillion-dollar markets and service businesses”. The Report also analyzes long-term employment and growth trends that continue to outpace global GDP.

SPIE’s Director of Technology Outreach Amy Hanlon explained, “SPIE has been quantifying this whole value chain consistently since 2012, and this allows us not just to look at photonics components, but how they scale through the global economy.”

“In 2024, core photonics component manufacturing reached $381 billion in revenue. That is growing at 10% year-over-year. The $381 billion base supports approximately $2.7 trillion in wider photonics-enabled markets, such as manufacturing equipment, medical systems, and communications hardware, for example,” she said.

Those markets, in turn, support roughly $20 trillion in photonics-enabled services, which is of the order of 20% of the entire global GDP. Photonics is not a niche in the technology sector. “As we move downstream in the value chain, the economic impact multiplies by seven times for each of these different layers,” said Hanlon. 

In 2024, the global photonics industry reached a record scale. SPIE identified 5417 companies and nearly 1.5 million people working in the field. Hanlon continued, “Over the past 12 years, across all regions, combined photonics, revenue has grown at about 6.3% annually, while global GDP has grown at only half that rate at 3.2%.”

The majority of the increase in company count for 2024 has been in firms below $50 million in annual revenue, and especially in the $1 million to $10 million range. However, the company count and the revenue are distributed very differently. Most of the firms are small, with below $50 million in revenue, and yet they only account for a total of 4% of the global photonics revenue. By contrast, just 313 companies, or 5.8%, generate 87% of the revenue. 

Productivity variation

Where in the world is this growth coming from? The majority of photonic component producers have headquarters in Asia. In 2024, 56% of the 5417 companies were headquartered in Asia, compared with 22% in Europe and 21% in the North America. The largest share of photonics revenue is also generated in Asia and that this has been true since 2012.

Hanlon then looked at how regional performance varies, explaining that a useful indicator is the revenue figure per employee. “Two countries that we can consider are the US and China, by comparing the distribution of revenue per employee for photonics manufacturers headquartered in each country. The US median 2024 revenue was $183,000 per employee, which is considerably larger than China, which was $77,000. This gap points to a fundamentally different operating models,” she said.

China has been implementing a series of industrial policies, mostly notably “Made in China” in successive five-year plans. These were intended to accelerate manufacturing automation and advanced production capacity. 

But although the US median revenue per employee remains much higher, China’s performance has been growing rapidly in recent years. This trend is consistent with sustained investment in a more automated higher-volume production. China’s policies do appear to have supported expansion in manufacturing automation and capacity.

East Asian trends

Hanlon told the audience, “We considered regional photonics revenues in billions of dollars, going from 2012 through 2024. Japan remains the largest anchor of global photonics revenue, but growth momentum is clearly shifting within East Asia towards China, South Korea, and Taiwan. In 2012, China, South Korea, and Taiwan are relatively minor contributors to overall photonics revenue. But they've grown quite significantly in the intervening years to be a significant portion of the revenue by 2024.” 

But financial performance does not tell the whole story especially when currency conversions can lead to misleading implications in relation to regional and international performance comparisons, Hanlon explained, adding that photonics company employment figures can more accurately reflect growth.

“Regional employment growth has been mixed, but it is trending upwards over the life of our survey,” she said. “In 2024, we saw remarkable jumps – about 20% year-over-year for companies, headquartered in China, with jobs at Japan-headquartered companies growing at a more restrained, but still strong 7.6%. Firms headquartered in Taiwan also exhibited noticeably higher job growth in 2024 compared with 2023.”

Hanlon summarized regional performances in 2024 thus: “The geography of the company count and the geography of revenue are not the same. Japan and the United States account for more than half the photonics revenue globally, while China has by far the largest company counts. Another interesting thing that happened in 2024 was that for the first time, China moved ahead of South Korea in revenue share.”

Forecast

Moving on to the Global Photonics Industry Report’s forecast, Hanlon said, “At SPIE we every year we look at the photonics component industry as it is, but we also perform a quantitative prediction of where the industry will go, not just for 2025, but also for 2026. 

“The takeaway here is that we're projecting a 7.5 per cent increase for 2025 and we are projecting 20 per cent growth from 2024 to 2026. This is going to account for a baseline to high forecast of $410 billion to $421 billion; and from $460 billion to $495 billion in 2026 [ranges]. SPIE is also putting together numbers for the photonics-enabled markets and services. We're projecting over an 8% gain over 2024 for the photonics-enabled markets.”

In conclusion, Hanlon remined the audience, “This outlook is not a back-of-the-envelope forecast; it’s based on analyst projections for 355 companies, which represent about 80% of the core photonics revenue. The median company in the forecast had six to seven analysts’ projections. There’s a considerable amount of data behind these projections, even though there is some uncertainty shown in the difference between baseline forecasts and high-side forecasts.”