Leading at Light Speed: What Makes Photonics Leadership Different

The semiconductor industry stands at an inflection point that happens perhaps once in a generation.  

After decades of predictable progress, the physical limits of silicon are forcing a complete rethinking of how we build computing systems. Photonics has moved from academic curiosity to industrial necessity. 

But this transition creates a leadership problem that few companies have solved: how do you lead an industry where the executives don’t exist yet? 

Why Physics Forces the Industry Toward Light

The mathematics are unforgiving. As Splunk notes, “as physical and economic limitations are reached, the pace predicted by Moore’s Law is slowing,” prompting the tech industry to explore new technologies and computing paradigms. InformationWeek reports that “incremental benefits traditionally derived from transistor scaling are dwindling,” with industry experts predicting a transformation rather than an end to Moore’s Law. 

The move to photonics happens because of thermodynamics. Semi Engineering details how heat dissipation and bandwidth bottlenecks make optical solutions the only viable path forward, with photonics offering “energy-efficient, scalable” alternatives to electronic interconnects. When electrons move, they generate heat. Light doesn’t have this problem. 

The physics imposes a hard constraint, however: silicon alone cannot produce lasers. Silicon has an indirect bandgap, preventing efficient light emission. This forces the industry toward III-V compound semiconductors like indium phosphide (InP) and gallium arsenide (GaAs), which have direct bandgaps enabling laser operation. But InP substrates are currently available in sizes from 50 mm (2 inches) to 100 mm (4 inches), with a 150 mm (6-inch) version only recently becoming available, while GaAs wafers tend to be 150mm (6 inch) at largest in commercial production, compared to silicon’s standard 300mm (12 inch) wafers. This size difference means heterogeneous integration or co-packaged optics becomes mandatory; you cannot build a complete photonic system on silicon alone. CTOs must manage two incompatible material systems and integration processes, doubling both technical complexity and supply chain risk. 

The financial signals reinforce this inevitability. McKinsey’s 2022 analysis breaks down the photonics market into components (lasers, sensors, optical chips) and systems (products using those components), with component revenues growing at 10% annually versus 6% for systems, meaning photonics content increases across all applications. The report notes “about 30 photonics component companies with revenues greater than $1 billion” globally. LED lighting represents 32% of the 2024 photonics market share in applications like lighting and backlighting, but these are mature, lower-margin products compared to advanced silicon photonics transceivers, ultrafast lasers, and VCSELs experiencing double-digit annual growth. The money follows physics. 

Regional Developments and Global Implications

United States: First-Mover Standards

The American approach to photonics centers on manufacturing scale and system integration. Intel has shipped 8 million photonic chips with 32 million integrated lasers, with OCI implementation supporting up to 4 terabits per second (Tbps) bidirectional data transfer. 

The real power move comes from NVIDIA, however. NVIDIA is adopting TSMC-Broadcom CPO in 2025 GB300 chips, which will set de facto industry standards. When the AI leader makes an architectural choice, every competitor has to respond. This creates a cascading effect on leadership requirements: suddenly every semiconductor company needs executives who understand co-packaged optics, even if they’ve spent their careers in pure silicon. 

Manufacturing maturity and system integration expertise give U.S. companies advantages, but political tensions with China fragment research collaboration and create parallel technology tracks. Every executive decision now carries geopolitical weight. 

Europe: Building Scale Through Consolidation

Europe’s photonics story combines world-class technical capability with the hard work of building scale. The market grew from €124.6 billion (2022) to a projected €175 billion (2027). What makes this growth notable is how European companies are solving the scale challenge through consolidation. 

Between January and June 2025, EPIC recorded 125 transactions worldwide. European companies led 50 of these acquisitions. Germany drove the most activity with 14 transactions, France followed with 11, Sweden contributed 7, and the UK added 5. The Netherlands, Italy, and Switzerland each recorded 3 acquisitions. These companies are actively building the scale to compete with U.S. and Asian manufacturers while preserving Europe’s materials science and precision optics expertise. 

ZEISS established a new strategic business unit with €200 million in annual revenue and nearly 900 employees across 6 countries, with ZEISS Photonics & Optics now operating in Germany, Hungary, the UK, the US, India, and China. What’s happening in Europe shouldn’t come as a surprise: European photonics companies are combining their technical expertise with global manufacturing footprints. The M&A activity aims to create larger European players that can compete globally in specialized components while partnering for system integration.  

Rather than trying to replicate the vertically integrated models elsewhere, Europe is building on its strengths in materials science, precision manufacturing, and advanced optics. 

China: Parallel Construction

China is building a complete alternative system. CHIPX produces 6-inch lithium niobate wafers with 110 GHz bandwidth, built despite U.S. export controls.  

China’s photonics development emphasizes lithium niobate modulators, silicon photonics foundry capacity, and complete vertical integration from materials to packaged systems. The Chinese photonics strategy aims for self-sufficiency across the entire value chain, contrasting with Western models that rely on specialized suppliers and international partnerships. 

Chinese economists and academics have framed photonics as a technology that could allow China to “change lanes and overtake” the United States in emerging technology areas, with Xi Jinping chairing a February 2023 Politburo study session focused on “basic research for self-reliance in science and technology“—language associated with reducing China’s vulnerability to foreign technology controls. making this a national security priority rather than a commercial decision. 

Optics Valley hosts 5,000+ high-tech companies, targeting self-sufficiency within 4 years in a market closed to Western companies. This creates an uncomfortable choice for Western executives: enter the market knowing technology IP might be compromised, or miss what will become the world’s largest photonics market. There’s no good answer, only trade-offs. 

Asia-Pacific: Pragmatic Partnerships

Japan, Taiwan, and India are taking a different approach by combining strengths rather than building everything domestically. Japan committed $25.7 billion (0.71% of GDP) to semiconductor development. TSMC opened its first overseas R&D facility in Japan, combining Japanese materials expertise with Taiwanese manufacturing. 

India offers up to 50% capital support for photonics fabs, plus leverages 20% of global chip designers. Samsung invested $170 million in Yokohama as part of a “China plus one” approach. 

The Asia-Pacific approach combines Japanese materials expertise (optical glass, specialty crystals), Taiwanese advanced manufacturing, and Indian design talent. Japan leads in compound semiconductors and optical materials, Taiwan dominates volume manufacturing, and India provides chip design engineering capacity. This distributed model creates interdependencies that strengthen the region’s position but also create vulnerabilities if geopolitical tensions disrupt partnerships. 

Leadership Implications of Fragmentation

The geographic divide in photonics development creates challenges for executives. Different regions pursue different technology standards (U.S. CPO versus Chinese alternatives), forcing companies to maintain duplicate supply chains for different markets, which doubles operational complexity. Talent mobility becomes restricted when engineers cannot freely move between regions due to export controls and visa limitations. Government support varies wildly by region, creating competitive imbalances where some companies receive billions in subsidies while others compete on purely commercial terms. The result is that no unified global market exists anymore. Photonics executives must operate in a world where the rules, the standards, and the competitive dynamics differ by geography. Success requires understanding not just the technology but also the policy environment in each market. 

Global 10-Year Outlook (2025-2035)

Market Growth and Scale

Market projections vary across analysts. Mordor Intelligence projects the photonics market will grow from $1.75 trillion in 2025 to $2.39 trillion by 2030, while MarketsandMarkets forecasts growth from $1.09 trillion in 2025 to $1.48 trillion by 2030. The variance reflects how difficult photonics markets are to forecast: the category spans everything from mature LED lightbulbs to emerging quantum computing systems, with radically different growth trajectories. Analysts must decide whether to count complete LED lighting systems or just the photonic components, how to categorize hybrid products that combine photonics with electronics, and how to project adoption rates for technologies like co-packaged optics that didn’t exist in volume production five years ago.  

This forecasting difficulty compounds the leadership challenge. Executives must commit billions in capital to technologies with decade-long development cycles while hitting quarterly targets, all while working from market projections that can vary by nearly a trillion dollars. 

Capital deployment decisions based on these uncertain projections are happening right now, in boardrooms where executives are betting their careers on photonics transitions. 

Near Term (2025-2028): Foundation Building

The physics makes co-packaged optics (CPO) inevitable. Traditional pluggable optical modules create 22 decibels of signal loss on 200 Gb/s channels, requiring 30W per port to compensate. CPO eliminates this by placing optical conversion directly next to the switch ASIC, cutting power consumption by 3.5x. NVIDIA’s 2026 deployment in GB300 chips sets the standard every competitor must match. The bandwidth progression tells the story and explains why this progression is as inevitable as it is: 1.6 Tb/s in 2025, scaling to 6.4 Tb/s by 2027 as TSMC’s COUPE platform matures. 

Commercial optical I/O chiplets will likely arrive between 2026 and 2028. Ayar Labs’ TeraPHY will deliver 8 Tb/s using UCIe standard packaging, enabling adoption across multiple compute architectures. OpenLight’s heterogeneous integration with indium phosphide enables 200-400 Gbps modulators per waveguide, far exceeding silicon photonics’ 200 Gbps ceiling. First customers will enter production in late 2025, generating royalty revenue by 2026. 

LiDAR costs will continue to collapse while performance improves. Entry-level automotive LiDAR drops to $200 in 2025, down from thousands of dollars five years earlier. SPAD chip technology delivers 20%-30% cost reductions while pushing resolution from 300,000 points per second to 24 million points per second. Range extends from 150 meters to 300 meters. The automotive LiDAR market grows from $861 million in 2024 to $3.8 billion by 2030, driven by Chinese OEMs standardizing LiDAR across vehicle lines. Hesai delivered over 20,000 LiDAR units for robotics in a single month in December 2024, showing how automotive photonics capabilities enable adjacent applications. 

Photonic integrated circuit yields also continue to improve. STMicroelectronics begins production of silicon-germanium PICs for AWS in late 2025, with pluggable transceivers integrated into hyperscale infrastructure. Manufacturing moves from boutique to volume production. 3.2 Tbps transceivers arrive by 2026, tracking AI accelerator performance requirements. Every new GPU generation demands matching transceiver capabilities. 

For CEOs, the timing decision becomes existential during this “foundation building” phase between 2025 and 2028. Move to CPO in 2025-2026 and risk immature technology. Wait until 2028 and watch competitors capture market share using superior power efficiency. The window for positioning closes fast because once NVIDIA’s GB300 ships in volume, customer expectations change instantly. 

Mid Term (2028-2032): Architecture Convergence

Quantum photonics transitions from laboratory to commercial deployment during the “architecture convergence” phase. The quantum photonics market grows from $850 million in 2025 to $3.78 billion by 2030, with telecom and data center operators driving 35.89% CAGR growth. PsiQuantum partners with GlobalFoundries to develop million-qubit systems by 2027, leveraging existing photonics manufacturing infrastructure. QBoson breaks ground on the world’s first photonic quantum computer factory in Shenzhen, targeting dozens of units annually. 

The advantage of photonic quantum computing, room temperature operation, continues to drive evolution during this time period. Unlike superconducting qubits requiring near-absolute-zero cooling, photonic qubits function at ambient temperature. This changes the economics completely. Xanadu’s Borealis system demonstrates quantum advantage with 216 squeezed-state qubits, completing tasks in 36 microseconds that would take supercomputers 9,000 years. Financial services will likely adopt it first, using quantum sampling for risk modeling and portfolio optimization. Quantum chemistry applications will likely follow for drug discovery and molecular design. 

Optical computing moves from concept to product during this phase, too. First shipments of optical processors arrive around 2027-2028, with nearly 1 million units in use by 2034. MIT demonstrates photonic processors completing neural network computations in under 500 picoseconds with 92% accuracy, matching traditional hardware. The applications target specific workloads: matrix multiplications, Fourier transforms, pattern matching. Photonic accelerators excel at these operations while consuming less power than electronic alternatives. 

FMCW LiDAR enters automotive markets after 2028, initially likely only in low volumes. Advances in photonic integrated circuits enable chip-scale LiDAR below $100 per unit at volume, opening further consumer applications during this phase. The technology could enable windshield-integrated units and body panel installations in packages smaller than smartphones. 

CTOs face architecture decisions with decade-long consequences during the “architecture convergence” phase between 2028 and 2032. Hybrid systems combining analog optical computing, digital electronic processing, and photonic interconnects become standard for AI workloads. But which ratio of optical to electronic computation? How much processing happens in the photonic domain versus digital? These choices determine product performance and manufacturing costs for years. 

Additional Consideration: AI Infrastructure Requirements

The energy crisis forces photonics adoption in the first two phases. Data center electricity consumption will reach 945 TWh by 2030 and could hit 1,700 TWh by 2035, representing 4.4% of global electricity demand in the high-growth scenario. Goldman Sachs projects a 165% increase in data center power demand by 2030, with facilities growing from 30MW ten years ago to 200MW as normal today. 

Photonics will reduce data center energy consumption by over 50% by 2035 through co-packaged optics offering 3.5x lower power consumption than pluggable transceivers. 3D-integrated photonic-electronic transceivers achieve 120 femtojoules per bit, a 10x improvement. Celestial AI’s photonic fabric reduces energy per bit for data movement from 55 picojoules to 13 picojoules, delivering fourfold power savings that translate directly into lower costs and higher GPU utilization. 

Every hyperscale operator knows these numbers. The question becomes which photonics vendors can scale fast enough to meet demand. CFOs must model returns on infrastructure that doesn’t exist yet, using energy cost assumptions that change with policy decisions. 

Long Term (2032-2035+): System Integration

Fully integrated photonic-electronic systems emerge where most sensing, communication, and some computation happen optically. The quantum photonics market reaches $17.4 billion by 2035 at 32% CAGR, with photonics claiming major share post-2028 as quantum computing matures. Photonic quantum computing alone grows from $1.1 billion in 2030 to $7 billion by 2036. 

Extreme environment applications will likely mature during this “system integration” phase. Photonic systems for ultraviolet sensing, terahertz detection, space deployment, and defense use cases will likely move from prototype to production. RF-photonics may enable photonic radar that combines optoelectronic generation and detection of RF signals. Environmental monitoring may expand with distributed photonic sensors for agriculture, water quality, and pollutant detection. The industrial Internet of Things will likely adopt photonic sensing because of superior noise immunity and bandwidth. 

Materials advances will continue to accelerate throughout the period, too. Thin-film lithium niobate (TFLN) may gain commercial traction for high-performance modulation. Two-dimensional materials will likely enter photonic devices. Novel dielectric platforms may reduce optical losses. Heterogeneous integration may combine III-V materials with silicon, photonic layers with electronic layers, creating 3D stacked systems that would have been impossible with either technology alone. 

Hybrid architectures combining analog, digital, quantum, photonic, and neuromorphic computing will require new transducer technologies for interconnection. This convergence means CTOs can no longer specialize in a single computing paradigm. The winning architectures will be hybrids, and the leaders who understand the interfaces between these technologies will command premium compensation. 

Global Outlook: Enabling Factors and Constraints

Integration challenges will persist throughout all three phases. Photonic and electronic components require different fabrication processes, temperatures, and materials. Coupling losses between optical and electronic domains waste energy. Thermal drift affects optical phase, requiring active stabilization. And alignment tolerances measured in nanometers complicate manufacturing. 

Standardization will become even more critical as volumes increase. Test methodologies, packaging formats, interface protocols, and reliability metrics will need industry agreement. Without standards, customers will face vendor lock-in and integration nightmares. The companies that influence standards early, however, will capture disproportionate value. 

Manufacturing yield curves will continue to determine commercial viability throughout all three phases, too. Photonic device yields lag electronic circuits by years because the physics is less forgiving. Optical losses accumulate. Fabrication defects scatter light. The transition from research-grade yields to consumer-grade manufacturing reliability spans this entire decade. 

Cost reduction pathways will vary by application as well. Data center photonics benefits from volume production and semiconductor integration. Quantum photonics will remain expensive due to specialized components and low volumes. LiDAR, however, may achieve consumer pricing through chipification and VCSEL arrays. Medical imaging photonics may trade cost for performance during this period because healthcare budgets tolerate premium pricing for capability. 

Leadership Implications Across the Global Timeline

The 2025-2028 period requires CEOs to make commitment decisions without perfect information. CPO adoption, quantum investment, optical computing R&D all demand capital now for returns years later. Boards want quarterly results. Technology transitions take decades. The tension is unresolvable, only manageable. 

CTOs must maintain technical depth across incompatible domains while making architecture decisions that lock in for five-year product cycles. The 2028-2032 convergence of quantum, optical, and neuromorphic computing means today’s specialists become obsolete. CTOs need breadth more than depth, synthesis more than expertise. 

CFOs face capital allocation across technologies maturing at different rates. Photonic interconnects pay back in three years through energy savings. Quantum computing might not generate revenue until 2030. How do you balance portfolios when the timing varies by half a decade? The financial models break because the assumptions change faster than the products ship. 

Every leadership team confronts the same question at different points in this timeline: when do we commit capital to technologies that haven’t proven commercial viability? Too early means burning cash on immature products. Too late means competitors own the market. The window for optimal timing spans perhaps 18 months, and you only know you got it right three years later. 

The geographic fragmentation compounds every decision. U.S. CPO standards, Chinese quantum investments, European materials expertise, Asian manufacturing scale. No single region provides complete coverage. Executives must maintain presences in markets that might become inaccessible due to export controls or geopolitical tensions. The redundancy costs money but the concentration risks the company. 

Photonics Applications: Compute, Data, and Sensing

Data Center and Computing Infrastructure

The primary photonics application remains optical interconnects for data centers and AI accelerators. Co-packaged optics, silicon photonics transceivers (scaling from 800G to multi-terabit), and optical switching fabrics address the bandwidth and power consumption bottlenecks in hyperscale computing. These applications drive the majority of executive hiring and R&D investment. Quantum photonics for computing emerges as a parallel track, with room-temperature operation providing advantages over superconducting qubits. 

Sensing and Mobility Applications

LiDAR for autonomous vehicles represents a distinct market with different economics. Costs dropping from thousands to $200 per unit enable mass automotive deployment. Chinese OEMs are standardizing LiDAR across vehicle lines, driving volumes that dwarf data center applications. Industrial and medical sensing (environmental monitoring, agricultural spectroscopy, medical diagnostics) create additional billion-dollar markets with photonics offering superior noise immunity and bandwidth compared to electronic sensors. 

Success in this timeline requires comfort with uncertainty at a level most executives find uncomfortable. The technologies will work, eventually. The markets will develop, somewhere. The timing and sequence remain genuinely unpredictable. Leadership teams that can maintain direction while adapting tactics quarterly will capture disproportionate value. Those requiring certainty before commitment will watch from the sidelines. 

Global Executive Leadership Challenges

CEOs: Managing Technology Discontinuity

NVIDIA’s adoption of CPO in its 2025 GB300 chips sets the de facto standard for the industry. When the AI leader makes an architectural choice, every competitor must follow or risk obsolescence. The timing challenge for CEOs is severe: move too early and burn capital on immature technology; move too late and cede the market to first movers. 

Japan’s $25.7 billion commitment and individual companies investing hundreds of millions changes competition dynamics. CEOs at smaller photonics firms face existential questions about whether they can compete against sovereign capital. 

GlobalFoundries’ ecosystem spans Broadcom, Marvell, Cisco, and Nvidia, requiring CEO-level relationship management. The partnership complexity in photonics exceeds traditional semiconductors because the technology crosses traditional industry boundaries. 

Previously separate fields (quantum, neuromorphic, photonic) now require unified planning. CEOs need technology fluency at a level that goes beyond reading analyst reports. They need to make architecture decisions that their companies will live with for decades. 

CTOs: Bridging Incompatible Domains

Silicon photonics, III-V materials, and TFLN each require different knowledge bases and supply chains. CTOs in photonics companies need depth in multiple material systems, a rare combination. Most engineers specialize; photonics CTOs must generalize across incompatible domains. 

The architecture decisions are unforgiving too. Choosing between immediate CPO implementation versus waiting for quantum photonics maturity determines product roadmaps for the next five years. Get it wrong and the company might not survive. 

Standards battles create another headache. Should you bet on proprietary solutions or push for industry standards when no clear winner exists? CTOs make these calls without perfect information, knowing their careers depend on being right. 

R&D allocation presents a temporal paradox: 15-year development cycles versus 2-year product roadmaps. How do you fund research that won’t generate revenue for a decade while hitting quarterly targets? 

CFOs: New Economics of Light

Data centers scaling from 30MW to 200MW requires billions in capital. CFOs must model returns on infrastructure that doesn’t exist yet, using energy cost assumptions that change with policy decisions. 

The 50% power reduction from photonics changes total cost of ownership calculations. CFOs must quantify these savings and convince boards to invest before the savings materialize. The math is straightforward; the timing is not. 

Government funding adds complexity as well. Securing portions of EU or U.S. CHIPS Act funding or India’s 50% capital support requires dealing with bureaucracy while competitors move faster. CFOs become part grant writer, part diplomat. 

With 30+ companies over $1 billion revenue, M&A pricing becomes intricate. How do you value a company whose core technology might be obsolete in five years or might become the industry standard? 

Boards: Governance Gaps

Most board members don’t understand why quantum-neuromorphic-photonic convergence matters at the business level. This creates a knowledge asymmetry where management can’t get meaningful guidance on the most important decisions. 

The geographic split (China’s parallel construction versus U.S. standards versus European specialization) requires boards to understand geopolitics as much as technology. Few board members have both skill sets. 

Leadership transitions at major photonics companies signal consolidation. IPG Photonics replaced CEO Eugene Scherbakov with Mark Gitin from MKS Instruments in June 2024. Lumentum replaced longtime CEO Alan Lowe with Michael Hurlston from Synaptics in February 2025. Boards must decide: build, buy, or partner? Each path requires different leadership capabilities. 

The time horizon mismatch is perhaps the hardest challenge. Quarterly earnings pressure versus decade-long technology transitions creates incentive structures that penalize the right long-term decisions. 

Finding Photonics Leaders

The talent scarcity is acute and decades-long. Companies need executives with business acumen who also have strong technological depth, a combination that’s hard to find. The global search requirement is significant: companies recruit from China, Romania, Russia, the U.S., Germany, France, the UK, India, and elsewhere for single leadership teams. This creates cultural integration challenges on top of technical ones. 

Retention is hard, too. Founder-to-professional CEO transitions are happening across the industry, often poorly. Photonics executives get recruited by AI companies, semiconductor firms, and venture capital. Everyone wants someone who understands the light-based future. 

The industry faces a structural shortage as well. Over 330 R&D vacancies appeared in the first half of 2025 alone. When even technical positions are scarce, finding executives with both technical depth and business sophistication becomes exponentially harder. 

Stanton Chase’s Executive Search Services for Photonics Companies

Stanton Chase’s partner-led model ensures that senior consultants with decades of technology experience actually execute the search rather than delegating to junior associates. In photonics, where the distinction between CPO and pluggable optics might determine a company’s survival, surface-level understanding isn’t enough. 

Our Search+® methodology builds detailed leadership profiles based on business needs and objectives rather than generic job descriptions. For photonics companies, this means identifying executives who can operate at the quantum-neuromorphic-photonic convergence point: people who exist in extremely limited numbers.  

With over 70 offices across 45 countries, we access talent pools spanning fragmented photonics geography. When a client needs someone who understands TSMC’s manufacturing processes, Japanese materials science, and U.S. market dynamics, the search must be genuinely global. 

What separates Stanton Chase’s approach is understanding what makes photonics leadership different. Traditional semiconductor executives often struggle with materials complexity. Pure optics researchers lack commercial instincts. Software leaders underestimate manufacturing challenges. Photonics demands all three simultaneously. Companies that solve the leadership problem first will capture disproportionate value in the market taking shape right now. 

About the Author

Jan-Bart Smits is a Managing Partner at Stanton Chase Amsterdam. He began his career in executive search in 1990. At Stanton Chase, he has held several leadership roles, including Chair of the Board, Global Sector Leader for Technology, and Global Sector Leader for Professional Services. He currently serves as Stanton Chase’s Global Subsector Leader for the Semiconductor industry. He holds an M.Sc. in Astrophysics from Leiden University in the Netherlands.   

David Harap is a Managing Director at Stanton Chase Austin, bringing over 25 years of executive search experience to his role. He has successfully placed hundreds of senior executives and functional leaders across various industries. A Cornell University graduate and Father Kelly Scholar, David lectures at the University of Texas at Austin. He is a certified Ambassador for Hofstede Insights, bringing unique insights on organizational culture to his work.