Link: https://substack.com/inbox/post/178842219
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Achieving co-packaging technology for photons and electronics, chip-level integration and wafer-scale mass production of photonic quantum chips – I believe this is a world first. SJTU Prof. Jin Xianmin.
China's Photonic Chips End America's Integrated Circuit Dominance. Permanently?
The chip war situation has developed not necessarily to America’s advantage.
Godfree Roberts
November 15, 2025
The chip war situation has developed not necessarily to America’s advantage. China’s 14th Five-Year Plan $15B quantum push has produced millions of photonic quantum chips that are now solving problems in hospitals and laboratories, but using 10% of the power used by an electronic chip and running 1000x times faster. For the first time, optical quantum computers are industrial-grade products.
Background
In last year ’ s post, China’s Photonic Dawn = America’s Electronic Twilight, we saw how photonic integrated circuits, PICs, use light particles instead of electricity to process and send information. Combining electronic and photonic elements in a single chip, they use built-in monitoring and stabilization systems for reliable operation–and stability is vital for quantum technologies. By using different properties of light–like color, timing and distribution–PICs process data faster and consume less power – wonderful for training
AI models, powering clouds and quantum communication. PICs run so cool that they’re scalable at room temperature, cutting IC cooling costs by 90%. Best of all, they can be easily scaled up to support a million qubits for quantum computing–the next generation after photonics.
China began investing in photonic chips in 2012 and, in April 2024, Shanghai Jiao Tong University Chip Hub for Integrated Photonics (CHIPX) shipped world’s first thin-film lithium niobate1 (TFLN)
photonic chips from its pilot production line–
spanning chip design, wafer-level fabrication, packaging and testing through to system integration. This closed-loop fabrication cuts costs 50–70%, making hybrid optoelectronic systems in data centers practicable.
Technical significance
1,000 PICs fit onto a 6” silicon wafer, a degree of miniaturization called ‘monolithic integration,’ and CHIPX produces 12,000 six-inch wafers annually, using older machinery to avoid dependence on extreme ultraviolet (EUV) lithography machines. Unlike cryogenic superconducting qubits, SJTU’s design operates at room temperature with low loss, enabling fully programmable processors for error-corrected computing.
Fabricated using only conventional CMOS processes PICs integrate waveguides, modulators, and detectors on a single silicon-photonics
platform, supporting hundreds of photonic qubits that simulate processes like molecular interactions for drug discovery. By supporting multi-photon entanglement, PICs facilitate secure quantum communication and distributed computing, complementing China’s Micius satellite network.
The market
● The global photonics market size is $1 trillion in 2025, up 20% from 2024, driven by demand in semiconductors, telecom, and AI applications. This includes lasers, sensors, and optical components, with a projected CAGR of 6–8% through 2030.
● China’s lead in photonic quantum tech accelerates its development of AI, 6G, and secure communications
● It has massive potential for export via BRI networks.
● PICs deliver room-temperature operation, lower error rates and scalability for massive parallelism.
● USTC has already demonstrated 10 quadrillion times faster sampling than supercomputers.
Investable?
● AI Acceleration: Photonic chips deliver 1,000-fold speed boost to data centers, enabling ultrafast neural network training and inference beyond classical limits. Ramp-up: 2025-2030, with rapid adoption in hyperscale facilities; projected market value: $5 billion by 2030.
● Energy Efficiency: PICs reduce power consumption dramatically while maintaining high performance, thus supporting sustainable AI and computing scalability. Ramp-up: 2025-2028, driven by green data center mandates; projected economic impact (savings + market): $9.65 billion by 2030.
● Aerospace Innovation: Enables lightweight, high-speed signal processing for real-time navigation and satellite communications in harsh environments. Ramp-up: 2026-2032, phased integration in defense and commercial aviation; projected market value: $3 billion by 2032.
● Biomedical Advances: Speeds up imaging and genomic analysis, improving diagnostics and personalized medicine through integrated optical computing. Ramp-up: 2025-2030, via regulatory approvals for medtech devices; projected market value: $5 billion by 2030.
● Financial High-Speed Trading: Facilitates ultra-low latency data transmission, enhancing algorithmic trading and risk modeling in volatile markets. Ramp-up: 2025-2029: $2 billion by 2029.
● Huawei’s Ascend integration will lead to BRI exports and quantum-secured networks in 150+ countries.
● How to invest? Diversify into USTC-linked ventures or photonic ETFs like QTUM.
China is the sole source for 6N Niobium needed to make chips and leads in thin-film lithium niobate (TFLN) technology, dominating research, production, and commercialization. It launched the world’s first commercial TFLN photonic chip production line in June 2025, targeting AI and quantum applications, with firms like CASTECH controlling ~80% of wafer output. China files 40–50% of global TFLN patents, outpacing the U.S. at 25%.