Quantum Photonics Market Size, Share, Growth, Trends, and Global Industry Analysis: By Offering (System and Services), By Application (Quantum Computing, Quantum Communication, Quantum Sensing and Metrology, Quantum Dot Photodetector, Atomic Clocks, Quantum LiDAR, PAR, and Quantum Sensor), By Industry (Space & Defence, Banking & Finance, Healthcare & Pharmaceutical, Transportation & Logistics, Government, Agriculture & Environment, and Others), and Region Forecast 2020-2031

Quantum Photonics Market size was valued at US$ 424.3 million in 2024 and is expected to reach US$ 2,508.9 million by 2031, growing at a significant CAGR of 28.9% from 2025-2031. Moreover, the U.S. Quantum Photonics Market is projected to grow significantly, reaching an estimated value of US$ 782.8 Million by 2031. The market focuses on the development, commercialization, and application of technologies that exploit quantum phenomena in photons for advanced information processing, communication, and sensing. The market is witnessing robust growth driven by the increasing demand for secure communication, particularly through quantum key distribution (QKD).

Rising cybersecurity threats and the limitations of classical encryption have positioned quantum photonics as a transformative solution, enabling ultra-secure data transmission based on quantum mechanics. Governments and key industries like defence and finance are investing in quantum-secure networks and infrastructure. Complementing this, a major trend reshaping the market is the convergence of photonic quantum computing with AI and machine learning, as well as the growing adoption of silicon-based on-chip quantum processors and cloud-based Quantum-as-a-Service (QaaS) models. These advancements enhance computational efficiency and real-world accessibility. The most promising opportunity lies in the development of scalable quantum photonic chips and the commercialization of secure quantum networks supported by national and international initiatives like the EU Quantum Flagship and the U.S. National Quantum Initiative.

However, the market faces restraints such as high system costs, technical complexity, limited skilled talent, and interoperability challenges. The lack of standardization and the high investment threshold pose barriers for widespread adoption. Despite these hurdles, sustained public and private sector support, along with global R&D momentum, are expected to unlock the full potential of quantum photonics in the coming years.

Facts & Figures

• Rising Demand for Quantum-Safe Communication: The exponential growth of data breaches and cyber threats has driven demand for quantum key distribution (QKD) systems, a core use case of quantum photonics. These systems enable ultra-secure communication by leveraging quantum properties like entanglement. For instance, in March 2025, Nokia, Honeywell Aerospace, and Numana jointly launched a quantum-safe communication network, integrating QKD technology to protect critical infrastructures.
• National-Level Government Investments: Global governments are heavily investing in quantum research and infrastructure as part of strategic digital defence. For instance, the European Quantum Flagship, U.S. National Quantum Initiative, and China’s quantum satellite program are allocating billions in funding toward quantum photonics research and development.
• Integration of Photonic Chips and Silicon Photonics: Quantum photonics enables ultra-fast computing and high-precision simulations, crucial for drug discovery and materials design. Industries are adopting quantum tools for solving complex problems at molecular and atomic scales. For instance, in March 2025, PsiQuantum raised $750 million to develop scalable photonic quantum chips via its partnership with GlobalFoundries.
• Demand from Healthcare, Pharma, and Materials Science: Integration of IVUS, OCT, and AI allows better visualization and targeted treatment, enhancing success rates in complex cases. For instance, pharmaceutical giants like Roche and Merck are exploring quantum partnerships to accelerate drug molecule modeling using quantum photonic simulators.

Key Developments:

• In June 2025, IonQ Announced $1.075B Acquisition of Oxford Ionics.
  IonQ’s definitive deal to acquire photonics-enabling specialist Oxford Ionics marks a major consolidation in quantum photonics hardware.
• In June 2025, Pasqal strengthened its quantum computing platform with the acquisition of Canadian photonic integrated circuit specialist AEPONYX, accelerating its path toward fault-tolerant quantum systems
• In March 2025, Quantum photonics leader PsiQuantum raised $750 million in a funding round led by BlackRock, bringing its total valuation to $6 billion. The funds will accelerate development of photonic quantum chips via a collaboration with GlobalFoundries, strengthening its path to fault-tolerant quantum computing.
• In March 2025, Welinq and QphoX announced a strategic partnership to develop optical quantum interconnects for superconducting quantum processors, targeting scalable, distributed quantum computing.

Quantum Photonics Market Segmentation:

Based on the offering:

• System
• Services

In the market, the system segment holds the largest market share. This is driven by rising demand for quantum photonic hardware such as quantum communication modules, photonic quantum computing chips, and integrated photonic circuits. These systems are fundamental to enabling core functionalities like quantum key distribution (QKD), quantum simulation, and high-speed optical processing. Significant investments from governments and enterprises into quantum hardware infrastructure, such as PsiQuantum’s $750 million initiative for scalable photonic quantum chips, underscore this dominance. On the other hand, the Services segment, while growing, currently holds a smaller share, limited mainly to consulting, integration, and early-stage QaaS offerings.

Based on the application:

• Quantum Computing
• Quantum Communication
• Quantum Sensing and Metrology
• Quantum Dot Photodetector
• Atomic Clocks
• Quantum LiDAR
• PAR (Photosynthetically Active Radiation) 
• Quantum Sensor

The quantum computing segment currently holds the largest share in the market. This dominance is fueled by the growing demand for high-speed processing and simulation in sectors such as pharmaceuticals, finance, and materials science. Photonic quantum computing offers advantages like scalability, low energy loss, and fast data transmission using photons. Major players like Xanadu and IBM are investing heavily in photonic-based quantum computing systems. In contrast, PAR (Photosynthetically Active Radiation) and Quantum LiDAR are smaller, emerging segments with niche applications in agriculture and autonomous vehicles, respectively, and are still at early stages of commercialization.

Based on the Industry:

• Space & Defense
• Banking & Finance
• Healthcare & Pharmaceutical
• Transportation & Logistics
• Government
• Agriculture & Environment
• Others

Based on industry, the banking & finance segment currently holds the largest market share in the market. This is primarily due to the rising demand for quantum-secure communication and encryption, especially for protecting sensitive financial data and high-value transactions. Quantum Key Distribution (QKD) enabled by photonics is increasingly being explored by financial institutions and central banks for future-proofing cybersecurity infrastructure. For example, banks in Europe and Asia have already begun testing quantum-secure networks in partnership with tech firms and government initiatives. While Banking & Finance leads, sectors like Agriculture & Environment currently hold a smaller share, though interest is gradually growing in quantum-enabled environmental sensing and climate modeling.