Quantum market has 13% CAGR as supply chain forms

Business news | February 23, 2023

By Peter Clarke

Quantum technology is being deployed in computing, sensing and communications and is on a steady rise as players position themselves in the market, according to market analysis firm Yole Group.

Overall the quantum technology market place will grow with a 13 percent compound annual growth rate from a total market of US$761 million in 2022 to US$1,099 million in 2025, according to figures produced by Yole

Breaking this down to sub-markets: quantum computing was worth $65 million in 2022, which Yole differentiates from Quantum computing as a service (QaaS), which it reckons was worth $46 million. So quantum computing overall was worth $111 million in 2022. Meanwhile quantum sensing and timing market was already worth $545 million in 2022. The quantum cryptography market was smaller at $106 million. .

This is a small market with much of the effort in R&D, particularly on the quantum computing side, where tremendous growth is expected.

Yole predicts that by 2025 the QaaS market will be much larger at $228 million and quantum computing worth $98 million. Cryptography will have grown more steadily to $169 million and the sensing/timing market will be the largest but slowest growing at $604 million.

One reason for the slow but steady progress is that quantum computing is at the beginning of mainstream adoption. There are still many uncertainties around quantum computing not least about best technology options – superconductors, photons, trapped ions, cold atoms.

Infineon is notable in that it has significant R&D in three different technological qubit techniques; superconducting, trapped ion and spin.

QaaS then disaggregation?

The current trend is for companies to have a vertically integrated – or full-stack – approach to the market, developing everything from quantum devices up through computing, software and right to the service level. However, this approach requires significant investment in R&D, people, risk capital and not all players can do it. Partnerships are still critical since only relatively few companies can pursue different R&D approaches simultaneously.

It would be expected in the second half of this decade – as the supporting infrastructure develops – a disaggregation could set in.

The involvement of semiconductor players, including GlobalFoundries, TSMC, XFab, Intel and equipment makers such as Keysight, Formfactor, Oxford Instruments and Applied Materials is creating the basis for a familiar layered supply chain, asserted Yole.

Eric Mounier, director of market research at Yole Intelligence, said that China is dominant in filing patents on quantum technologies while the creation of startups is being led by the US, Canada and Europe.

“As a consequence, an industrial quantum supply chain is developing. Many companies are positioning themselves, from materials and equipment providers to chip foundries, systems, services, and associated hardware,” said Mounier, in a statement.