June 27, 2002 — Semiconductors are the devices of choice for optical switches, but MEMS and nanotech-based technologies will make inroads in the next five years, according to a new report.

Semiconductor-based network processors will grow from $613.6 million of the optical integrated circuit market this year to $4.57 billion in 2006. But the share of the market during the same period is expected to drop from 97 percent to 84 percent, reflecting the growth from competitive substitutes, such as MEMS and nano, according to Pioneer Consulting’s “Optical Chips: Enabling Technologies and Markets from Semiconductors to MEMS, Nano-Optics and Photonic Crystals.”

The report said that MEMS-based optical ICs will grow from $40.6 million in 2002 to $707.2 million in 2006. Nanotech will increase from zero to $163.2 million during the same period. Still, all market segments are expected to remain sluggish until 2004, when the telecom industry is expected to rebound, the report said.