Europe's Photonics Sector Sees AI Investment Surge, Threatened by China

The AI boom is driving a sharp increase in capital for photonics, attracting large‑scale bets such as Nvidia's more than $6 billion in U.S. optics firms Coherent and Lumentum. In Europe, investor interest has been channelled into the continent’s first dedicated photonics exchange‑traded fund, launched by Defiance and listed on the London Stock Exchange and Borsa Italiana. Analysts warn that despite Europe’s strong scientific base, its share of the global photonics market has fallen to about 15 % while China’s has risen to over 30 %, raising concerns that European companies may struggle to scale their designs and could turn to Chinese competitors. Leading firms such as Mercedes, Bosch and Volkswagen have called for stronger, more sustainable photonic supply chains, an issue also addressed in the EU’s proposed Chips Act.