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Europe has spent decades building world-class photonics research. Turning that expertise into scalable industrial capability has proven far more difficult.
Now, a €400 million-plus initiative called PIXEurope aims to close that gap by giving startups, research groups, and industrial companies access to a distributed pilot line for photonic integrated circuits (PICs). Coordinated by The Institute of Photonic Sciences (ICFO) in Spain, the effort is part of a broader European push to strengthen semiconductor sovereignty in areas where Europe believes it can still establish leadership.
The timing is not accidental. Demand for photonic technologies is accelerating as AI infrastructure pushes conventional electrical interconnects toward practical power and bandwidth limits.
According to Valerio Pruneri, an ICREA professor at ICFO and director of the PIXEurope pilot line, photonics has always been essential. “But now the demand for photonic devices and systems is really driven by AI and data centers,” he told EE Times.
By TAIYO YUDEN USA INC. 05.12.2026
By James Paris 05.12.2026
By Harry Foster, Siemens EDA 05.04.2026
Valerio Pruneri, group leader at ICFO and Director of PIXEurope (Source: ICFO | V. Montero)
For decades, optical fibers have formed the backbone of the internet. But AI systems are now expanding the role of photonics deeper into computing infrastructure itself, particularly inside hyperscale data centers where GPUs, switches, and memory systems must exchange enormous volumes of data with minimal latency and power consumption.
Traditionally, many of those connections relied on copper interconnects. That model increasingly breaks down at AI scale. “Beyond a certain distance, photonics is really needed,” Pruneri said. “It’s not only advantageous. It’s really needed because of the loss.”
The challenge is increasingly energy. “In the data center, the limiting factor is energy more than bandwidth,” Pruneri said.
That shift is helping drive interest in co-packaged optics (CPO), where photonic and electronic chips are integrated much more closely together, often on shared interposer platforms. Such architectures could reduce power-hungry digital signal processing while improving throughput and lowering latency.
“The evolution from discrete components and electronics separated from optics to co-packaged optics will bring a significant energy advantage,” Pruneri said.
Experimenting on a photonic chip at a lab in ICFO (Source: ICFO)Building a European photonics pilot line
Europe’s response is not to build another leading-edge silicon mega-fab. Instead, PIXEurope focuses on accelerating prototypes and bridging the gap between laboratory research and industrial manufacturing.
The initiative combines around 20 partners across 11 European countries into a distributed pilot-line infrastructure intended to support the full PIC development flow, including design, fabrication, packaging, testing, and integration.
“The pilot line is there to accelerate industrialization,” Pruneri said. “Once you demonstrate a product is scalable in our labs, you can transfer the processes and technologies to manufacturers, where it can be mass produced.”
That distinction matters. PIXEurope is not intended to become a high-volume manufacturing operation comparable to major semiconductor foundries. Instead, it acts as an industrial bridge for startups and companies that might otherwise wait a very long time for outsourced fabrication and packaging cycles.
“When you send out a design to make a chip or to package the chip, it might take as long as a year,” Pruneri said. “For a startup, that’s an eternity.”
The pilot line’s structure also reflects a fundamental reality of photonics itself: Unlike conventional CMOS electronics, no single material platform dominates the field. That diversity is one reason PIXEurope operates as a distributed network rather than a centralized institute.
Silicon photonics, silicon nitride, indium phosphide, thin-film lithium niobate, graphene, colloidal quantum dots, and other materials all offer different advantages depending on the application. Some platforms excel in communications, others in sensing, visible-light systems, or modulation.
“Silicon nitride has advantages over just silicon,” Pruneri explained. “For example, it has a wider transparency range.”
Silicon nitride can support visible-light applications such as augmented reality, while other materials provide other essential functions, including light generation, modulation, transmission, and detection.
Because no single institution can realistically master every material platform and every stage of the process chain, PIXEurope distributes capabilities across specialized organizations. According to Pruneri, research and technology organizations will work together “as if they were a single research and technology organization.” The end user will see what PIXEurope describes as a single gateway, while the underlying work is distributed among partners.
Why Spain matters in photonics
Spain’s role in the project reflects a broader national strategy to build semiconductor capability around focused areas of specialization rather than attempting to replicate the full global semiconductor value chain.
According to Emilio Garcia, a former Spanish government digital-policy official and author of the book “Chips y Poder” (Spanish for “Chips and Power”), Spain has historically developed a strong fabless and research-oriented semiconductor ecosystem, with photonics emerging as one of its more promising clusters.
Emilio Garcia, a semiconductor policy expert and former Spanish government official
Garcia said Spain’s photonics ecosystem combines startups, research centers, universities, and industrial support organizations spread across several regional clusters, particularly in Catalonia, Madrid, Valencia, and the Canary Islands.
“After many years without government support for microelectronics, this ecosystem is now getting a lot of attention from both national and local governments in Spain,” he said. “The support is particularly strong in photonics. Beyond PIXEurope, the government has also made an equity investment of €17.2 million (~$20.1 million) in SPARC Foundry in Vigo, Galicia.”
According to Garcia, SPARC Foundry will feature a state-of-the-art cleanroom of over 1,600 m² and a production capacity of up to 20,000 wafers per year, and it is expected to be fully operational in the first half of 2027.
Garcia said this is just one example of how the Spanish government has increasingly behaved “as a strategic partner” through direct equity investments in semiconductor, quantum, and photonics companies. Aided by large-scale European recovery funding and government-backed investment programs, Spain’s semiconductor ecosystem has expanded rapidly since the Covid era. “With the recovery plan, the government has dedicated between €2.5 billion [~$2.7 billion] and €3 billion [~$3.5 billion] and mobilized in total an investment of more than €5 billion [~$5.8 billion],” Garcia said.
Catalonia, in particular, has emerged as one of Europe’s more active semiconductor regions, with organizations such as ICFO, the Barcelona Supercomputing Center, CNM, and Eurecat operating alongside growing startup activity.
That collaborative ecosystem fits photonics particularly well because of the field’s complexity and fragmentation across materials, packaging technologies, and application domains.
“There is no photonics without electronics,” Pruneri said. That interdependence between photonics, electronics, packaging, and materials science is one reason regional ecosystems matter so much in this sector.
The ecosystem Spain is trying to build is already producing startups attempting to enter global semiconductor supply chains. But startups attempting to scale advanced photonics technologies often face long prototyping cycles, expensive packaging and testing requirements, and limited access to manufacturing ecosystems.
From research to commercialization
Europe’s challenge has never been research alone. It has been industrialization. PIXEurope attempts to address that gap precisely. “We offer a unique place where you can find basically all the technologies,” Pruneri said.
The initiative opens to end users this year with an initial set of services, while additional capabilities are expected to expand over time. Pruneri said he is already seeing interest from companies.
Whether Europe can ultimately convert pilot-line infrastructure into globally competitive manufacturing remains an open question. Asia and the U.S. continue to dominate many parts of semiconductor production, while China is investing heavily in photonics and integrated photonics technologies.
But Europe’s supporters argue that photonics may provide one of the few semiconductor domains where the continent still has an opportunity to shape the next generation of industrial infrastructure rather than merely catching up.
For Spain, that creates an opening to build around areas where it already possesses strong research institutions, startup activity, and specialized technical expertise. “Spain is playing a significant role in this European pilot line,” Pruneri said.
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