Optical systems & integrated photonics in the Netherlands

Simone Cardarelli, co-founder of Micro Align. Optical fibres have changed how we communicate, but that’s just one aspect. The potential for photonics in computing, encryption, and sensing is vast. This technology is shaping the future across multiple industries. Artificial intelligence integration into optical systems is a key trend transforming the sector, enabling AI-powered photonic chips for quantum computing and energy-efficient telecommunications solutions. The Netherlands’ thriving ecosystem of startups, research institutions, and skilled workforce positions it as a leader in this innovation wave, attracting global talent and investment to its integrated photonics landscape.

Optical systems involve designing devices that manipulate light to manage, transmit, and process information for various applications, including communication, imaging, and sensing. Integrated photonics is a technology where multiple optical components (such as light generation, modulation, and detection) are integrated into a single chip, enabling smaller, more efficient systems. This technology reduces energy consumption and enables new applications across various industries.

“Optical chips can help measure tiny things, such as hospital blood samples or water quality in drinking systems. These applications are growing and making significant progress.”

- Wilbert Ijzerman, Research Manager Signify

As industries increasingly rely on high-speed data transmission and advanced imaging techniques, the demand for optical systems and integrated photonics continues to grow. In the Netherlands, this field drives innovation across telecommunications, healthcare, agriculture, environmental monitoring, consumer electronics, artificial intelligence, and automotive sectors.

The global photonics industry expects to grow by 40% over the next five years, with the Netherlands playing a significant role in this expansion. The Dutch photonics sector comprises nearly 300 companies, contributing approximately €8.6 billion to the economy as of 2022, with an annual growth rate of 7%. The integrated photonics market in the Netherlands aims to generate  4,000 full-time jobs and over one billion euros in revenue by 2026.

“If you’re looking for manufacturing support or product development, this is the place to be. Nearly every needed service is here—chip manufacturers, packaging facilities, design houses, and investment support.”

- Hans van den Vlekkert, CEO  Chilas B.V. 

Segment-Specific Insights

The Dutch optical systems and integrated photonics market is experiencing rapid growth driven by innovations in telecommunications, medical technology, and automotive sectors.

Productivity and Economic Impact

The Netherlands is home to several leading photonics companies within a well-developed ecosystem of research institutions and industry players. The industry supports over 12,000 high-tech jobs and contributes approximately 0.7% to the national GDP. The sector’s productivity has grown by 15% annually over the past three years.

Major players in the Dutch photonics industry include:

ASML: A global leader in photolithography machines.

Philips: Active in medical photonics and lighting solutions.

Signify. : Focuses on energy-efficient LED solutions.

SMART Photonics, PHIX, LioniX International, EFFECT Photonics: Notable startups contributing to innovation.

These companies dominate the local market while maintaining a substantial international presence. They set benchmarks for quality and performance globally.

Recent advancements in optical systems include breakthroughs in AI-driven applications that enhance data processing capabilities. Integrated photonics technology evolves rapidly with innovations such as Photonic Integrated Circuits (PICs), which offer improved performance in smaller form factors.

The range of photonics applications is astounding—LiDAR for mobility, glucose monitoring in healthcare, sustainable farming practices, and telecom advancements. Our startups are addressing some of the world’s most pressing challenges.”
 

- Dr. Abdul Rahim, Ecosystem Manager PhotonDelta

Key advancements include:

Silicon Photonics: Cost-effective mass production leveraging existing silicon manufacturing infrastructure.

LiDAR Systems: Enhancing autonomous vehicle navigation through integrated photonics.

Medical Applications: Development of biosensors for disease detection.

The Dutch government supports the optical systems industry through favourable policies that promote innovation and research. Initiatives include tax incentives for R&D investments, which can provide up to 32% tax credits for qualifying expenditures, encouraging companies to invest in new technologies. Collaborations with universities also have incentives, fostering partnerships that enhance knowledge transfer and innovation.

The government recognises photonics as a Key Enabling Technology (KET) that drives innovation and economic growth. Policies such as the High Tech Systems and Materials (HTSM) agenda allocate significant funding—approximately €1 billion annually—to support research and development in high-tech sectors, including photonics.

Additionally, the Netherlands has established various public-private partnerships to strengthen the photonics ecosystem. For instance, the Dutch Photonics Cluster brings together industry players, researchers, and government bodies to facilitate collaboration and accelerate technology development.

The Dutch government’s 2030 strategic vision aims to position the Netherlands as a leading global hub for photonics innovation, targeting a 30% increase in photonics-related jobs by that year. This supportive regulatory framework ensures that the optical systems industry remains competitive globally while contributing significantly to the national economy.

The investment climate in the Netherlands is favourable for startups and established companies. Venture capital funding has surged recently, with investors keen on supporting innovative projects within the optical systems sector.

The PhotonDelta ecosystem strengthens this environment by integrating design, fabrication, packaging, and application development. Additionally, European programs like Horizon 2020 offer funding opportunities for research and development in photonics.

“The global push towards the development of photonic technology is an important traction proof, and we need to ensure that the Netherlands remains one of the leaders in this field.”

- Simone Cardarelli, Co-founder MicroAlign

Venture capital investments in Dutch photonics startups reached €280 million in 2023, with significant interest from international investors. The ecosystem supports early-stage innovations through specialised innovation funds, university-industry collaboration programs, and incubation and acceleration platforms.

The Netherlands Foreign Investment Agency (NFIA) plays a crucial role in this landscape, helping international companies and entrepreneurs navigate the Dutch business ecosystem and connecting them with local photonics networks and investment opportunities.

With strong market demand, an encouraging policy environment, and a thriving ecosystem, the country offers immense opportunities for startups and skilled migrants to thrive in this high-tech sector.