Terahertz Technology Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2030)

Terahertz Technology Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2030)

The Terahertz Technologies Market size is estimated at USD 0.69 billion in 2024, and is expected to reach USD 2.02 billion by 2029, at a CAGR of 19.70% during the forecast period (2024-2029).

Terahertz technology is an emerging and growing field with the potential for developing applications ranging from passenger scanning at an airport to large digital data transfers. It has been reflecting significant advancements on the scientific front. The adoption of terahertz systems in the semiconductor industry is one factor contributing to the growth of the Terahertz Technology Industry.

The expansion of telecommunication infrastructure will have a significant positive impact on developing countries. The increasing demand for smart devices and connected applications, such as IoT, AI, and Big Data, highlights the importance of interconnected technologies in capturing and transferring data for urban infrastructure reinforcement. A high-speed fiber optics network is the foundation for this infrastructural development, enabling the transfer of large amounts of data quickly and securely. By implementing advanced networks like 5G and 6G, which require reliable fiber optic cables and optical transceivers, various nations can drive the huge demand for terahertz technology in the near future.

The application of terahertz technology in the healthcare sector is increasing, such as in biomedical imaging, terahertz imaging, and spectroscopy in cancer detection, among other applications. Terahertz (Terahertz) radiation is highly sensitive to the presence of water. This has led to numerous applications in the biological and medical fields. Terahertz has been used to monitor the water content in biological tissues to detect skin and other types of cancer, evaluate skin burns, and understand the interaction of dermatological products with skin.

Security concerns have emerged as a significant challenge on a global scale. Governments and private enterprises have made substantial investments due to the escalating threat of terrorist activity worldwide. The implementation of security checks and surveillance measures in airports and other critical areas has been a matter of utmost importance, given the potential risk of terrorist attacks. The increasing utilization of terahertz technology, which enables the detection of concealed objects, has gained considerable traction in security-sensitive locations such as airports.

Terahertz technology has been a buzzing topic in the market for a while now. The technology spans the frequency range between the microwave and the infrared, but it is yet to be explored entirely in terms of potential. The number of application areas has been rising recently, with research and development driving the technology’s growth as a product to be deployed in different industries.

The European Chips Act Regulation was introduced as a component of a wider set of measures aimed at enhancing the semiconductor ecosystem of the EU. It came into effect on 21 September 2023. The European Union has expressed its strategic ambition to increase its share of semiconductor manufacturing to 20% by 2030. Such a rise in the semiconductor industry can attract new customers and expand its presence in emerging markets. Such developments by the European Union are expected to positively impact the terahertz technology market.

Terahertz Technology Market Trends

Defense and Security to be the Largest End User

• China's past pursuits of foreign and dual-use technologies suggest that the country will continue to grow its Terahertz technology in competition with other international powers such as the US. The radiation produced, or 'T-rays,' can penetrate the composite metals when examining the underlying aircraft metals. These metals are specifically used for certain aircraft types, making the process of finding and positively identifying any detectable substances more difficult.
• Furthermore, terahertz can also assist in personnel recovery missions for downed groups or aircrews in unfortunate situations wherein any rescue or assistance is required. In a degraded visual environment such as dust storms in the Middle East, Terahertz's smaller wavelength size and operating frequencies make it an ideal choice for tracking and finding human-sized targets of interest for recovery.
• As per the data published by NATO, among NATO countries, the United States has the highest military expenditure in 2024. The United States allotted around USD 967.7 billion as military expenditure.
• Future unmanned aerial vehicle (UAV)-assisted wireless communication systems are projected to use wide bandwidths obtainable at terahertz frequencies to enhance system throughput. Terahertz radiations play a major role in the adoption of surveillance systems in the defense sector for security screening to uncover hidden weapons, as the demand for these solutions is increasing, along with the proliferation of technology in the sectors.
• For instance, technological developments have led to the development of unmanned airborne surveillance systems or drones. Furthermore, the government’s high focus on developing drones is expected to support the market growth in the defense sector. For instance, in November 2023, Spain ordered 27 SIRTAP tactical unmanned aerial systems (UAS) from Airbus in a deal “close to” GBP 495 million (USD 543 million), marking a major modernization of airborne intelligence, surveillance, and reconnaissance (ISR) capabilities for the country’s army and air force.
• In October 2023, Germany ordered Rheinmetall Reconnaissance drones for USD 210 million. Rheinmetall will deliver Luna NG reconnaissance drone systems to the German Army for an estimated GBP 200 million (USD 210 million). A total of 13 systems, including a pilot system, will be delivered beginning in the second quarter of 2025.

North America Holds Largest Market Share

• The United States is a key market for terahertz technologies, primarily owing to the growing homeland security issues, investments in defense, and R&D. In addition, the stringent government regulations regarding the safety and production of aerospace technologies in the US and the growing automotive and aerospace industries are driving the market for Terahertz technologies in the regional market.
• According to the data provided by the Aerospace Industry Association, in 2023, the American A&D industry generated over USD 952 billion in total sales, which is up 6.7% over 2021 levels, and of this, USD 537 billion was generated through direct industry output, and USD 415 billion was generated through indirect output, demonstrating the value of the domestic A&D supply chain. In total, the industry generated USD 418 billion in economic value or 1.65% of the total nominal GDP of the United States, up nearly 7.0% above 2021. Such heightened growth from the aircraft industry is a significant driver for the growth of inspection systems based on terahertz technology.
• The increase in helicopters and commercial aircraft production in the United States is expected to drive the market. The US aerospace industry exports more than 60% of all aerospace production.
• US Air Force researchers are looking into technologies for future line-of-sight air-to-air communications and networking at frequencies higher than 100 GHz to help aircraft exchange mission-critical battle-management information. For the same, Air Force experts are expected to test terahertz communication technologies through modeling and simulation.
• Over the past several years, working in the terahertz (Terahertz) range has offered unique opportunities in various applications, including biomedical imaging, telecommunications, and advanced sensing systems, leading companies to invest in its advancements. For instance, NYU Tandon’s Vertically Integrated Projects (VIP) program involves long-term multidisciplinary initiatives emphasizing hands-on research and innovation. This research has been carried out in a next-generation lab for cutting-edge terahertz (Terahertz) measurements and research funded by the USD 3 million NSF: Major Research Instrumentation (MRI) grant.
• The Terahertz Lab is considered as one of the most advanced research facilities of its kind in the world, with state-of-the-art equipment currently facilitating researchers for studying the properties of devices, circuits, and materials up to 500 GHz, with the lab is planned to expand to 1 Terahertz and beyond with future enhancements.

Terahertz Technology Industry Overview

Factors like robust competitive strategies and firms' concentration ratio influence market competition. Innovation offers a moderately high sustainable competitive advantage in this market, as buyers increasingly seek efficient solutions to optimize their products.

Key players, including Toptica Photonics, Teraview, and BATOP GmbH, predominantly operate in Europe and command a significant market share. These companies heavily depend on technological advancements and the willingness of consumers to integrate these technologies into their practices.

Competitors can extract unique and detailed insights by leveraging innovative offerings and state-of-the-art techniques. While current product penetration in the market is minimal, projections indicate a rise in alignment with market growth during the forecast period.

Exiting the market poses minimal challenges, as components can be repurposed for other technologies using readily available sources. This flexibility translates to a limited risk concerning sunk costs. Competitive strategies strongly influence a company's market position, especially given the ambiguity surrounding product uniqueness. Consequently, strategic decisions can sway end-user choices. In summary, while the competitive rivalry remains semi-consolidated, there's potential for exponential growth in intensity during the forecast period.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support