Optical computing or photonic computing uses light waves produced by lasers or incoherent sources for data processing, data storage or data communication for computing. For decades, photons have shown promise to enable a higher bandwidth than the electrons used in conventional computers (see optical fibers).

Most research projects focus on replacing current computer components with optical equivalents, resulting in an optical digital computer system processing binary data. This approach appears to offer the best short-term prospects for commercial optical computing, since optical components could be integrated into traditional computers to produce an optical-electronic hybrid. However, optoelectronic devices consume 30% of their energy converting electronic energy into photons and back; this conversion also slows the transmission of messages. All-optical computers eliminate the need for optical-electrical-optical (OEO) conversions, thus reducing electrical power consumption.

Application-specific devices, such as synthetic-aperture radar (SAR) and optical correlators, have been designed to use the principles of optical computing. Correlators can be used, for example, to detect and track objects, and to classify serial time-domain optical data.

The fundamental building block of modern electronic computers is the transistor. To replace electronic components with optical ones, an equivalent optical transistor is required. This is achieved by crystal optics (using materials with a non-linear refractive index). In particular, materials exist where the intensity of incoming light affects the intensity of the light transmitted through the material in a similar manner to the current response of a bipolar transistor. Such an optical transistor can be used to create optical logic gates, which in turn are assembled into the higher level components of the computer's central processing unit (CPU). These will be nonlinear optical crystals used to manipulate light beams into controlling other light beams.

Like any computing system, an optical computing system needs four things to function well:

Substituting electrical components will need data format conversion from photons to electrons, which will make the system slower.

There are some disagreements between researchers about the future capabilities of optical computers; whether or not they may be able to compete with semiconductor-based electronic computers in terms of speed, power consumption, cost, and size is an open question. Critics note that real-world logic systems require "logic-level restoration, cascadability, fan-out and input–output isolation", all of which are currently provided by electronic transistors at low cost, low power, and high speed. For optical logic to be competitive beyond a few niche applications, major breakthroughs in non-linear optical device technology would be required, or perhaps a change in the nature of computing itself.

A significant challenge to optical computing is that computation is a nonlinear process in which multiple signals must interact. Light, which is an electromagnetic wave, can only interact with another electromagnetic wave in the presence of electrons in a material, and the strength of this interaction is much weaker for electromagnetic waves, such as light, than for the electronic signals in a conventional computer. This may result in the processing elements for an optical computer requiring more power and larger dimensions than those for a conventional electronic computer using transistors.^{[citation needed]}