Embedded Security Market by Offering (Hardware (Secure Element, Embedded Sim, Hardware Token), Software, Services), Security Type (Authentication and Access Management, Payment, Content Protection), Application and Region - Global Forecast to 2028
[277 Pages Report] The embedded security market size has been estimated to be valued at USD 7.4 Billion in 2023 and is projected to reach USD 9.8 Billion by 2028, growing at a CAGR of 5.7% from 2023 to 2028. The growth of the embedded security market is attributed to several key factors. Firstly, the increased connectivity of devices and gadgets to the Internet, known as IoT, makes them vulnerable to cyberattacks. Security tools integrated into these devices play a role in safeguarding them from such attacks. Secondly, the use of advanced AI, specifically generative AI, to create malicious content that can harm devices is on the rise. Security tools are effective in detecting and preventing these harmful actions. Thirdly, the need for safeguarding devices like smartwatches used for payments against fraudulent activities is driving market growth. Additionally, regulations in different countries are mandating the use of security tools, which are becoming more affordable, user-friendly, and powerful. These combined factors contribute significantly to the expansion of the embedded security market.
Embedded Security Market Forecast to 2028
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Embedded Security Market Dynamics
Driver: Growing adoption of generative AI in various applications
In recent years, the global embedded security market has witnessed a significant surge in growth, primarily attributed to the increasing adoption of generative artificial intelligence (AI) across various applications. This burgeoning trend is reshaping the cybersecurity landscape and is driven by the ever-evolving need for enhanced data protection, privacy, and threat mitigation. Generative AI, leveraging advanced algorithms and deep learning techniques, has demonstrated unparalleled capabilities in generating realistic data, images, and even text. While its application spans across numerous sectors, such as creative content generation and predictive modeling, its infusion into security applications has been particularly transformative. Industries such as finance, healthcare, automotive, and IoT have embraced generative AI-powered solutions to fortify their security frameworks against emerging cyber threats.
Restraint: Costs associated with hardware security modules
Hardware security modules designed with older-generation expertise present substantial barriers to adoption. First, they are developed using commercial hardware that have a high preliminary acquisition cost. Second, they bring substantial complexity and cost of operations. In many cases, the staff costs to handle and control these modules greatly surpass the module's cost. The total cost and complexity prove to be unaffordable for many companies, leading to critical gaps in encryption key management for data protection. However, newer technologies can enable businesses to reassess their cost/benefit analysis and implement more robust security controls with low initial investments. Organizations are finding that next-generation hardware security modules and key management capabilities offered as a subscription-based approach deliver powerful data protection and reduce the total cost of ownership.
Opportunity: Introduction of 5G and development of 5G-enabled embedded devices
The advent of 5G technology is expected to serve as an opportunity for growth of the market for embedded security systems. The GSM Association (GSMA) estimates that by 2034, the 5G sector will have contributed USD 2.2 trillion to the global economy, accounting for 5.3% of the global GDP growth. As a result, the production of embedded devices based on 5G architecture is expected to grow in the future. Embedded devices used in automotive smart camera surveillance systems deliver faster response rates due to the integration of 5G in their design. Additionally, 5G technology is expected to help address the challenges faced during industrial automation and smart farming as it enables faster image processing. Therefore, embedded devices that support 5G infrastructure are expected to further the market growth.
Challenge: Complexities involved in designing embedded systems
While some embedded systems are quite simple, they are gradually becoming complex, and an increasing number of them can either replace human decision-making or provide capabilities beyond what a human can deliver. For example, some aviation systems, such as those used in drones, can integrate sensor data and act on it faster than a human, allowing for new types of operating characteristics. Designing of such applications that offer so many features poses a challenge that can reduce the effectiveness of an embedded system.
Embedded Security Market Ecosystem
An embedded security system is a set of computer hardware, software, firmware, and operating system designed to perform a specific function. These systems may be configurable or fixed to perform certain tasks. Embedded systems can be found in industrial machinery, consumer electronics, agricultural and processing equipment, automobiles, medical equipment, cameras, smartwatches, household items, aircraft, commercial equipment, toys, and mobile devices. Key players in embedded security system ecosystem includes Infineon Technologies AG, NXP Semiconductors, Qualcomm Technologies, Inc., Texas Instruments Incorporated, STMicroelectronics, Thales Group, Samsung, Broadcom, Cisco, Rambus, IBM, Microchip Technology, Inc., . IDEMIA, and Renesas.
Based on security type, payment segment likely to dominate the overall embedded security market between 2023 and 2028
The prevalence of embedded security in payment applications can be attributed to several pivotal factors. Firstly, it safeguards sensitive data like credit card details and bank account numbers, shielding them from unauthorized access, usage, or exposure. Additionally, it acts as a bulwark against fraudulent activities by verifying the legitimacy of payment initiators through techniques like biometric authentication, device fingerprinting, and transaction scrutiny. Moreover, embedded security aids businesses in adhering to the escalating global governmental regulations concerning payment application security. Lastly, it plays a crucial role in bolstering customer assurance, addressing the mounting apprehensions around payment data security and ensuring that users feel their information is well-protected.
Hardware segment likely to account for largest market share for embedded security market from 2023 to 2028
Hardware-embedded security is essential to protect sensitive data in a variety of applications. As the number of connected devices and the amount of sensitive data continues to grow, the need for hardware-embedded security will only become more critical. The most commonly used hardware security are secure elements, embedded SIM, trusted platform modules, hardware security modules, and hardware tokens. A secure element is a tamper-resistant microchip that is used to store cryptographic keys and perform cryptographic operations. Secure elements are often used in payment cards, mobile devices, and other IoT devices to protect sensitive data. An embedded SIM (eSIM) is a digital SIM card that is embedded in a device. eSIMs are becoming increasingly popular as they offer a more secure and convenient way to manage cellular connectivity.
Smart Identity Cards application segment to witness the largest market share in the overall embedded security market during the forecast period
The widespread adoption of embedded security in smart identity card applications can be attributed to several key factors. Firstly, the increasing popularity of smart identity cards for verifying individuals’ identities, driven by the growing need for secure identification in areas such as e-government services, border control, and access management. Secondly, the advancing sophistication of cyberattacks that traditional security measures struggle to counter, making embedded security essential for protecting smart identity cards from these evolving threats. Additionally, the rising regulatory emphasis on the security of smart identity cards worldwide necessitates the integration of embedded security to ensure compliance. Lastly, there's a demand for seamless user experiences, prompting the inclusion of embedded security features that enhance security without compromising user-friendliness or convenience.
APAC to lead the embedded security market between 2023 and 2028 owing to the surging adoption of embedded security devices in end-use applications such as consumer IoT Devices, wearables, and automobiles
A combination of influential factors is propelling the embedded security market in the Asia Pacific region. There's a significant surge in the adoption of embedded security in various end-use applications, including IoT devices, automotive systems, and wearables. This is due to the increasing recognition of embedded security's crucial role in safeguarding sensitive data and ensuring the integrity of these interconnected technologies. Additionally, the growing prevalence of cyber threats and sophisticated attacks in the region necessitates more robust security measures, leading to an increased demand for embedded security solutions. Moreover, regulatory requirements and standards set by governments are compelling businesses to implement powerful security mechanisms, thus driving the market forward. The rise in digital transformation initiatives and the proliferation of online transactions further emphasize the importance of embedded security, boosting its market growth. Furthermore, the increasing consumer awareness regarding data privacy and security is prompting companies to prioritize embedded security solutions to build and maintain customer trust. Lastly, advancements in embedded security technologies, such as hardware-based encryption and authentication methods, encourage organizations to invest in cutting-edge solutions to stay ahead in the evolving threat landscape.
Embedded Security Market by Region
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Key Market Players
The embedded security companies is dominated by a few globally established players such as Infineon (Germany), STMicroelectronics (Switzerland), NXP (Netherlands), Qualcomm (US), Thales Group (France), Microchip Technology (US), and Texas Instruments (US).
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Report Metric |
Details |
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Market size available for years |
2019–2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD Million) and Volume (Thousand Units) |
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Segments covered |
By Offering, By Security Type, By Application, By Region |
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Geographies covered |
Asia Pacific, Europe, North America and Rest of World |
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Companies covered |
The key players in the embedded security market are Infineon (Germany), STMicroelectronics (Switzerland), NXP (Netherlands), Qualcomm ((US), Thales Group (France), Microchip Technology (US), Samsung (South Korea), Texas Instruments (US), IDEMIA (France), Renesas (Japan). |
Embedded Security Market Highlights
The study categorizes the embedded security market based on offering, security type, application, and region.
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By Offering: |
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By Security type: |
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Recent Developments
- In July 2023, Thales signed an agreement with Thoma Bravo, a prominent software investment firm, for the complete acquisition of Imperva, a leading data and application cybersecurity company based in the US.
- In June 2023, Thales unveiled a collaborative initiative with Google Cloud to create advanced data security capabilities utilizing generative AI technology.
- In May 2023, STMicroelectronics introduced the STM32Trust TEE Secure Manager, a pioneering microcontroller system-on-chip security solution that streamlines the development of embedded applications, ensuring effortless out-of-the-box protection.
- In May 2023, Renesas Electronics introduced three new MCU groups specifically designed for motor control applications.
- In April 2023, Texas Instruments launched a new SimpleLink family of Wi-Fi 6 companion integrated circuits (ICs), designed to facilitate the implementation of reliable, secure, and efficient Wi-Fi connections at a budget-friendly price.
- In March 2023, Microchip Technology Inc. introduced six new products in its CryptoAuthentication and CryptoAutomotive IC families, significantly expanding its secure authentication device portfolio.
- In March 2023, STMicroelectronics unveiled its latest STM32H5 microcontroller (MCU) series, designed for enhanced performance, and fortified with cutting-edge security features that STM32Trust TEE Security Manager enabled.
- In February 2023, Infineon Technologies AG introduced its SECORA Connect portfolio, comprising sturdy chips that come in compact sizes, some of which are less than half the size of ladybugs.
- In August 2022, Infineon Technologies AG announced the launch of its groundbreaking SECORA Pay software. This cutting-edge solution sets the stage for the future of payments, catering to the latest trends in the industry.
- In August 2022, Microchip Technology Inc. (Nasdaq: MCHP) announced the expansion of its MPU System-on-Modules (SOMs) portfolio with the addition of the SAM9X60D1G-SOM.
Frequently Asked Questions (FAQ):
How big is the global embedded security market?
The embedded security market size has been estimated to be valued at USD 7.4 Billion in 2023 and is projected to reach USD 9.8 Billion by 2028, growing at a CAGR of 5.7% from 2023 to 2028.
Where is embedded security solutions primarily used?
Embedded security solutions are used to protect the software that runs on top of embedded systems from any significant threats. An embedded system is made up of programmable hardware that is integrated with the operating system and software.
Which region is likely to offer lucrative opportunities in the embedded security market?
Asia Pacific is lkely to offer lucrative opportunities in the global embedded security market. Due to the ever-growing threat landscape, APAC is highly focused on increasing its security spending. APAC comprises emerging economies such as South Korea, China, Australia, and Hong Kong. Factors such as continual growth in the mobile workforce, the unregulated nature of the internet, increasing complexity of businesses, and consolidating BYOD trends require strong security solutions, which, in turn, are expected to encourage such SMBs to adopt various security solutions.
What are the latest technological trends in the embedded security market?
Embedded security solutions are being increasingly used in automotive and wearables applications. Payment functionality is an emerging trend in the field of embedded security solutions. Contactless payments are made with contactless cards or mobile apps. Consumers can pay with a wearable device, such as a smartwatch, or with e-wallets on their smartphones. FinTech organizations have already begun using innovative techniques such as cryptograms to prevent cyberattacks and verify that the data they receive comes from the customer’s mobile device. Fintech companies have used a technique known as AI fuzzing to detect software vulnerabilities such as insecure APIs.
Who are the winners in the embedded security market?
Infineon (Germany), STMicroelectronics (Switzerland), NXP (Netherlands), Qualcomm (US), Thales Group (France), Microchip Technology (US), Samsung (South Korea), Texas Instruments (US), IDEMIA (France), Renesas (Japan) are the players dominating the global embedded security market.
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The study involved four major activities in estimating the size of the embedded security market. Exhaustive secondary research has been done to collect information on the market, peer, and parent markets. Validation of these findings, assumptions, and sizing with industry experts across the value chain through primary research has been the next step. Both top-down and bottom-up approaches have been employed to estimate the global market size. After that, market breakdown and data triangulation have been used to estimate the market sizes of segments and subsegments.
Secondary Research
The secondary sources referred to for this research study includes corporate filings (such as annual reports, press releases, investor presentations, and financial statements); trade, business, and professional associations (such as Consumer Technology Association (CTA), Integrated Systems Europe, the Organisation Internationale des Constructeurs d'Automobiles (OICA), the Society for Information Display (SID), and Touch Taiwan); white papers, AR- and VR-related marketing journals, certified publications, and articles by recognized authors; gold and silver standard websites; directories; and databases.
Secondary research has been conducted to obtain key information about the supply chain of the embedded security industry, the monetary chain of the market, the total pool of key players, and market segmentation according to the industry trends to the bottommost level, regional markets, and key developments from both market- and technology-oriented perspectives. The secondary data has been collected and analyzed to determine the overall market size, further validated by primary research.
Primary Research
Extensive primary research has been conducted after acquiring an understanding of the embedded security market scenario through secondary research. Several primary interviews have been conducted with market experts from both the demand- (consumers, industries) and supply-side (embedded security device manufacturers) players across four major regions, namely, North America, Europe, Asia Pacific, and the Rest of the World (the Middle East & Africa). Approximately 70% and 30% of primary interviews have been conducted from the supply and demand side. Primary data has been collected through questionnaires, emails, and telephonic interviews. In the canvassing of primaries, various departments within organizations, such as sales, operations, and administration, were covered to provide a holistic viewpoint in our report.
After interacting with industry experts, brief sessions were conducted with highly experienced independent consultants to reinforce the findings from our primaries. This and the in-house subject matter experts’ opinions have led us to the findings described in the remainder of this report.
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Market Size Estimation
Both top-down and bottom-up approaches have been used to estimate and validate the total size of the embedded security market. These methods have also been extensively used to estimate the sizes of various market subsegments. The research methodology used to estimate the market sizes includes the following:
- Identifying various applications that use or are expected to use the embedded security market.
- Analyzing historical and current data pertaining to the size of the embedded security market, in terms of volume, for each application using their production statistics
- Analyzing the average selling prices of embedded security based on different technologies
- Studying various paid and unpaid sources, such as annual reports, press releases, white papers, and databases
- Identifying leading manufacturers of embedded security, studying their portfolios, and understanding features of their products and their underlying technologies, as well as the types of embedded security offered
- Tracking ongoing and identifying upcoming developments in the market through investments, research and development activities, product launches, expansions, and partnerships, and forecasting the market size based on these developments and other critical parameters
- Carrying out multiple discussions with key opinion leaders to understand the technologies used in embedded security, raw materials used to develop them, and products wherein they are deployed, and analyze the break-up of the scope of work carried out by key manufacturers of embedded security solutions providers
- Verifying and crosschecking estimates at every level through discussions with key opinion leaders, such as CXOs, directors, and operations managers, and finally with domain experts at MarketsandMarkets
Market Size Estimation Methodology-Bottom-up Approach
Market Size Estimation Methodology-Top-Down Approach
Data Triangulation
The market has been split into several segments and subsegments after arriving at the overall market size—using the market size estimation processes explained above. Data triangulation and market breakdown procedures have been employed to complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, wherever applicable. The data has been triangulated by studying various factors and trends from both the demand and supply sides.
Market Definition
An embedded security system refers to specialized security measures and technologies incorporated directly into electronic devices, software, or hardware components. These measures are designed to protect the integrity, confidentiality, and availability of the device or system and the data it processes and stores. Embedded security systems are commonly used in various applications, such as Internet of Things (IoT) devices, industrial control systems, automotive systems, and more. They help safeguard these systems from threats like unauthorized access, data breaches, malware attacks, and tampering. These security features are deeply integrated into the device’s architecture and operation, making it more resistant to vulnerabilities and potential exploits. Examples of embedded security features include hardware-based encryption, secure boot processes, trusted platform modules, authentication mechanisms (like biometrics or secure keys), secure communication protocols, and intrusion detection systems. The goal is to create a layered defence that protects the device and its data throughout its lifecycle.
Key Stakeholders
- Product designers and fabricators
- Application providers
- Business providers
- Professional services/solutions providers
- Original Equipment Manufacturers
- Third-Party Service Providers
- Communication Network Providers
- Forums, Alliances, and Associations
- End-User Industries
- Research organizations
- Technology standard organizations, forums, alliances, and associations
- Technology investors
The main objectives of this study are as follows:
- To define, describe, segment, and forecast the embedded security market, in terms of value, based on offering, security type, application, and region
- To forecast the embedded security market, in terms of volume, based on application
- To forecast the size of the market and its segments with respect to four main regions, namely, North America, Europe, Asia Pacific (APAC), and the Rest of the World (RoW), along with their key countries
- To strategically analyze micromarkets1 with respect to individual growth trends, prospects, and contributions to the total market
- To provide detailed information regarding the key factors influencing market growth, such as drivers, restraints, opportunities, and challenges
- To provide a detailed analysis of the embedded security supply chain
- To analyze the opportunities in the market for stakeholders and provide a detailed competitive landscape of the market leaders
- To analyze the associated use cases in the embedded security business and their impact on the business strategies adopted by key players
- To analyze the opportunities in the market for stakeholders by identifying the high-growth segments of the global embedded security market
- To forecast and compare the market size of pre-recession with that of the post-recession at global, and regional levels
- To strategically profile the key players and comprehensively analyze their market ranking and core competencies2
- To analyze key growth strategies such as expansions, contracts, joint ventures, acquisitions, product launches and developments, and research and development activities undertaken by players operating in the embedded security market
Available Customizations
MarketsandMarkets offers the following customizations for this market report:
- Further breakdown of the market in different regions to the country-level
- Detailed analysis and profiling of additional market players (up to 5)
Generating Response ...
Growth opportunities and latent adjacency in Embedded Security Market