Embedded Security Market Size, Share & Trends

Updated on : Oct 22, 2024

Embedded Security Market Size & Share

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% during the forecast period 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 industry.

Embedded Security Market Forecast to 2028

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Embedded Security Market Trends

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.

Embedded Security Market Segment

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.

Embedded Security Market Regional Analysis

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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Top Embedded Security Comapnies - 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).

Embedded Security Market Report Scope

Embedded Security Market Highlights

The study categorizes the embedded security market based on offering, security type, application, and region.

Recent Developments in Embedded Security Industry

• 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.

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