Hardware Security Modules Market Size, Share & Trends

Updated on : October 23, 2024

Hardware Security Modules Market Size & Share

The global hardware security modules market size was valued at USD 1.2 billion in 2023 and is estimated to reach USD 2.3 billion by 2028, growing at a CAGR of 13.5% during the forecast period from 2023 to 2028

The growth of the hardware security modules market share is driven by increasing data breaches and cyberattacks, need to effectively manage cryptographic keys, and emergence of digital transactions, electronic payments leading to rise in the need for protecting sensitive financial data.

Hardware Security Modules Market Statistics and Forecast to 2028

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Hardware Security Modules Market Trends:

Drivers: Need to follow stringent data security compliances

Lawmakers and regulators worldwide are improving the existing data security compliances, implementing new legal frameworks, and defining new data security regulations to respond to internal and external risks, for instance, data security risks from the members of the IT team who have knowledge of and access to networks, data centers, and admin accounts. As requirements for data protection compliance are becoming stringent, the use of point solutions to patch holes in data security compliance requirements is also increasing, resulting in rising demand for hardware security modules. These modules help enterprises create a common, extensible implementation infrastructure that offers compliance regimes with the protection of data-at-rest using encryption, enterprise key management, access control, and security intelligence. Regulations such as FIPS 140-2 Level 3, PCI DSS, NIST, and ANSI must be followed by the manufacturers of hardware security modules.

Restraint: Susceptibility to cyberattacks and security breaches

It is as important to secure hardware for everyday business operations as it is to securing software. The physical device security often gets neglected. As hardware security module updates are expensive, vulnerabilities exist. The cybersecurity systems need to be regularly updated by the companies, in order to adapt to innovative technologies. If a vulnerability is detected, it becomes costly to upgrade hardware security modules. These modules are susceptible to cyberattacks because of irregular security upgrades, remote deployment, a long device lifecycle, and attack replication. Due to the vulnerabilities, there is a possibility that a remote, unauthenticated attacker can gain complete control of the vendor’s hardware security module, enabling remote retrieval of all hardware security module data, including administrator credentials and cryptographic keys. By taking advantage of a cryptographic vulnerability, attackers can also upload modified firmware to the hardware security module.

Opportunity: Adoption of blockchain and cryptocurrencies

The increasing adoption of blockchain and cryptocurrencies presents a significant opportunity for HSMs. These technologies rely heavily on cryptographic keys for security, and HSMs can provide a secure and scalable key management solution for these applications. Cryptocurrencies rely heavily on cryptographic keys for transactions and wallet security. HSMs provide a secure environment for generating, storing, and managing these keys, which is crucial for protecting digital assets and ensuring the integrity of blockchain networks. HSMs can be used to create secure hardware wallets that are virtually immune to hacking and malware attacks. This enhances the security of cryptocurrency holdings for individuals and organizations. Cryptocurrency exchanges are prime targets for cyberattacks. HSMs can help secure the private keys used in the exchange's wallets, preventing unauthorized access and potential theft. Blockchain platforms like Ethereum use smart contracts for various applications. HSMs can provide secure execution environments for smart contracts, ensuring that they run as intended and protecting sensitive data within these contracts. ility: As blockchain networks evolve, there is a need for HSMs to facilitate secure cross-chain interoperability, allowing assets to move seamlessly between different blockchains. HSMs can play a role in the security of tokenized assets, whether they represent real-world assets or digital assets within a blockchain ecosystem. Overall, the adoption of blockchain and cryptocurrencies introduces a wide array of use cases and security challenges that HSMs are well-suited to address. These devices enhance the security, integrity, and regulatory compliance of blockchain-based systems, making them an essential component of the cryptocurrency ecosystem.

Challenge

Need for continuous evolvement in HSMs to meet the changing needs of the cybersecurity landscape. The cybersecurity landscape is characterized by rapid technological advancements, including new attack vectors, encryption standards, and emerging threats. HSMs must keep pace with these developments to remain effective. The emergence of quantum computing poses a significant threat to existing cryptographic methods. The HSM industry must address the growing demand for quantum-safe cryptography as current cryptographic algorithms may become obsolete with the development of quantum computers. HSMs must support new algorithms and provide a smooth transition to the post-quantum world. With the proliferation of cloud and edge computing, HSMs need to offer solutions that are compatible with these environments, ensuring the security of data both in transit and at rest.

Hardware Security Modules Market Ecosystem

Hardware Security Modules Market Segmentation

Medical & life sciences segment to exhibit the highest growth in hardware security modules market during the forecast period.

The medical & life sciences segment is expected to exhibit the second-highest growth for the hardware security modules market share during the forecast period. The growing need to protect patient identity, related data, and payment information is accelerating the market growth across this vertical. Stringent regulations such as HIPAA and cyber-attacks on medical institutions are driving the need for HSM solutions and services. medical & life sciences sector is witnessing rapid growth in the adoption of hardware security modules. These modules play a vital role in ensuring the security of telematics infrastructure, for example, the electronic health card (eGK) in Germany, facilitates the secure processing and transmission of patient data among trusted participants in the healthcare system, such as doctors, caregivers, hospitals, and pharmacies. HSMs are vital for ensuring the integrity and confidentiality of data on these cards. Additionally, pharmaceutical companies depend on strong security and privacy measures during the development of new medications, making hardware security modules an essential component of their operations.

The market for PKI and Credential Management application segment is expected to witness notable growth during the forecast period

The PKI and Credential Management segment is expected to exhibit notable growth during the forecast period. Hardware Security Modules (HSMs) play a crucial role in ensuring the security of cryptographic operations, especially in the context of Public Key Infrastructure (PKI) and Credential Management. HSMs generate, store, and protect the private keys associated with digital certificates in a PKI. This ensures that the private keys are never exposed outside the secure boundary of the HSM. HSMs can also be used to generate and safeguard encryption keys used for securing user credentials, ensuring that sensitive information remains confidential. HSMs can facilitate secure communication between different components of a PKI or credential management system. This ensures that sensitive information is exchanged in a protected manner.

On-premises segment to hold the larger share of the Hardware security modules market, by deployment type, in 2022

The on-premise segment dominated the hardware security modules industry size in 2022. Traditionally, HSMs were set up “on-premise” or within the enterprise data center. The prevalence of cloud computing, especially over the last few years, has seen the emergence of “Cloud based HSMs” or “HSM as a Service”. On-premise HSMs allow organizations to retain full control over their cryptographic keys and sensitive data. This is particularly important in regions where data sovereignty laws require organizations to store and manage their cryptographic keys within specific geographic boundaries. On-premise HSMs provide greater flexibility for customization and integration with existing infrastructure and security policies. Organizations can tailor the HSM environment to meet their specific needs, ensuring seamless integration with other on-premise systems. Some applications, particularly those with high-performance requirements, benefit from on-premise HSMs due to lower latency and faster access times. This is especially relevant in scenarios where rapid cryptographic processing is critical. Organizations having with predictable workloads, where the likelihood of business requirements and transaction volumes exceeding the capacity is less, prefer on-premise HSM solutions.

Hardware Security Modules Market Regional Analysis

Hardware security modules market in North America estimated to grow at the fastest rate during the forecast period

The hardware security modules market size , in North America is expected to grow at the highest CAGR during the forecast period. North America is expected to witness highest growth during the forecast period. Changing customer preferences toward the adoption of contactless cards and digital-first credit cards are also expected to fuel the growth of hardware security modules in North America. The surge in cyberattacks, especially payment frauds across industries, is expected to drive the need for HSM solutions and services across North America. HSMs are widely being adopted in the financial sector to secure financial transactions, protect sensitive customer information, and comply with regulatory standards such as the Gramm-Leach-Bliley Act (GLBA) and PCI DSS. The US government and various agencies place a strong emphasis on national security and the protection of critical infrastructure. Industries such as defense, aerospace, and government services, which are significant in North America, rely on HSMs to secure sensitive information and communications.

Hardware Security Modules Market Statistics by Region

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Top Hardware Security Modules Companies - Key Market Players:

Major vendors in the hardware security modules companies include Thales (France), Utimaco (Germany), International Business Machines Corporation (IBM) (US), STMicroelectronics (Switzerland), Microchip Technology (US), Infineon Technologies (Germany), Swift (US), Futurex (US), Atos SE (France), and Yubico are some of the key players in the hardware security modules market.

Hardware Security Modules Market Report Scope :

Hardware Security Modules Market Highlights

This research report categorizes the hardware security modules market based on deployment type, type, application, Trends, Growth , vertical, and region.

Recent Developments in Hardware Security Modules Industry : 

• In October 2023, Microchip Technology (US) announced a new family of PIC32CZ CA 32-bit microcontrollers with a 300 MHz Arm Cortex-M7 processor, an integrated Hardware Security Module (HSM), and a wide range of connectivity and Flash memory options for added flexibility. The new family of PIC32CZ CA devices includes the PIC32CZ CA90 with a HSM or the PIC32CZ CA80 without the integrated HSM. The HSM in the PIC32CZ CA90 is a monolithic solution that provides advanced security for industrial and consumer applications. The HSM operates as a secure subsystem with a separate MCU on board that runs the firmware and security features including hardware secure boot, key storage, cryptographic acceleration, true random number generator and more.
• In August 2023, Thales (France) announced the launch of Thales payShield Cloud HSM, a subscription-based digital payments security service built on its market-leading payShield 10K Payment Hardware Security Module (HSM) technology to help customers accelerate the adoption of cloud-based payments infrastructure.

Key Questions Addressed in the Report:

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