Post-Quantum Cryptography (PQC) Market

The Post-Quantum Cryptography Market size is projected to grow from USD 302.5 million in 2024 to USD 1,887.9 million by 2029 at a CAGR of 44.2% during the forecast period (2024-2029) The PQC market comprises developing cryptographic systems secured against quantum computing threats that may undermine traditional algorithms like RSA (Rivest-Shamir-Adleman) and ECC (Elliptic Curve Cryptography). Cryptographic researchers and technology companies are developing quantum-resistant algorithms, such as lattice-based and code-based systems. A range of initiatives such as three Federal Information Processing Standards (FIPS) finalized by NIST (National Institute of Standards and Technology) are FIPS 203: Module-Lattice-Based Key-Encapsulation Mechanism Standard (CRYSTALS-Kyber), FIPS 204: Module-Lattice-based Digital Signature Standard (CRYSTALS-Dilithium), and FIPS 205: Stateless Hash-based Digital Signature Standard (SPHINCS+) are underway to standardize these standards for broad adoption and interoperability.

Rising cybersecurity requirements in various verticals such as BFSI, government, and defense will drive the post-quantum cryptography market. Therefore, continuous technological improvement of cryptographic methods and investments in research and innovation are key drivers for developing effective post-quantum solutions against emerging quantum threats.

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IMPACT OF AI/GEN AI ON THE POST-QUANTUM CRYPTOGRAPHY MARKET ECOSYSTEM

The intersection of AI/Gen AI  and PQC drives a transformative market ecosystem. Regarding PQC security protocols, generative AI is refining them and aiding in developing quantum-resistant algorithms through data analysis and pattern recognition to make PQC more secure.

As market demand for AI grows, so does investment in sophisticated cybersecurity measures, including PQC. While PQC realizes increased computational demands, which, when combined with AI, can create performance challenges, AI's capabilities also introduce a variety of new vulnerabilities.

The transition to PQC standards requires careful coordination among all relevant stakeholders regarding compatibility and security. Overall, integrating generative AI with PQC is essential to future cybersecurity measures. However, the integration also poses unique challenges that call for collaborative solutions to mitigate.

POST-QUANTUM CRYPTOGRAPHY MARKET DYNAMICS

Driver: Innovation of new cryptographic algorithms

New, quantum-safe algorithms have different performance metrics for standard operations like key generation and encryption/decryption times. Post-quantum encryption algorithms provide higher security than traditional algorithms; hence, they are acutely relevant to protecting censored data against adversaries leveraging quantum computers. These new cryptographic technologies, being developed, can be embedded anywhere in the network, providing layers of protection against highly specialized cyber-attacks for which known algorithms have no viable countermeasures. The next step in PQC is resistance to quantum attacks, and it is on its way to replacing traditional algorithms like RSA, Diffie-Hellman, and elliptic curves. This may probably become mainstream in 5-10 years. The NIST drives the development of standards for PQC, while the Network Security Agency of the European Union works on adapting protocols for post-quantum systems.

Restraint: Huge Implementation Costs

Migrating to PQC involves substantial implementation costs because it requires hardware upgrades and large amounts of software development. The intrinsic complexity in the computations of PQC algorithms enforces higher processing power; therefore, it requires specialized hardware accelerators and increased memory capacity, which is very expensive. Also, to integrate PQC into existing systems, complex heuristic processes are needed for selecting algorithms, modifying software architecture, and testing with validation—all time- and resource-intensive tasks. The number of developers involved will also increase since it will include skilled developers with experience in cryptography, particularly PQC, adding to the cost. Investments like these are not trivial for most small and medium-sized companies with limited IT budgets. Yet, at the same time, considering the financial burden, such updates must be secure in a post-quantum world.

Opportunity: Post-quantum Cryptographic Migration

The shift toward the post-quantum cryptography market is expected to present a new opportunity for businesses and service providers, driven by the imminent threat of quantum computing to existing encryption standards. With growing awareness, demand for PQC solutions will escalate. System audits, algorithm selection, implementation, and management—all associated with complex migration—require niche expertise. This demand will further be driven by compulsory PQC adoption and regulatory compliance within data-sensitive industries. Organizations that are early PQC deployers will realize first-mover advantages, securing current operations and providing long-term protection; these will bring new market segments in consulting, implementation, PQC tool development, managed services, and education. The first movers will have a multidimensional transition, setting an organization up for success within the shifting cybersecurity landscape.

Challenge:Challenges and Strategic Considerations in Implementing Post-Quantum Cryptography Market

PQC uses key sizes far larger than traditional public-key algorithms. Since the size of the key is large, it takes longer to process encryption and decryption, but then again, it also means higher storage, memory, and network bandwidth requirements. Although this drop in performance over small datasets is small, it is perceptible with larger key sizes. On the other hand, these requirements pose a significant challenge to older hardware, thus, in some cases, making deployment quite tricky, especially in latency-sensitive applications such as computer vision for autonomous vehicles and resource-constrained devices like smartphones and IoT devices. Enabling support for PQC efficiently usually requires upgrades in infrastructure, even when this technology is compatible with most devices.

Post-quantum Cryptography Market Ecosystem

By service, migration services are expected to grow at the highest CAGR during the forecast period.

The growth of quantum technology is exponential; hence, the need for PQC solutions is growing, along with the demand for migration services, which will be quite high soon. Most organizations have legacy systems, which are vulnerable to quantum threats; thus, there is a need to shift to PQC alternatives, and it includes the need for migration services that will assess the current system's technical issues and help make it compliant with regulations. These services also enable companies to deal with security risks and negotiate the changing landscape of vendors. Migration services will likely occupy an increasingly important place in the post-quantum cryptography market due to the increasingly pressing need for PQC migration, driven by complex transitions, regulatory pressures, and security concerns.

By region, North America will account for the largest market size during the forecast period.

North America dominates the post-quantum cryptography market for several reasons. The early adoption and investments in the relevant research accounted for the growth in the region, and the developed cybersecurity infrastructure established an array of expert institutions and technology firms to help drive PQC adoption. The strict data privacy regulations for GDPR and CCPA raise demand for PQC solutions. Added to this are the major tech companies, like Palo Alto Networks, IBM, and AWS, as well as proactive government initiatives concerning funding research and developing standards. With the rising threats of quantum computing, the focus of North America in the post-quantum cryptography market ensures continuous market leadership and immense contributions from significant technology players with comprehensive regulatory measures.

Key Players

The key players in the post-quantum cryptography market are NXP Semiconductor (Netherlands), Thales (France), AWS (US), IDEMIA (France), Palo Alto Networks (US), DigiCert (US), Kloch (US), Post-Quantum (UK), PQ Shield (US), Entrust (US), and IBM (US).

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Scope of the Report

The study categorizes the post-quantum cryptography market into North America, Europe, Asia Pacific, Rest of the World.

By Solution

• Quantum-safe hardware
• Quantum-resistant algorithms
• Quantum-safe cryptographic libraries
• Quantum-safe VPN, email service, and messaging systems
• Quantum-safe blockchain solutions
• Quantum-safe authentication solutions
• Quantum-resistant encryption products

By Service

• Design, Implementation, & Consulting services
• Migration services
• Quantum risk assessment

By Organization Size

• SME’s
• Large Enterprises

By Vertical

• BFSI
• Government & Defense
• Healthcare
• IT & ITES
• Retail & eCommerce
• Other verticals

By Region :

• North America
  • US
  • Canada
• Europe
  • UK
  • France
  • Asia Pacific
  • China
  • Japan
  • Rest of the World

Recent Developments

• In April 2024, NXP Semiconductors (Netherlands) and Utimaco (Germany) formed a collaboration, prompting the need for migration to post-quantum cryptography market. NXP, a global semiconductor designer, has taken proactive steps by implementing secure firmware signing on its chips using PQC. In collaboration with Utimaco, NXP is making its infrastructure quantum-resistant. This session covers best practices for migrating to PQC, a case study on NXP's quantum security efforts with Utimaco, and an introduction to secure signing solutions using the CRYSTALS-Dilithium PQC algorithm.
• In May 2024, Palo Alto Networks (US) and IBM (US) announced a strategic partnership to enhance AI-powered security solutions. IBM will integrate Palo Alto Networks' platforms into its security consulting services and train over 1,000 consultants on these products. As part of the collaboration, Palo Alto Networks will acquire IBM's QRadar SaaS assets and migrate QRadar customers to its Cortex XSIAM platform, which offers advanced AI-driven threat protection. IBM will continue supporting existing QRadar on-premise clients and receive additional payments to facilitate migrations. This partnership addresses cybersecurity challenges through integrated AI solutions and improved security operations.
• In February 2024, The Linux Foundation, in collaboration with AWS, Cisco, Google, IBM, NVIDIA, and others, launched the Post-Quantum Cryptography Alliance (PQCA). This initiative aims to advance and promote post-quantum cryptography (PQC) to address the security challenges posed by future quantum computers. The PQCA will work on high-assurance software implementations and support the development of new PQC algorithms. Founding members include IntellectEU, Keyfactor, Kudelski IoT, QuSecure, SandboxAQ, and the University of Waterloo, contributing to projects like the Open Quantum Safe and PQ Code Package projects. The alliance aims to enhance global cybersecurity and prepare for the quantum computing era.
• In January 2024, Thales (France), in collaboration with Quantinuum (US), launched a Post-Quantum Cryptography (PQC) Starter Kit to help enterprises prepare for the challenges posed by quantum computing. This kit enables businesses to test quantum-hardened encryption keys and assess the impact of quantum computing on their security infrastructure. Incorporating Thales' Luna HSMs and Quantinuum's quantum random number generation technology, the kit provides a trusted lab environment for testing various security scenarios, including PKI, code-signing, TLS, and IoT. This initiative aims to help organizations transition smoothly to quantum-safe protocols and address potential weaknesses before quantum computing becomes a significant threat.

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