Embedded Security Market - By Offering (Hardware, Software, Services), By Security Type (Authentication & Access Management, Payment, Content Protection), By End Use (Automotive, Healthcare, Consumer Electronics, Telecommunications, A&D) & Forecast, 2023 – 2032

Embedded Security Market - By Offering (Hardware, Software, Services), By Security Type (Authentication & Access Management, Payment, Content Protection), By End Use (Automotive, Healthcare, Consumer Electronics, Telecommunications, A&D) & Forecast, 2023 – 2032

Embedded Security Market Size

Embedded Security Market was valued at USD 6.8 billion in 2022 and is anticipated to grow at a CAGR of over 6% between 2023 and 2032. With rising cyber threats and high-profile data breaches, organizations are increasingly prioritizing the protection of their systems and sensitive data, fueling the global market growth.

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Embedded security solutions are becoming essential for safeguarding against these evolving threats, providing robust defenses at the hardware and software levels. As cyber threats become more sophisticated and prevalent, organizations are prioritizing the protection of their systems and sensitive information. Embedded security solutions, with their ability to provide multi-layered defense mechanisms at both the hardware & software levels, are increasingly being seen as essential. This heightened awareness, coupled with regulatory pressure, is propelling the embedded security industry forward as businesses across various sectors seek comprehensive solutions to safeguard against data breaches and unauthorized access.

Embedded security is a multifaceted approach to safeguarding electronic systems and devices from various threats. It encompasses the incorporation of security features and protocols directly into hardware & software components. These measures include encryption, access control, secure boot processes, and vulnerability assessments that aim to protect against unauthorized access, data breaches, and tampering. Embedded security is crucial in industries such as IoT, automotive & critical infrastructure as it fortifies the resilience and reliability of connected devices, thereby ensuring the confidentiality, integrity & availability of sensitive data and critical functions.

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The complexity of embedded systems can be a major factor hindering the embedded security market growth. Embedding sturdy protection features into complex systems may additionally require specialized expertise and assets. For smaller groups, this complexity may be cost-prohibitive, potentially leaving them vulnerable to cyber threats. The retrofitting of older systems with security features also can be technically challenging. Balancing safety with usability in complicated structures is another market obstacle as overly intricate security features can also disrupt consumer safety. Overcoming those complexities is important to ensure market growth.

COVID-19 Impact

The COVID-19 pandemic initially disrupted supply chains & budgets, slowing down the implementation of embedded security solutions in some industries. The economic uncertainty led to budget constraints for security investments. Furthermore, there was an increased awareness of cybersecurity risks as remote work and digitalization surged. This factor drove the demand for embedded security solutions, particularly in sectors including healthcare and IoT where data protection was critical.

Embedded Security Market Trends

• The embedded security industry is witnessing several notable trends. With the proliferation of IoT devices, there is a heightened demand for robust security measures to protect interconnected systems. AI & ML technologies are being integrated into embedded security solutions for real-time threat detection & response. Hardware-based security solutions are gaining traction to fortify devices against physical attacks.
• Cloud integration is crucial in ensuring data privacy & integrity in cloud-connected devices. Automotive security is a growing concern as connected & autonomous vehicles become more prevalent. The rollout of 5G networks is prompting security enhancements in embedded devices to support high-speed & low-latency connectivity. Additionally, stringent regulatory requirements are driving the adoption of embedded security solutions in various industries to meet compliance standards.

Embedded Security Market Analysis

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Based on end use, the market is segmented into automotive, healthcare, consumer electronics, telecommunications, aerospace & defense, and others. The automotive segment is estimated to register a CAGR of over 5.5% over the forecast period.

• The automotive segment in the embedded security industry is growing due to the increasing integration of connected & autonomous features in vehicles. As vehicles become increasingly connected & autonomous, the need for robust security measures will grow. Robust & embedded security is essential to protect critical vehicle systems & data, driving significant demand for security solutions in the automotive industry.
• Regulatory mandates are compelling automotive manufacturers to integrate security features to protect sensitive data and ensure passenger safety.
• As connected cars and autonomous vehicles become more widespread, the demand for embedded security solutions in the automotive sector is expected to rapidly grow to ensure the security & integrity of these complex and digitally driven systems.

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Based on security type, the market is segmented into authentication & access management, payment, and content protection. The payment segment dominated the global market in 2022, accounting for a revenue share of over 50%.

• The payment segment is experiencing robust growth, which is primarily driven by the increasing demand for secure digital payment solutions. With the rise of online transactions, mobile payments, and contactless payment methods, both consumers & businesses alike are increasingly being reliant on secure financial transactions.
• The growth of contactless payment methods, particularly during the COVID-19 pandemic, has accelerated the need for secure embedded solutions.
• Embedded security solutions, such as hardware security modules and secure elements in smartphones & point-of-sale devices, play a critical role in protecting sensitive payment data, preventing fraud, and ensuring the integrity of financial transactions.
• The integration of biometric authentication methods enhances payment security, thereby driving embedded security adoption.
• As the payment landscape continues to evolve, the need for advanced & embedded security measures will grow, making this segment a key proponent of market expansion.

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Asia Pacific dominated the embedded security market with a significant share of over 30% in 2022. The region's expanding technology infrastructure and increasing adoption of IoT & connected devices have driven the demand for robust security measures. Countries including China and India are heavily investing in smart cities, connected vehicles, and industrial automation all of which require robust security solutions. Moreover, the rapid growth of mobile payments and digital financial services in countries such as China is fueling the need for secure embedded payment solutions. As Asia Pacific continues to develop technologically, the embedded security industry in the region will register significant & sustained growth.

Embedded Security Market Share

The embedded security industry is highly competitive owing to the presence of key players such as

• Infineon Technologies
• STMicroelectronics
• NXP Semiconductors
• Qualcomm
• Thales Group
• Microchip Technology
• Texas Instruments

These market players are adopting strategic initiatives including mergers & acquisitions, product offerings, technological advancements, innovations, and geographical expansion to gain significant market share & a competitive edge.

Embedded Security Industry News

• In March 2023, IAR launched the IAR Embedded Trust, which is a robust end-to-end security workflow for the embedded industry. With this latest release, IAR delivered its promise of “Security Made Simple” by helping customers quickly & easily manage, prioritize, and mitigate potential security problems.

The embedded security market research report includes in-depth coverage of the industry, with estimates & forecast in terms of revenue (USD Million) from 2018 to 2032, for the following segments

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By Offering

• Hardware
• Secure element
• Embedded SIM
• Trusted platform
• Hardware security modules
• Hardware token 
• Software
• Services

By Security Type

• Authentication & access management
• Payment
• Content protection

By End Use

• Automotive
• Healthcare
• Consumer electronics
• Telecommunications
• Aerospace & defense
• Others

The above information is provided for the following regions and countries

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • GCC
  • South Africa
  • Rest of MEA

Frequently Asked Questions (FAQ)

What is the size of the embedded security market?

The market size for embedded security was USD 6.8 billion in 2022 and is anticipated to record over 6% CAGR between 2023 and 2032.

How is the automotive sector driving the embedded security market?

The automotive segment is estimated to register over 5.5% CAGR from 2023 to 2032 due to the increasing integration of connected & autonomous features in vehicles.

What are the factors influencing the Asia Pacific embedded security industry?

Asia Pacific market share for embedded security was over 30% in 2022 and will grow through 2032 with the region's expanding technology infrastructure and increasing adoption of IoT & connected devices.

Who are the key players in the global embedded security industry?

Infineon Technologies, STMicroelectronics, NXP Semiconductors, Qualcomm, Thales Group, Microchip Technology, and Texas Instruments.