Embedded Security Market Size, Share & COVID-19 Impact Analysis, By Component (Hardware and Service), By Application (Payment, Authentication, and Content Protection), By End-user (Automotive, Healthcare, Consumer Electronics, Telecommunication, Aerospace & Defense, and Others), and Regional Forecast, 2022-2029.

The embedded security market size was valued at USD 8.04 billion in 2021 and is projected to grow from USD 8.23 billion in 2022 to USD 17.03 billion by 2029, at a CAGR of 10.9%. Asia Pacific dominated the global market with a share of 54.1% in 2021.

The global COVID-19 pandemic has been unprecedented and staggering, with embedded security experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a decline of -9.2% in 2020 as compared to 2019. Embedded security is a strategic way to protect various software operating on embedded systems. It is a hardware component which is used while working with software. The systems are designed in that way to perform specialized security functions. It is mainly available in process control units, aircraft, consumer electronics, hybrid cars, and other appliances. It is an extremely reliable system which is capable of handling all types of uncertainty in security systems. The firmware inside the security system is difficult to change or update. However, the systems are usually designed to have a life of more than 15 years. With the emergence of Internet of Things (IoT) and industrial automation, the capacity of embedded platform security system is changing as the number of cyber-attack is growing rapidly. With the emergence of connected devices, the importance of embedded device security has increased.

The global connected security market has seen a significant increase in the last decades, and also is predicted to increase gradually during the forecast period. However, surge in the COVID-19 cases force a global lockdown in all countries. This resulted into the shutdown of manufacturing plants and the disruption of supply chains of raw materials in several countries. Also, the increasing digital revolution and advanced technology namely IoT and connected technology in developing countries are anticipated to propel the embedded security market growth in the forecast period.

COVID-19 IMPACT

Market Growth Driven During Pandemic Due to Rising Demand for Securing Connected Devices

COVID-19 had an exceptional effect on global business, industries, and societies. Various technologies developed and evolved during COVID-19 pandemic. People have become more technologically aware while working remotely. The use of technologies such as internet of things, automation, and artificial intelligence is increases in every sector. The embedded devices are major part of this technology, so the demand for embedded and connected security devices is increased in last two years, and this trend continues during forecast period. 

However, the global lockdown imposed during the COVID-19 pandemic created a major supply chain disturbance in the embedded security market. Due to that, the logistics movement of raw material and finished goods became critical for manufacturers and suppliers. Also skilled labors which are essential for the development and manufacturing of various security devices had migrated to their native places. Which led to the shutdown of industry verticals such as manufacturing units of automotive vehicles and aerospace and defense equipment. Nevertheless, the growing use of emerging technology for securing connected devices in developing countries has been responsible for an increase in the installation of high end security systems in research labs, factories, shop floors, railways, telecommunication systems, defense equipment, and aircraft. Emerging countries in the world are experiencing vital improvement in implementation of high end security solutions and automation that increased the active use of intelligent security devices. Furthermore, many non-government and government organizations such as the Ministry of Information and Communication Technology of India, Cyber Security and Infrastructure Agency of the U.S., European Union Agency for Cyber Security, and others have been implementing various procedures to reduce the threats of cyber-attack, increase system security, and reliability which is driving the global market.

LATEST TRENDS

Rise in Embedded Security Demand Due to Growing Number of IoT Applications

Nowadays, technology is booming more than ever. Every day, technology evolves and brings new techniques and functionality. It is not only about computers and mobile apps. It is all about artificial intelligence and IoT-based devices which are immensely used in day to day human life. The emergence of IoT is growing in each and every industry vertical. It is used in industrial automation, healthcare devices, airplanes, wearable technology, smart home units, automobile, and others. Authentication and access management have become essential in case of smart home. This increasing use of IoT increases the chances of various security issues related to connected devices. This also increases the chances of external cyber threats to attack running systems, which will damage the operation of the device and cause data loss. To avoid this condition, the use of embedded security devices is on the rise.

EMBEDDED SECURITY MARKET GROWTH FACTORS

Market Value to Surge Due to Increased Demand for Embedded Security in Electric and Hybrid Vehicles

The electrical vehicle market is continuously developing and becoming mature day by day. Customers are actively looking for vehicles that do not rely on conventional fossil fuels. These vehicles should be pocket friendly as well as eco-friendly. To achieve all these requirements, more and more electric charging points must be installed at homes and on roads. The security of this charging point is essential to protect their critical infrastructure. The complex architecture and various safety challenges in the electric vehicle and charging point make it difficult to manage all security challenges in the system. Embedded device security system helps to solve this problem. Electric vehicle security is important with the increased number of embedded and connected software in cars. The growing number of electric vehicles and connected devices in smart and hybrid cars increases the requirement of embedded device security hardware in electric vehicles.

RESTRAINING FACTORS

Industry Growth to be Restrained Due to Lack of Professional Workers and Huge Initial Investment

This system has become popular in some past years. However, the basic price of single physical security device and communication security devices are more than conventional security system. The internal components namely transmitters, receivers, and sensors used in security system are costlier, which are directly impacting the primary retail price of the system. Moreover, the renewal of existing security system and adoption of the new embedded technology is not cost effective for SME industries and individual users. Also, unavailability of professional workers which is required for manufacturing of embedded devices may restrain the growth of the embedded security market throughout forecast period.

SEGMENTATION

By Component Analysis

Hardware Segment to Dominate the Market in 2021 due to Requirement from the Aerospace Sector

Due to increasing use of advanced connected device security technology in the automotive sector, the hardware segment generated the highest sales and revenue in 2021 and it continues this trend throughout the forecast period. It is due to increasing implementation of the connected and embedded devices in the aerospace and defense and services segments offers lucrative growth opportunities with highest CAGR throughout the forecast period.

By Application Analysis

Payment Segment Generated Highest Revenue in Year 2021 Due to Heavy Use in Banking Industry

Payment segment generated highest revenue during 2021. This is due to the increasing demand for payment security in banking and finance transaction systems. In emerging countries, such as in India, online money transfer activity via mobile devices has increased. This increased use of online payment is expected to elevate the demand for payment security. This is followed by the authentication segment. This will continue during the forecast period. The content protection segment will generate the highest CAGR during forecast period owing to the increasing use of social media and online content creation for digital marketing.

By End-user Analysis

Aerospace & Defense segment Dominated Market in 2021 Due to Growing Adoption of High-end IoT Security Hardware.

Based on the end-user, the embedded security market is divided into automotive, healthcare, consumer electronics, telecommunication, aerospace & defense, and others.

Due to various advantages of this security technology in aerospace & defense security processes, the aerospace & defense segment dominated the market in 2021. Various aerospace & defense manufacturing companies are choosing embedded device security system for hardware security and protection in the defense equipment, which drives the global market. The automotive segment is set to follow the same trend as aerospace & defense segment which is estimated to help in achieving the highest CAGR during the forecast period. Moreover, the revenue obtained by consumer electronics and telecommunication segment is considerably high as the use of authentication devices is very high in the segment, which creates lucrative opportunity in the global market. However, healthcare segment is expected to show moderate growth during the forecast period.

REGIONAL INSIGHTS

Asia Pacific market size was USD 4.35 billion in 2021 and it is expected to grow as it is the dominating region in the market globally throughout the forecast period. The growing use of embedded device security and critical infrastructure protection devices in aerospace & defense sector and automotive industry is driving the market in Asia Pacific region. Furthermore, the top companies are adopting business strategies, such as business expansion, collaboration and product development, which is helping to propel the market in the Asia Pacific region.

China Dominated the Asia Pacific Region in 2021 Due to Increasing Use of IoT in The Country.

China generates highest revenue in Asia Pacific region. As per fortune business insights analysis, China will continue this trend throughout the forecast period. China is the leading country due to the presence of various manufacturing facilities of sensors and semiconductors and it is swiftly adopting cutting edge technologies, namely connected devices security and end-to-end IoT security, in the day-to-day manufacturing operations, which is driving the embedded security market growth.

Some top companies are endorsing different business strategies namely partnerships, acquisitions, and expansion of business. China is a hub for producing sensors for embedded devices globally, which is driving the market development in the country.

Asia Pacific is expected to be the highest growing region during the forecast period. It is due to the presence of top companies in China and Japan. Furthermore, increasing number of SMEs and security equipment manufacturers in the developing countries such as Japan, South Korea, and Singapore. Increasing use of internet of things in the power, and energy and utility industries are propelling the market in the region. Some local government bodies have been taking initiatives for embedded and IoT security to drive the market in the region.

In the North America region, the U.S. market will boost remarkably during forecast period because of the adoption of modern technology in defense and aerospace also in manufacturing sector in the Canada and U.S.

In Europe, Germany dominated the regional market in 2021 and will continue the trend during the forecast period owing to the fact that Germany is the hub for manufacturing sector and use of IoT and connected device is more in this country, which is propelling the use of connected security in the country. Furthermore, the country is projected to generate highest CAGR during forecast period, it is due to presence of large R&D and manufacturing facility in the country.

Due to less adoption of modern technology and unavailability of skilled workers which is required for developing and manufacturing of security systems, the growth in the markets of region; South America and Middle East & Africa is moderate.

KEY INDUSTRY PLAYERS

CISCO System Adopted Various Strategic Initiatives to Increase Global Presence 

Among top companies, CISCO system is holding the highest embedded security market revenue share globally. This is due to the fact that the company is a main producer of scanners and sensors, which are major components of the system. Also, Cisco system provides various types of raw materials and components to other key players in the world market. Furthermore, Advantech co. Ltd., Analog Devices INC, BAE Systems plc, Broadcom Inc., Infineon Technologies AG, STMicroelectronics, NXP Semiconductors, IBM Corporation, McAfee LLC, and others have increased their production units in the various countries and regions where the labor and production costs are less than other countries, this will contribute in the growth of market. Furthermore, most companies are focusing on acquisition, product launches, and partnership strategies with numerous SMEs to expand their global presence.

List of Key Companies in Embedded Security Market:

• ADVANTECH CO. LTD. (Taiwan)


• ANALOG DEVICES INC (U.S.)


• BAE SYSTEMS PLC (U.K.)


• BROADCOM INC (U.S.)


• CISCO System (U.S.)


• Infineon Technologies AG (Germany)


• STMicroelectronics (Switzerland)


• NXP Semiconductors (Netherlands)


• IBM Corporation (U.S.)


• MCAFEE LLC (U.S.)


• Microchip Technology (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• May 2022 - STMicroelectronics, a provider of embedded and cyber security services and various semiconductor products for automotive and aerospace sectors, partnered with Microsoft Corporation. This partnership integrates Microsoft Azure RTOS & IoT Middleware with ST’s ultra-low-power STM32U5 MCUs (microcontrollers) and provides a trusted platform module to secure embedded architecture of IoT systems.


• May 2022 – Advantech, a provider of automation and the Internet of Things (IoT) technology, launched its UNO Embedded Automation Computer platform. This newly launched platform pre-installed Canonical’s Ubuntu Operating System (OS) with improved security and edge features of IoT system.


• November 2021 - STMicroelectronics, a provider of embedded and cyber security services, launched its next-generation secure microcontroller for BSoC (biometric system-on-card) and dCVV (dynamic card verification) solutions. The solution strengthens the security of various banking and finance related services. This circuitry of additional connectivity and energy harvesting is utilized by biometric and dCVV system.


• February 2021 - Secure IC, a provider of end-to-end cybersecurity solutions and trusted platform for connected objects and embedded systems, partnered with MosChip Technologies, a provider of semiconductor and system design services. This strategic move provides Turnkey ASIC solutions and expands global IC security solutions in India.


• February 2021 - NXP Semiconductor, a provider of semiconductor and IoT based services to the various industry verticals, launched its new, comprehensive EdgeLock 2GO IoT service platform designed for the deployment and maintenance of IoT devices. It is helping customers to securely manage all their embedded systems.

REPORT COVERAGE

The embedded security report provides a detailed analysis of the global market and focuses on key aspects such as leading companies, product/service types, and leading end-use industries of embedded security. Besides this, the report offers insights into the market trends and highlights the key industry developments. In addition to the factors mentioned above, the report encompasses several factors contributing to the market growth in recent years.

Report Scope and Segmentation