Quantum Cryptography Market Size, Share & Industry Analysis, By Type (Quantum Key Distribution, Quantum Random Number Generation, and Others), By Security Type (Application Security, Network Security, Database Security, and Cloud Security), By Industry (BFSI, Government, Energy & Utilities, Healthcare, Automotive, and Others), and Regional Forecast, 2024 – 2032

The global quantum cryptography market size was valued at USD 170.4 million in 2023. The market is projected to grow from USD 213.8 million in 2024 to USD 1,617.5 million by 2032, exhibiting a CAGR of 28.8% during the forecast period.

Cryptography refers to the method of encrypting data or transforming plain text into twisted text so that only the person who has the accurate ‘key’ can understand it. It uses the standards of quantum mechanics to encode data and communicate it in an approach that cannot be hacked.

Advancements in wireless networking technology have facilitated the development and adoption of quantum cryptography. Wireless networks, such as Wi-Fi, Bluetooth, and cellular networks are ubiquitous in modern society. Their use has increased the amount of data transmitted wirelessly.

However, high implementation and installation costs are one of the factors inhibiting the adoption of this technology. It is a relatively new technology and requires specialized hardware and software. This hardware can be expensive, and installation and maintenance costs can also be high. Furthermore, as this technology is still in its early stages of development, the availability of solutions and services that integrate quantum-based cryptography is currently limited.

The COVID-19 pandemic sped up digitization across all industries, accelerating the need for secure communications. For instance, most physicians started maintaining digital healthcare records during the pandemic. In several countries, these records were to be kept secured by law. Quantum-based cryptography offered security to such electronic communications.

The report covers key players, such as Qrypt, QuintessenceLabs, ID Quantique, Quside Technologies, QNu Labs Private Limited, and others. These players are continuously upgrading their solutions with the changing technology. For instance, ID Quantique is upgrading its existing enterprise-level encryption with quantum cryptography.

IMPACT OF GENERATIVE AI

Usage of Generative AI and Quantum Cryptography Together to Open up Numerous Lucrative Market Opportunities

The unification of generative AI capabilities and quantum cryptography can have a significant influence on the improvement of protected and effective systems across a wide range of industries. AI algorithms help improve quantum cryptographic procedures, making them efficient and adaptable. AI-based methodologies have efficiently mitigated the quantum threat by offering developed and optimized quantum-resilient cryptographic algorithms.

Thus, AI’s positive executions and probable applications in augmenting quantum cryptographic systems will offer better market opportunities. It comprises protected communication channels, greater data privacy, and strong security solutions for different industries.

Thus, GenAI provides a reliable solution to overcome the weaknesses of quantum-based cryptography, and implementation can create numerous new opportunities for the quantum cryptography market growth.

MARKET DYNAMICS

Quantum Cryptography Market Trends

Rising Government Investments in Quantum Computing Technologies to Foster Market Growth

Quantum technologies continued to make substantial progress in 2023, with users in the commercial industries being able to solve difficult problems significantly faster than the existing cryptographic algorithms. Companies are realizing the importance of adopting these quantum solutions. To track the top trends of 2023, Forbes interviewed experts in quantum space. According to this study, the top trends in the market were the emergence of quantum computing commercialization, enhanced supremacy of fault-tolerant quantum computers, and a significant increase in government initiatives in quantum space through investments and national protection mechanisms. The experts confirmed the implementation of quantum-safe cryptography solutions across main digital platforms, including post-quantum, PKI, and others. The trends mentioned above indicate a robust growth of the market in the coming years.

Market Drivers

Increasing Focus On Cyber Security to Drive Market Growth

Cyber threats play a major role in the growth of the global market. This was highlighted by the current Russia-Ukraine war. Countries are increasingly investing in quantum-safe technologies to ensure that they do not fall prey to cyber wars in the future. Additionally, the high demand for these solutions across industries indicates promising growth for the market. This demand also accelerated government investments and public funding, further favoring the growth of the startup ecosystem.

Furthermore, businesses and end-users have a high reliance on computer networks for transactions and communication, leading to the demand for advanced technologies to safeguard sensitive data. The technology hyperscalers in the market are also investing in building quantum computers capable of withstanding classical and quantum computer attacks.

Moreover, as no single organization can develop every aspect of the quantum-safe technology space, players operating in the market engage in strategic collaborations and partnerships. These factors can influence a country’s or company’s quantum cryptography market share.

Market Challenges

Lack of Skilled Professionals and Errors in Current Cryptographic Algorithms Might Hinder Market Growth

Quantum-based cryptography solutions are no longer a “nice to have”; organizations are realizing the need to implement these solutions. The market is entering the commercialization stage and gaining popularity at a rapid pace. However, the industry is facing a lack of skilled professionals. The below chart highlights the barriers hampering the adoption of quantum technologies across businesses.

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However, companies operating in the market are continuously trying to bridge the gap and cope with the changing technology. Thus, the market is expected to grow steadily with improved solutions, strategic collaborations, revised security standards, and improved workforce education efforts.

Market Opportunities

Post-Quantum Cryptography to Open up New Market Opportunities

Post-Quantum Cryptography (PQC) refers to the development of cryptographic systems that are protected against classical and quantum computers and can integrate with the current communications networks and protocols. PQC makes use of mathematical methods to generate algorithms that are developed to protect against both classical and quantum computers.

In August 2024, the first milestone in PQC was accomplished; NIST, the national standards organization, published three algorithm standards (ML-KEM, ML-DSA, SLH-DSA). These standards will provide support to regulation and central government, and aid enterprises with improved advice.

Hence, various market players are improving their solutions with PQC to deliver a better user experience. For instance,

• In August 2024, PQShield announced a collaboration with Si-Five to enhance PQC in RISC-V. It delivers PQC on SiFive's Essential and Performance high-performance processor families, securing critical aerospace, defense, consumer, and automotive solutions from quantum attacks and fast-tracking the implementation of NIST PQC criteria on RISC-V technologies.

Thus, the implementation of PQC can create numerous new prospects for market players.

SEGMENTATION

By Type Analysis

Quantum Key Distribution Gains Traction Due to Its Wide Application across Industries

Based on type, the market is divided into Quantum Key Distribution (QKD), Quantum Random Number Generation (QRNG), and others. Until now, QKD and QRNG have sparked the most interest among end-users. The QKD segment accounts for the highest market share due to its rising applications across industries. For instance,

• In June 2023, QNu Labs and the Indian Navy collaborated to deploy large-scale quantum-based encryption systems. With this collaboration, the Indian Navy became the first agency in the country to secure Quantum Key Distribution (QKD)-based systems.

Additionally, this segment is expected to record the highest CAGR during the forecast period.

The QRNG segment is expected to grow steadily owing to limited commercialized applications. On the other hand, the other technology segment holds the least market share as these technologies are still in their early stages.

By Security Type Analysis

Need for Robust Protection against Cyberattacks to Boost Investments in Network Security

Based on security type, the market is categorized into application security, network security, database security, and cloud security. The network security segment dominates the market and will continue to hold the highest share in the coming years. Network security applications highlight how quantum cryptography can be applied across live networks to offer protection against suspicious hacks or attacks from future quantum computers. Companies in the entire QComms ecosystem are constantly collaborating to strengthen network security applications. For instance,

• In June 2023, Nokia and its partners collaborated with Proximus to introduce Europe’s first live hybrid quantum encryption key trial. This trial highlights the growing practical applications of network security across the globe.

Moreover, other security types, such as application security and database security are anticipated to grow progressively in the coming years owing to limited practical applications.

By Industry Analysis

Rising Commercialized Applications and Adoption of Quantum Technologies across Healthcare Space Revolutionizes Market 

Based on industry, the market is segmented into BFSI, government, energy & utilities, healthcare, automotive, and others (gaming, retail, consumer goods, etc.). The early adopters of the technology include healthcare, BFSI, and government. Among these, the healthcare segment holds the highest market share owing to the technology’s positive commercialized and practical applications. In the modern healthcare space, critical data is frequently exchanged among clinics, labs, and practitioners. Thus, it becomes important for the infrastructure to deploy advanced cryptographic solutions. Moreover, medical centers across the globe have been installing quantum computers for advancing research related to quantum technologies. For instance,

• In March 2023, Cleveland Clinic deployed IBM’s Quantum System One, a quantum computer dedicated to healthcare research. With this installment of quantum computers at the academic medical center, System One became the first on-site IBM-managed quantum computer deployed in the private sector of the U.S.

Thus, increasing commercialized applications, rising research projects, and positive deployment of cryptographic solutions have increased the share of the healthcare sector in the global market.

Furthermore, the government and BFSI follow the healthcare industry in terms of their market shares due to continuous investments, initiatives, and research projects. Component manufacturers, research projects, and consulting services currently govern the market revenue. Owing to this, the government and BFSI segments hold a promising market share. The chart below indicates the top three industries affected by quantum computing.

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However, most of the above-highlighted industries share common problems in making the most of complex data sets and a sprawling web of requirements. Thus, the market players are recommended to double up on the commercialization applications and develop industry-specific solutions. Government, BFSI, and healthcare sectors are expected to hold a significant market share in the coming years.

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QUANTUM CRYPTOGRAPHY MARKET REGIONAL OUTLOOK

On the basis of region, the market is studied across North America, South America, Europe, the Middle East & Africa, and Asia Pacific.

North America

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North America accounted for the highest market share in 2023. The regional market is heavily influenced by increasing research projects and startups across the U.S. and Canada. According to a collaborative study by CapitalIQ, PitchBook, and press search, U.S.-based QComms startups have increased significantly. Also, the country is leading the way in implementing PQC to defend against upcoming quantum threats.

• In 2015, the number of QComms startups was 5, growing to 19 in 2021. This increase is higher than in any other country across the globe. Canada also has a remarkable position in research institutes and investments. With this, North America is expected to maintain its dominance during the forecast period.

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South America

South America is estimated to progress with a significant CAGR during the forecast period. Rising concerns regarding quantum security by governments and initiatives will aid the market’s growth in the region. Also, various quantum technology providers are expanding their presence in Brazil and Argentina, contributing to the regional market’s progress.

Europe

Europe is anticipated to gain a substantial share of the market during the forecast period. Government investments and initiatives for cybersecurity will propel the market’s growth across European countries. The region follows the U.S. in terms of the rising number of QComms startups, becoming an emerging power in the quantum technologies space. Owing to these factors, Europe is expected to grow at a steady pace. For instance,

• As part of Europe’s digital transformation strategy - the Digital Decade – the EU proposed to be at the forefront of quantum capabilities by 2030. The Quantum Technologies Flagship offers financial aid to expand the EU’s industrial leadership and excellence in quantum technologies.

Middle East & Africa

The Middle East & Africa have showcased considerable adoption of quantum technologies owing to increasing awareness and adoption of quantum-safe cryptography by several focus segments, such as development, strategy, education, and deployment. Also, the surge in investments within quantum research and development has fueled the market progress in the region. Growing investments in quantum technologies by different MEA countries, such as the U.AE., Turkey, Qatar, and others will contribute to the regional market’s progress.

Asia Pacific

Asia Pacific is making strides in the quantum computing space, with China leading the patents related to the quantum ecosystem. For instance,

• In May 2023, China Telecom invested USD 434 million to establish the China Telecom Quantum Information Technology Group Co. This group is headquartered in the eastern Chinese province of Anhui and focuses on developing quantum technologies.

Moreover, countries including India, South Korea, Australia, and others have lately showcased positive progress in the practical applications of quantum technologies.

KEY INDUSTRY PLAYERS

Key Market Players to Constantly Engage in Strategic Investments to Keep Up With Changing Technology

The current ecosystem of this market does not have a single player that can provide or manage a complete solution. To cater to this need, several companies are entering strategic collaborations and partnerships to integrate the best of their capabilities with their partner’s expertise. Additionally, they have been investing in upskilling their workforce, which might foster the market’s growth.

List of Key Quantum Cryptography Market Players Profiled:

• QuintessenceLabs (Australia)


• Quside Technologies (Spain)


• MagiQ Technologies (U.S.)


• Toshiba Digital Solutions Corporation (Japan)


• QNu Labs Private Limited. (India)


• KETS QUANTUM SECURITY LTD. (U.K.)


• LuxQuanta Technologies S.L. (Spain)


• Quantum Xchange. (U.S.)


• ID Quantique (Switzerland)


• Qrypt (U.S.)


• Terra Quantum (Switzerland)


• QuSecure, Inc. (U.S.)


• KETS QUANTUM SECURITY LTD. (U.K.)


• ISARA Corporation (Canada)


• PQShield Ltd (U.K.)


• Qrate Quantum Solutions (Russia)


• Quantum Xchange (U.S.)


• QuBalt GmbH (Germany)


• VeriQloud (France)


• QuantumCTek Co., Ltd. (China)

KEY INDUSTRY DEVELOPMENTS:

• February 2024 – Linux Foundation launched the Post-Quantum Cryptography Alliance (PQCA) in an open and collaborative effort to address the cryptographic security challenges posed by quantum computing. Founding members of the initiative include Cisco, Amazon Web Services (AWS), IBM, NVIDIA, IntellectEU, SandboxAQ, QuSecure, and the University of Waterloo.


• October 2023 – QuSecure, Inc., a PQC provider, launched a new global partner program. This was an important milestone as the company planned to expand its range and products to meet the growing demand for its PQC solutions.


• May 2023 – Amazon Web Services introduced two skill development programs for quantum computing in India. The company was integrating Amazon Braket — a fully managed quantum computing service - in the courses by collaborating with academic institutions and learning platforms.


• April 2023 – The International Institute of Information Technology, Hyderabad, collaborated with Synergy Quantum India to develop a Synergy Quantum Solution Lab. With this collaboration, they aim to develop economically viable quantum technologies and discover their potential applications in civilian and military domains.


• March 2023 – Cleveland Clinic and IBM announced the launch of an on-premise quantum computer from IBM in Cleveland, Ohio. The IBM Quantum System One mounted at Cleveland Clinic was the first quantum computer in the world to be exclusively used for healthcare research with the purpose of supporting Cleveland Clinic to fast-track biomedical discoveries.

INVESTMENT ANALYSIS AND OPPORTUNITIES

Various enterprises are securing funds and investments to fast-track the development of their quantum-based cryptography solutions with advanced technologies. Thus, adopting better investment strategies help businesses to enhance encryption, and introduce new products in the market.

The global quantum efforts are leading to research and innovation in quantum science and mechanism. These efforts are continually increasing, with present investments surpassing USD 40 billion across the globe. For instance,

• In 2023, Australia announced an investment of USD 88.78 million (AUD 130 million) through federal capital for the expansion of quantum technologies, as per its budget for 2023.

Such investments and initiatives for the enhancement of quantum science and technologies will create numerous ways for the market to grow.

REPORT COVERAGE

The report highlights the competitive landscape of the key companies operating in the market. Along with this, it studies the ongoing market trends and recent developments in the market. In addition to the factors mentioned above, the report has been studied meticulously, keeping in mind the security standards of countries across the globe. Additionally, it encompasses several factors that have contributed to the growth of the market in recent years.

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REPORT SCOPE & SEGMENTATION