Despite Covid-19 Impact on Select Markets, Secure Embedded Hardware Experiencing Strong Growth Overall

25 May 2021

The fallout of Covid-19 has had mitigated effects on the embedded security market. While shipments into industrial and mobile sectors have taken a hit, the market has been buoyed by increased sales in PCs and contactless and healthcare devices.  Global tech market advisory firm ABI Research forecasts over 5.6 billion secure hardware shipments by 2025.

“Manufacturing delays, lower consumer demand, and slashed R&D budgets for cars and phones have impacted the demand for embedded hardware in the short term. However, the effects won’t be felt significantly over the longer forecast period as demand for secure hardware is increasingly prevalent across various industries. Industrial demand, including utilities, manufacturing, smart cities, and smart buildings will continue to look toward cost-effective secure hardware form factors to ensure trust in IoT applications, as well as compliance with physical safety, national security, and privacy regulations and standards,” explains Michela Menting, Digital Security Research Director at ABI Research.

In the short term, Covid-19 has boosted demand for digital authentication for remote working, healthcare services, and contactless payment capabilities, and, in particular, by leveraging hardware such as discrete TPMs, converged eSE/eSIM, and secure MCUs. Importantly, the pandemic has dynamized security strategies in these markets, accelerating the adoption of embedded security. Industrial, manufacturing, retail, and supply chain will be key target markets for IP protection and secure device lifecycle management. As such, the overall market will see strong growth over the next few years, reflecting a 12% CAGR from 2020-2025.

Semiconductors and OEMs will need to first tackle the shortfall and the delays in the current COVID-impacted supply chain to meet the growing demand for secure hardware. “Beyond that, critical to the widespread adoption of embedded security will be the support of service and software providers through digital identity, authentication, and access management capabilities,” Menting concludes.

These findings are from ABI Research’s Digital Authentication and Embedded Security market data report. This report is part of the company’s Digital Security research service, which includes research, data, and ABI Insights. Market Data spreadsheets are composed of deep data, market share analysis, and highly segmented, service-specific forecasts to provide detailed insight into where opportunities lie.

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