PUBLISHER: KBV Research | PRODUCT CODE: 1484170
PUBLISHER: KBV Research | PRODUCT CODE: 1484170
The Global Hardware Encryption Market size is expected to reach $1.2 trillion by 2031, rising at a market growth of 18.3% CAGR during the forecast period.
Aerospace and defense organizations invest heavily in research, development, and innovation to create advanced technologies, weapon systems, and defense capabilities. Therefore, the aerospace and defense segment captured $27.3 trillion revenue in the market in 2023. Protecting intellectual property, proprietary algorithms, and classified designs from unauthorized access, theft, and reverse engineering is essential to maintaining technological superiority and competitiveness.
The major strategies followed by the market participants are Product Launches and Product Expansions as the key developmental strategy to keep pace with the changing demands of end users. For instance, In January, 2024, Samsung Electronics Co. Ltd. launched the SSD 990 EVO, the latest entry in the company's range of consumer SSDs. The SSD 990 EVO strikes a balance between high performance, power efficiency, and reliability, making it a versatile option for various daily tasks. Additionally, In October, 2023, Micron Technology, Inc. introduced the Micron 7500 NVMe SSD tailored for data centre operations. This SSD stands out as the sole mainstream data centre storage solution worldwide to integrate 200+ layer NAND technology, leveraging Micron's advanced 232-layer NAND design.
Based on the Analysis presented in the KBV Cardinal matrix; Broadcom, Inc. and Samsung Electronics Co., Ltd. are the forerunners in the market. In March, 2024, Samsung Electronics Co., Ltd. introduced the Galaxy A55 5G and Galaxy A35 5G. The new products boast remarkable photography capabilities, synonymous with the Samsung Galaxy brand. They include advanced features like optical image stabilization (OIS) and video digital image stabilization (VDIS), ensuring that photos and videos remain sharp and steady even when captured on the move. Companies such as IBM Corporation, Intel Corporation, Toshiba Corporation are some of the key innovators in the market.
Market Growth Factors
With the proliferation of cyber threats such as malware, ransomware, and phishing attacks, businesses and individuals are increasingly worried about the security of their sensitive data. Hardware encryption offers a robust solution to protect data from such threats by encrypting it at the hardware level, making it much harder for unauthorized users to access. In conclusion, increasing concerns over data security are propelling the market's growth.
The exponential growth of data volumes generated by organizations across various industries has necessitated encryption solutions capable of processing large amounts of data quickly and efficiently. High-performance solutions offer accelerated encryption and decryption capabilities, enabling organizations to safeguard their data without compromising processing speed or performance. Thus, demand for high-performance encryption solutions is driving the market's growth.
Market Restraining Factors
Implementing hardware encryption requires investment in specialized cryptographic hardware components such as encryption accelerators, secure processors, and cryptographic key management systems. These hardware components often come with substantial upfront costs, particularly for organizations looking to deploy encryption at scale or across multiple locations. Therefore, high initial investment costs are impeding the growth of the market.
Architecture Outlook
Based on architecture, the market is categorized into ASIC and FPGA. In 2023, the ASIC segment registered 64.3% revenue share in the market. ASICs are designed and optimized for specific tasks, including cryptographic operations such as encryption and decryption. Unlike general-purpose processors or programmable logic devices, ASICs are tailored to perform encryption algorithms efficiently and with minimal processing overhead.
Product Outlook
Based on product, the market is divided into hard disk drive (HDD), solid state drives (SSD), universal serial bus (USB), and inline network encryptor. The solid state drives (SSD) segment registered 29.5% revenue share in the market in 2023. SSDs offer built-in encryption capabilities, including hardware-based encryption engines. This feature encrypts data stored on the drive, providing an additional layer of security to protect sensitive information.
Algorithm Standard Outlook
On the basis of algorithm standard, the market is segmented into RSA, AES, and others. The RSA segment recorded 50.8% revenue share in the market in 2023. RSA is a widely recognized and extensively studied asymmetric encryption algorithm known for its strong security properties. It relies on the mathematical difficulty of factoring large prime numbers, making it resistant to cryptographic attacks.
End Use Outlook
Based on end use, the market is divided into industrial, commercial, residential, and government. The industrial segment attained 20.0% revenue share in the market in 2023. The industrial sector encompasses critical infrastructure such as power plants, water treatment facilities, manufacturing plants, and transportation networks.
Application Outlook
By application, the market is divided into consumer electronics, IT and telecom, automotive & transportation, aerospace & defense, healthcare & lifesciences, government & public utilities, BFSI, manufacturing, and others. In 2023, the BFSI segment attained 8.8% revenue share in the market. The BFSI sector processes many financial transactions, including payments, transfers, and sensitive financial data transactions.
Regional Outlook
Region-wise, the market is analyzed across North America, Europe, Asia Pacific, and LAMEA. The North America region witnessed 29.8% revenue share in the market in 2023. North America faces many cybersecurity threats, including data breaches, ransomware attacks, and insider threats. High-profile incidents, such as the Equifax data breach and the Colonial Pipeline ransomware attack, have underscored the importance of robust cybersecurity measures to protect against evolving threats.
The market competition in the hardware encryption sector is intense, driven by several factors that shape the landscape of this rapidly evolving industry. With an increasing emphasis on data security across various sectors such as finance, healthcare, government, and IT, there is a growing demand for robust encryption solutions. Established players in the market, along with emerging startups and niche players, compete vigorously to offer encryption hardware that meets the stringent security requirements of organizations.
Recent Strategies Deployed in the Market
List of Key Companies Profiled
Global Hardware Encryption Market Report Segmentation
By Architecture
By Product
By Algorithm Standard
By End Use
By Application
By Geography