Embedded Security Market  Size (2025 – 2030)

The Embedded Security Market was valued at USD 7.67 billion in 2024 and is projected to reach a market size of USD 11.93 billion by the end of 2030. Over the forecast period of 2025-2030, the market is projected to grow at a CAGR of 7.65%.

The Embedded Security Market is a niche in the larger cybersecurity sector that deals with the protection of devices, data, and applications by directly incorporating protective features into the hardware and software in a device to prevent unauthorized access or malicious intent. Security breaches can be of extensive impact in this market, in which the rapid growth of IoT, connected devices, smart infrastructure, and autonomous systems signifies a notable rise, as such breaches can spread far-reaching consequences. Embedded security devices, such as secure elements, trusted platform modules, hardware security modules, and cryptography algorithms, are becoming critical for the authentication of devices, secure communication, and data confidentiality. Embedded security is becoming increasingly popular in industries such as automotive, consumer electronics, healthcare, and industrial automation, and is defined as a way to increase resilience to cyber risks and to ensure strict regulatory compliance requirements are met. The rising complexity of cyberattacks and the increasing use of smart devices and cloud connectivity are increasing the need to work with highly developed embedded security frameworks capable of providing real-time protection. Moreover, the market is changing with the introduction of AI-based threat detection, blockchain-based authentication, and hardware root-of-trust technologies. With organizations emphasizing digital trust and secure ecosystems, the embedded security market serves as an enabling foundation behind safety, reliability, and sustained digital transformation in industries worldwide.

Key Market Insights:

There were 16.6 billion connected IoT endpoints in 2023, with forecasts of roughly 18.8 billion by the end of 2024. Each additional endpoint raises the need for embedded security features (firmware integrity, device identity, secure boot).

Reported industry data shows an approximately 400% increase in IoT-focused malware attacks across sectors in the latest annual threat review, underscoring demand for runtime protection, anomaly detection, and device hardening.

Enterprise security budgets are being reweighted toward digital trust & device risk.
Around three-quarters (77%) of organizations reported they expect cyber budgets to increase in the coming year, many specifically citing wider attack surfaces (cloud + IoT + edge) and emerging tech risks as reasons to reallocate spend toward embedded/edge security capabilities. PwC

In industrial/operational environments, only 29% of organizations perform thorough security testing when procuring IoT devices; a sizeable share does only sampling or no checks, signalling a strong market opportunity for embedded security test suites, secure-by-design certifications, and remote patch-management solutions.

Asia-Pacific accounted for roughly ~35% of global IoT device shipments in recent data and leads in new device deployments (China alone has several billion connected devices), making APAC the fastest-growing and highest-volume region for embedded security adoption (edge devices, industrial endpoints, smart-city deployments).

Market Drivers:

Rapid Expansion of IoT Ecosystems is Accelerating the Need for Advanced Embedded Security Solutions.

The Embedded Security Market is in a healthy growth phase as the number of connected devices and IoT ecosystems is increasing at a fast rate in areas such as automotive, healthcare, and consumer electronics. The need for hardware-level security, secure elements, trusted platform modules, and hardware security modules is also on the increase as billions of smart devices are communicating sensitive data. Embedded security is also a crucial element of digital infrastructures today as it protects data integrity, unauthorized access, and data security, allowing safe operations to be performed.

Stringent Cybersecurity Regulations and Compliance Mandates are Driving Embedded Security Integration Across Industries.

Embedded systems are becoming the victim of increasing cyber threats that demand governments and industry organizations implement strict cybersecurity regulations around the world. Regulations like the Cyber Resilience Act of the EU and ISO/SAE 21434 in the automotive industry are strongly urging organizations to implement the best encryption and authentication practices. This regulatory impetus ascertains the reliability of systems, consumer safety, and continuity of operations, which fosters innovation and the overall use of embedded security solutions.

Market Restraints and Challenges:

The Embedded Security Market has significant limitations in spite of its growth potential. The high implementation costs, such as the cost of hardware encryption, firmware with a high level of security, and constant monitoring, tend to deter small and medium-sized businesses from implementing high-level solutions, restricting market penetration in cost-sensitive markets. Moreover, the high growth rate of IoT gadgets, interconnected systems, and AI-based applications makes integration a problem, and the old systems cannot be easily integrated into new security models, necessitating regular upgrades and heavy investments in R&D. All these contribute to the slowness of adoption of advanced embedded security solutions and force vendors to trade off innovation and market availability.

Market Opportunities:

The Embedded Security Market has achieved substantial growth as the number of devices and systems enabled by the IoT is rapidly growing in industries. With an increasing number of organizations incorporating the concept of smart homes, industrial IoT, and vehicles, a need to develop more enduring, unassailable security measures, which makes the development of new products and strategic alliances necessary. Moreover, the implementation of artificial intelligence and machine learning on embedded security systems presents an opportunity to develop the market, as it allows identifying threats more effectively, performing analytics, and responding automatically. It is through these trends that vendors can provide intelligent, efficient, and proactive security solutions to meet the changing cyber threats and enhance system reliability.

EMBEDDED SECURITY MARKET REPORT COVERAGE:

Embedded Security Market Segmentation:

Embedded Security Market Segmentation By Offerings:

• Hardware
• Software
• Services

The biggest Embedded Security segment is Hardware, as it is enabled by the growing demand for secure and reliable physical devices in the IoT, automotive systems, and industrial equipment. Hardware, including secure microcontrollers, encryption chips, and authentication chips, is very effective in defending against cyber-attacks and disallowing system breaches. The hardware-based approach of security is widely used by businesses and makers of devices to secure sensitive data and ensure that it remains within the strict security requirements, and thus, this segment forms the foundation on which embedded security is implemented.

The growing use of advanced security applications such as encryption software, intrusion detection systems, and secure firmware solutions is making software the fastest-expanding Embedded Security segment. The complexification of the devices and systems covered by the IoT is leading organizations to increasingly use software-based security to offer real-time threat monitoring, vulnerability management, and automatic protection. The development of smart homes, connected cars, and industrial IoT also contributes to growth, as these areas require agile and continuously situated software structures to deal with the changing cyber threats.

Embedded Security Market Segmentation by Application:

• Payment
• Authentication & Access Management
• Content Protection
• Others

The largest segment of applications in the Embedded Security Market is the Authentication & Access Management. The increasing desire to protect sensitive data, administer user identities, and control access in both digital and physical spaces has prompted mass adoption. Businesses and government agencies, as well as financial solutions, are more and more convinced to utilize built-in security applications to enable secure logins, multi-factor authentication, and access monitoring. The increasing incidents of cyber threats, regulatory compliance, and the growth of interconnected devices have only strengthened the hegemony of this segment and made it a crucial target of organizations that want to safeguard the digital ecosystem.

The fastest-growing application segment is payment, which has been bolstered by the influx of digital transactions, mobile wallets, and contactless payment systems. Payment terminals, smartphones, and IoT devices are getting integrated with embedded security systems to provide integrity to their transactions and stop fraud. The fast-growing use of e-commerce, fintech innovation, and the demand to provide safe and smooth payment solutions are hastening the development of this segment. The increase in consumer sensitivity in cybersecurity and tougher regulations is also driving the demand for secure payment solutions in the world market.

Embedded Security Market Segmentation: Regional Analysis:

• North America
• Europe
• Asia-Pacific
• Latin America
• Middle East & Africa

The strongest part of the global adoption and deployment lies in the Asia-Pacific, as it is the leader in the Embedded Security Market. This leadership is informed by the fact that the region is fast industrializing, its IoT ecosystem is thriving, and its electronics manufacturing foundation is strong. The demand for smart devices, industrial IoT applications, and connected vehicles is high in such countries as China, Japan, South Korea, and India, and all of them demand high-level embedded security solutions. The area enjoys large investments in technology infrastructure, favourable government efforts towards cybersecurity, and an expanding consumer electronics market, and this has further enhanced the claim that the region is the biggest market hub of embedded security solutions.

The Embedded Security Market is witnessing a rapid growth, with the Middle East & Africa region emerging as the fastest-growing region. The growth of this market is primarily due to the digital transformation initiatives that are going on, the rising adoption of smart city projects, and the demand for secure industrial and IoT networks. Apart from this, the UAE, Saudi Arabia, and South Africa are the major countries that are heavily investing in the cybersecurity infrastructure to protect their critical systems as well as IoT-enabled applications. The region's emphasis on technology modernization, economic diversification, and building secure digital ecosystems is making this area a major growth hotspot for embedded security solutions over the next few years.

Embedded Security Market COVID-19 Impact Analysis:

The COVID-19 pandemic deeply impacted the Embedded Security Market, altering its path and causing an outburst of demand for security and connected technologies. The rise in remote working, digital services, and IoT-enabled devices happened so suddenly that organizations across different sectors had to strengthen their embedded security infrastructures as a top priority to protect sensitive data and guarantee the continuity of the services. The healthcare area has been especially affected by the rapid deployment of connected medical devices, which have security protocols as the first line of defense against cyber threats and in ensuring patient safety. In the same way, the automotive and industrial sectors have had to face the same problem of securing smart factories or connected vehicles amid operational disruptions caused by lockdowns and supply chain interruptions. Actually, there were some hardware production and project implementation delays because of global restrictions; however, the market was also able to notice a simultaneous increase in software-based security solutions and cloud-enabled embedded security platforms. Moreover, the pandemic has been a big eye-opener as it has brought to light the weaknesses in the old systems, which is why companies have not hesitated to make use of advanced encryption, secure firmware, and authentication technologies at a much faster pace.

Latest Market News:

• In July 2024, Nozomi Networks announced the launch of the industry's first embedded security sensor designed for Mitsubishi Electric's programmable logic controllers (PLCs). This innovation aims to enhance the security of operational technology environments by providing real-time threat detection and response capabilities directly within the PLCs. The integration of this sensor is expected to bolster the resilience of industrial control systems against cyber threats.

• In January 2025, Italian cybersecurity startup Exein entered into a partnership with Taiwan's MediaTek to provide embedded cybersecurity solutions for MediaTek's Genio platform. This collaboration aims to secure billions of chips used globally across various industries, including mobile, automotive, home, and healthcare sectors. The deal, valued at over 5 million euros, is expected to double by 2028, embedding Exein's technology into more than 3 billion devices.

• In March 2024, Security Sales & Integration reported a significant increase in mergers and acquisitions within the security solutions sector during 2023. The market experienced robust growth, surpassing the previous year's performance. This surge in consolidation activities was driven by private equity-backed buyers and a heightened demand for integrated security solutions across various industries.

• In February 2024, UK-based cybersecurity firm Darktrace announced the acquisition of Cado Security, a company specializing in cloud security. This acquisition, the first since Darktrace's privatization by Thoma Bravo in 2023, aims to bolster Darktrace's capabilities in detecting and responding to cyber threats in cloud environments. The integration of Cado Security's technology is expected to enhance Darktrace's data extraction and analysis capabilities, providing more comprehensive security solutions for cloud infrastructures.

Latest Trends and Developments:

The market for Embedded Security is undergoing a significant change, which is largely influenced by the implementation of cutting-edge technologies such as AI and edge computing to elevate the detection of threats in real-time, broaden the resilience of the system, and maintain the security of the data being processed. The EU Cyber Resilience Act and similar regulatory initiatives are leading manufacturers to embrace the secure-by-design concept along with the implementation of strong firmware management and over-the-air updates. The reliance on hardware-based security measures, such as secure boot procedures and hardware security modules, is growing in order to secure the devices from hackers and other security threats. The main industries that tend to take advantage of embedded security solutions are automotive, medical, consumer electronics, and industrial automation, as they are all very interconnected sectors, leading to the deployment of embedded security solutions to protect both the devices and the data involved. Moreover, the adoption of software-centric development, CI/CD (Continuous Integration/Continuous Deployment) practices, and the use of modern programming languages such as Rust has become an efficient way of updating the secure systems and reducing the vulnerabilities which in turn positions the companies to be able to handle the cyber threats that evolve rapidly and even seize the new prospects that this dynamic market has to offer.

Key Players in the Market:

1. Infineon Technologies AG
2. NXP Semiconductors N.V.
3. STMicroelectronics N.V.
4. Microchip Technology Incorporated
5. Renesas Electronics Corporation
6. Qualcomm Technologies, Inc.
7. Texas Instruments Incorporated
8. Samsung Electronics Co., Ltd.
9. Thales Group S.A.
10. IDEMIA SAS