The market for digital authentication and embedded security is poised for strong growth. According to a recent analysis by technology research firm ABI Research, the market volume will grow to 12.6 billion US dollars by 2030. This development is primarily driven by the approaching compliance deadlines for key cybersecurity laws and guidelines such as the Cyber Resilience Act (CRA), the EU NIS2 Directive and the US standard NISTIR 8259A.
Regulations as a driver
‘The steady advance of European regulations is not being slowed down by pandemics or political changes,’ emphasises Michela Menting, Senior Research Director at ABI Research. With regard to EU legislation, she warns that OEMs will have to adapt their product roadmaps to meet the requirements. This will lead to a clear shift towards security-oriented semiconductor solutions – from microcontrollers to specialised security chips.
Diversity of security solutions
The fragmentation of the IoT market – from highly critical infrastructure applications to consumer goods segments with little focus on security to date – is creating space for a wide range of security solutions:
- Secure microcontrollers (Secure MCUs) score points with their flexibility and extensive features. Providers such as Infineon, NXP, Microchip, Renesas, STMicroelectronics, Silicon Labs, Analog Devices and others are positioning themselves strongly in this area.
- Secure elements and TPMs serve particularly sensitive applications that require certifications such as Common Criteria, FIPS 140-3 or automotive standards. In addition to established semiconductor companies, specialists such as SealSQ and TropicSquare are also entering this market.
Standards on the rise
In addition to hardware solutions, industry standards are becoming increasingly important for facilitating compliance.
- SESIP, Matter and Qi Wireless Charging are developing into new de facto standards.
- IEC 62443 and ISO 21434 are already firmly established in industry and the automotive sector.
The integration of these standards enables OEMs to meet regulatory requirements more quickly and secure competitive advantages.
Added value beyond compliance
ABI Research emphasises that hardware security is not the only prerequisite for compliance, but that it forms the foundation on which comprehensive security strategies are built. At the same time, it opens up new business models: secure over-the-air updates, extended product lifecycles and additional service offerings create sustainable customer loyalty.
Conclusion
The embedded security market is at a turning point. While the regulatory landscape is putting pressure on OEMs, the growing demand for secure silicon is opening up enormous market opportunities – both for established semiconductor manufacturers and for specialised providers. For the IoT industry, this means that security by design is no longer optional, but mandatory – and at the same time a decisive factor for future growth.
