Embedded Security Market Expected to Reach $12.6 Billion as Regulatory Demands Transform IoT Practices

The Rise of Embedded Security in the IoT Market

The landscape of digital authentication and embedded security is rapidly evolving, particularly as IoT devices proliferate across industries. According to the recent insights provided by ABI Research, the embedded security market is anticipated to surge to a whopping $12.6 billion in the next few years. This resurgence follows a period of stagnation that was largely influenced by the COVID-19 pandemic, and it reflects a growing urgency among Original Equipment Manufacturers (OEMs) to adapt to new regulatory frameworks.

In recent years, regulatory bodies have been active, implementing strict compliance measures that necessitate enhanced security protocols. The European Union's Cyber Resilience Act (CRA) stands out as a significant driving force behind this shift. Companies are now compelled to prioritize security in their product roadmaps, aligning their offerings with these forthcoming requirements. Michela Menting, Senior Research Director at ABI Research, articulates that such regulatory changes cannot be obstructed by external factors such as pandemics or political fluctuations. OEMs are being pushed toward integrating secure silicon and hardware protections as compliance deadlines approach.

Diverse Range of Security Solutions

The fragmented nature of IoT implementations across various sectors, from tightly-regulated domains to more relaxed environments, offers a wealth of opportunities for developing a broad spectrum of security offerings. Secure microcontrollers (MCUs) are particularly well-suited to accommodate this diversity, providing flexibility and a rich set of features. Numerous vendors including Analog Devices, Infineon, Microchip, and Renesas, among others, are already positioned to meet this demand.

Moreover, there is an increasing focus on secure elements and Trusted Platform Modules (TPMs) as part of higher-assurance security implementations. Certain projects, especially those that require stringent tamper-proof features and certifications such as Common Criteria or FIPS 140-3, will benefit from contributions from larger semiconductor manufacturers as well as emerging and specialized firms like SealSQ and TropicSquare.

As the market transforms, it has also seen the emergence of industry specifications that are quickly becoming standards. Noteworthy mentions include SESIP, Matter, and Qi wireless charging standards. These specifications are gaining traction similar to previous benchmarks like IEC 62443 for industrial applications and ISO 21434 in the automotive sector. OEMs are eager to integrate these standards to not only comply with the CRA but also with complementary regulations including NIS2 and the U.S. NISTIR 8259A for federal government applications.

Security Integration: Beyond Compliance

While embedded hardware security will not singularly resolve all regulatory compliance challenges, it serves as a foundational element crucial for broad sections of the IoT ecosystem. Beyond mere compliance, these technologies have the potential to significantly enhance product lifecycles. They enable in-field updates and improved service delivery, which are crucial for maintaining user engagement and satisfaction.

ABI Research’s findings in their Digital Authentication and Embedded Security Market Data report underscore the necessity of reliable security solutions as the industry adapts to ongoing regulatory transformations. The IOT market is growing, and as more devices connect, the demand for security innovations will inevitably increase.

Conclusion

The future of embedded security appears robust and promising amidst evolving regulatory landscapes. As OEMs gear up to meet the challenges of compliance, they are also presented with opportunities to enhance their technological offerings. For the embedded security market, the rising tide of IoT adoption, combined with stringent security regulations, heralds a new era of growth and innovation, paving the way for enhanced digital trust and user protection in an increasingly interconnected world. The importance of security within the IoT ecosystem cannot be overstated as we move towards a more digitally integrated future.

For further insights on these developments and more, ABI Research remains at the forefront, bridging technology solutions with market demands to foster and guide successful implementations.