Hardware Security Modules Market Size, Share, Statistics and Industry Growth Analysis Report by Deployment Type (Cloud, On-premise), Type (LAN Based /Network Attached, PCI Based/Embedded Plugins, USB Based/Portable, Smart Cards), Application, Vertical and Region - Global Forecast to 2028
Updated on : January 05 , 2024
Hardware Security Modules Market Size & Share
The global hardware security modules market size was valued at USD 1.2 billion in 2023 and is estimated to reach USD 2.3 billion by 2028, registering a CAGR of 13.5% during the forecast period.
The growth of the hardware security modules market share is driven by increasing data breaches and cyberattacks, need to effectively manage cryptographic keys, and emergence of digital transactions, electronic payments leading to rise in the need for protecting sensitive financial data.
Hardware Security Modules Market Statistics and Forecast to 2028
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Hardware Security Modules Market Trends:
Drivers: Need to follow stringent data security compliances
Lawmakers and regulators worldwide are improving the existing data security compliances, implementing new legal frameworks, and defining new data security regulations to respond to internal and external risks, for instance, data security risks from the members of the IT team who have knowledge of and access to networks, data centers, and admin accounts. As requirements for data protection compliance are becoming stringent, the use of point solutions to patch holes in data security compliance requirements is also increasing, resulting in rising demand for hardware security modules. These modules help enterprises create a common, extensible implementation infrastructure that offers compliance regimes with the protection of data-at-rest using encryption, enterprise key management, access control, and security intelligence. Regulations such as FIPS 140-2 Level 3, PCI DSS, NIST, and ANSI must be followed by the manufacturers of hardware security modules.
Restraint: Susceptibility to cyberattacks and security breaches
It is as important to secure hardware for everyday business operations as it is to securing software. The physical device security often gets neglected. As hardware security module updates are expensive, vulnerabilities exist. The cybersecurity systems need to be regularly updated by the companies, in order to adapt to innovative technologies. If a vulnerability is detected, it becomes costly to upgrade hardware security modules. These modules are susceptible to cyberattacks because of irregular security upgrades, remote deployment, a long device lifecycle, and attack replication. Due to the vulnerabilities, there is a possibility that a remote, unauthenticated attacker can gain complete control of the vendor’s hardware security module, enabling remote retrieval of all hardware security module data, including administrator credentials and cryptographic keys. By taking advantage of a cryptographic vulnerability, attackers can also upload modified firmware to the hardware security module.
Opportunity: Adoption of blockchain and cryptocurrencies
The increasing adoption of blockchain and cryptocurrencies presents a significant opportunity for HSMs. These technologies rely heavily on cryptographic keys for security, and HSMs can provide a secure and scalable key management solution for these applications. Cryptocurrencies rely heavily on cryptographic keys for transactions and wallet security. HSMs provide a secure environment for generating, storing, and managing these keys, which is crucial for protecting digital assets and ensuring the integrity of blockchain networks. HSMs can be used to create secure hardware wallets that are virtually immune to hacking and malware attacks. This enhances the security of cryptocurrency holdings for individuals and organizations. Cryptocurrency exchanges are prime targets for cyberattacks. HSMs can help secure the private keys used in the exchange's wallets, preventing unauthorized access and potential theft. Blockchain platforms like Ethereum use smart contracts for various applications. HSMs can provide secure execution environments for smart contracts, ensuring that they run as intended and protecting sensitive data within these contracts. ility: As blockchain networks evolve, there is a need for HSMs to facilitate secure cross-chain interoperability, allowing assets to move seamlessly between different blockchains. HSMs can play a role in the security of tokenized assets, whether they represent real-world assets or digital assets within a blockchain ecosystem. Overall, the adoption of blockchain and cryptocurrencies introduces a wide array of use cases and security challenges that HSMs are well-suited to address. These devices enhance the security, integrity, and regulatory compliance of blockchain-based systems, making them an essential component of the cryptocurrency ecosystem.
Challenge
Need for continuous evolvement in HSMs to meet the changing needs of the cybersecurity landscape. The cybersecurity landscape is characterized by rapid technological advancements, including new attack vectors, encryption standards, and emerging threats. HSMs must keep pace with these developments to remain effective. The emergence of quantum computing poses a significant threat to existing cryptographic methods. The HSM industry must address the growing demand for quantum-safe cryptography as current cryptographic algorithms may become obsolete with the development of quantum computers. HSMs must support new algorithms and provide a smooth transition to the post-quantum world. With the proliferation of cloud and edge computing, HSMs need to offer solutions that are compatible with these environments, ensuring the security of data both in transit and at rest.
Hardware Security Modules Market Segmentation
Hardware Security Modules Market Segmentation
Medical & life sciences segment to exhibit the highest growth in hardware security modules market during the forecast period.
The medical & life sciences segment is expected to exhibit the second-highest growth for the hardware security modules market share during the forecast period. The growing need to protect patient identity, related data, and payment information is accelerating the market growth across this vertical. Stringent regulations such as HIPAA and cyber-attacks on medical institutions are driving the need for HSM solutions and services. medical & life sciences sector is witnessing rapid growth in the adoption of hardware security modules. These modules play a vital role in ensuring the security of telematics infrastructure, for example, the electronic health card (eGK) in Germany, facilitates the secure processing and transmission of patient data among trusted participants in the healthcare system, such as doctors, caregivers, hospitals, and pharmacies. HSMs are vital for ensuring the integrity and confidentiality of data on these cards. Additionally, pharmaceutical companies depend on strong security and privacy measures during the development of new medications, making hardware security modules an essential component of their operations.
The market for PKI and Credential Management application segment is expected to witness notable growth during the forecast period
The PKI and Credential Management segment is expected to exhibit notable growth during the forecast period. Hardware Security Modules (HSMs) play a crucial role in ensuring the security of cryptographic operations, especially in the context of Public Key Infrastructure (PKI) and Credential Management. HSMs generate, store, and protect the private keys associated with digital certificates in a PKI. This ensures that the private keys are never exposed outside the secure boundary of the HSM. HSMs can also be used to generate and safeguard encryption keys used for securing user credentials, ensuring that sensitive information remains confidential. HSMs can facilitate secure communication between different components of a PKI or credential management system. This ensures that sensitive information is exchanged in a protected manner.
On-premises segment to hold the larger share of the Hardware security modules market, by deployment type, in 2022
The on-premise segment dominated the hardware security modules industry size in 2022. Traditionally, HSMs were set up “on-premise” or within the enterprise data center. The prevalence of cloud computing, especially over the last few years, has seen the emergence of “Cloud based HSMs” or “HSM as a Service”. On-premise HSMs allow organizations to retain full control over their cryptographic keys and sensitive data. This is particularly important in regions where data sovereignty laws require organizations to store and manage their cryptographic keys within specific geographic boundaries. On-premise HSMs provide greater flexibility for customization and integration with existing infrastructure and security policies. Organizations can tailor the HSM environment to meet their specific needs, ensuring seamless integration with other on-premise systems. Some applications, particularly those with high-performance requirements, benefit from on-premise HSMs due to lower latency and faster access times. This is especially relevant in scenarios where rapid cryptographic processing is critical. Organizations having with predictable workloads, where the likelihood of business requirements and transaction volumes exceeding the capacity is less, prefer on-premise HSM solutions.
Hardware Security Modules Market Regional Analysis
Hardware security modules market in North America estimated to grow at the fastest rate during the forecast period
The hardware security modules market size , in North America is expected to grow at the highest CAGR during the forecast period. North America is expected to witness highest growth during the forecast period. Changing customer preferences toward the adoption of contactless cards and digital-first credit cards are also expected to fuel the growth of hardware security modules in North America. The surge in cyberattacks, especially payment frauds across industries, is expected to drive the need for HSM solutions and services across North America. HSMs are widely being adopted in the financial sector to secure financial transactions, protect sensitive customer information, and comply with regulatory standards such as the Gramm-Leach-Bliley Act (GLBA) and PCI DSS. The US government and various agencies place a strong emphasis on national security and the protection of critical infrastructure. Industries such as defense, aerospace, and government services, which are significant in North America, rely on HSMs to secure sensitive information and communications.
Hardware Security Modules Market Statistics by Region
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Top Hardware Security Modules Companies - Key Market Players:
Major vendors in the hardware security modules companies include Thales (France), Utimaco (Germany), International Business Machines Corporation (IBM) (US), STMicroelectronics (Switzerland), Microchip Technology (US), Infineon Technologies (Germany), Swift (US), Futurex (US), Atos SE (France), and Yubico are some of the key players in the hardware security modules market.
Hardware Security Modules Market Report Scope :
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Report Metric |
Details |
| Estimated Market Size | USD 1.2 Billion in 2023 |
| Projected Market Size | USD 2.3 Billion by 2028 |
| Growth Rate | CAGR of 13.5% |
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Market size available for years |
2019—2028 |
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Base year |
2022 |
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Forecast period |
2023—2028 |
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Geographic regions covered |
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Companies covered |
Thales (France), Utimaco (Germany), International Business Machines Corporation (IBM) (US), Futurex (US), Infineon Technologies (Germany), Microchip Technology (US), STMicroelectronics (Switzerland), Swift (US), Atos SE (France), and Yubico (US), Securosys (Switzerland), SPYRUS (US), Ledger (France), Ultra Electronics (UK), AdwebTech (India), Efficient India (India), Lattice Semiconductor (US), Ellipticsecure (UK), Amazon Inc. (US), Entrust Security (US), ESCRYPT (Germany), Beijing Sansec Technology Development Co., Ltd (SANSEC) (China), Fortanix (US), JISA Softech (India), Microsoft (US), Nitrokey (Germany), Kryptoagile (India), and Kryptus (Brazil). |
Hardware Security Modules Market Highlights
This research report categorizes the hardware security modules market based on deployment type, type, application, Trends, Growth , vertical, and region.
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Recent Developments in Hardware Security Modules Industry :
- In October 2023, Microchip Technology (US) announced a new family of PIC32CZ CA 32-bit microcontrollers with a 300 MHz Arm Cortex-M7 processor, an integrated Hardware Security Module (HSM), and a wide range of connectivity and Flash memory options for added flexibility. The new family of PIC32CZ CA devices includes the PIC32CZ CA90 with a HSM or the PIC32CZ CA80 without the integrated HSM. The HSM in the PIC32CZ CA90 is a monolithic solution that provides advanced security for industrial and consumer applications. The HSM operates as a secure subsystem with a separate MCU on board that runs the firmware and security features including hardware secure boot, key storage, cryptographic acceleration, true random number generator and more.
- In August 2023, Thales (France) announced the launch of Thales payShield Cloud HSM, a subscription-based digital payments security service built on its market-leading payShield 10K Payment Hardware Security Module (HSM) technology to help customers accelerate the adoption of cloud-based payments infrastructure.
Key Questions Addressed in the Report:
What will be the dynamics for the adoption of hardware security modules market based on the deployment type?
The cloud segment is projected to hold a larger market share in 2028. Cloud-based HSMs provide the ability to scale resources dynamically based on demand. This scalability is particularly beneficial for organizations with fluctuating workloads or those experiencing rapid growth. Cloud-based HSMs often follow a pay-as-you-go model, allowing organizations to pay only for the resources they use. This can be more cost-effective than investing in and maintaining on-premise hardware, especially for smaller or resource-constrained organizations. These advantages, along with the rising demand for cloud services for data storage, are driving the segment’s growth.
Which vertical segment will contribute more to the overall market share by 2028?
The BFSI vertical segment will contribute the most to the hardware security modules market. The hardware security module market for the BFSI vertical held the largest share in 2022 and is expected to retain its dominant position throughout the forecast period. The BFSI vertical has undergone significant changes in operations to improve customer experience. With high technology adoption, the vertical is exposed to many vulnerabilities used by hackers to exploit sensitive information related to identities such as names, bank accounts, and credit card details. The increased digitization of banking processes, such as digital onboarding and digital payments, aimed toward improving the customer experience, is driving the need for hardware security modules around the globe. The presence of stringent regulations, such as the Bank Secrecy Act, GDPR, and PSD2, is also contributing to the increased demand for HSMs in the BFSI vertical.
How will technological developments such as artificial intelligence (AI), machine learning change the hardware security modules market landscape in the future?
AI and ML algorithms can be integrated with HSMs to continuously monitor and analyse patterns of access and usage of cryptographic keys. By establishing a baseline of normal behaviour, any deviations from these patterns can trigger alerts, indicating potential security breaches. AI-driven threat intelligence platforms can feed real-time threat information to HSMs, enabling them to proactively adjust security policies and cryptographic key protection based on the latest threat landscape. AI and ML can improve the adaptive authentication process by analysing a wide range of user behaviour data. HSMs can use this information to enhance the strength of user authentication, ensuring that access is granted only to legitimate users.
Which region is expected to adopt hardware security modules at a fast rate?
North American region is expected to adopt hardware security modules at the fastest rate. g Countries such as the US and Mexico are expected to have a high potential for the future growth of the market.
What are the key market dynamics influencing market growth? How will they turn into strengths or weaknesses of companies operating in the market space?
The healthcare and life sciences sector is witnessing rapid growth in the adoption of hardware security modules. These modules play a vital role in ensuring the security of telematics infrastructure, for example, the electronic health card (eGK) in Germany, facilitates the secure processing and transmission of patient data among trusted participants in the healthcare system, such as doctors, caregivers, hospitals, and pharmacies. HSMs are vital for ensuring the integrity and confidentiality of data on these cards. Additionally, pharmaceutical companies depend on strong security and privacy measures during the development of new medications, making hardware security modules an essential component of their operations.
The healthcare sector is subject to stringent data protection regulations like HIPAA in the United States and GDPR in the European Union. HSMs help organizations achieve compliance by ensuring the confidentiality, integrity, and availability of protected health information (PHI). With the rise of telemedicine and remote healthcare services, HSMs are essential for securing online patient consultations, electronic prescriptions, and telehealth platforms.
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The study involved four major activities in estimating the size for hardware security modules market. Exhaustive secondary research was done to collect information on the market, peer market, and parent market. The next step was to validate these findings, assumptions, and sizing with industry experts across value chains through primary research. The bottom-up approach was employed to estimate the overall market size. After that, market breakdown and data triangulation were used to estimate the market size of segments and subsegments.
Secondary Research
In the secondary research process, various sources were used to identify and collect information important for this study. These include annual reports, press releases & investor presentations of companies, white papers, technology journals, and certified publications, articles by recognized authors, directories, and databases.
Secondary research was mainly used to obtain key information about the supply chain of the industry, the total pool of market players, classification of the market according to industry trends to the bottom-most level, regional markets, and key developments from the market and technology-oriented perspectives.
Primary research was also conducted to identify the segmentation types, key players, competitive landscape, and key market dynamics such as drivers, restraints, opportunities, challenges, and industry trends, along with key strategies adopted by players operating in the hardware security modules market. Extensive qualitative and quantitative analyses were performed on the complete market engineering process to list key information and insights throughout the report.
Primary Research
Extensive primary research has been conducted after acquiring knowledge about the hardware security modules market scenario through secondary research. Several primary interviews have been conducted with experts from both demand (end users) and supply side (hardware security modules (HSMs) providers) across 4 major geographic regions: North America, Europe, Asia Pacific, and RoW. Approximately 80% and 20% of the primary interviews have been conducted from the supply and demand side, respectively. These primary data have been collected through questionnaires, emails, and telephonic interviews.
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Market Size Estimation
In the complete market engineering process, both the top-down and bottom-up approaches were implemented, along with several data triangulation methods, to estimate and validate the size of the hardware security modules market and various other dependent submarkets. Key players in the market were identified through secondary research, and their market share in the respective regions was determined through primary and secondary research. This entire research methodology included the study of annual and financial reports of the top players, as well as interviews with experts (such as CEOs, VPs, directors, and marketing executives) for key insights (quantitative and qualitative).
All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources. All the possible parameters that affect the markets covered in this research study were accounted for, viewed in detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated and supplemented with detailed inputs and analysis from MarketsandMarkets and presented in this report.
Hardware Security Modules Market: Bottom-Up Approach
Hardware Security Modules Market: Top-Down Approach
Data Triangulation
After arriving at the overall market size from the market size estimation process as explained above, the total market has been split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments, market breakdown and data triangulation procedures have been employed, wherever applicable. The data has been triangulated by studying various factors and trends from both demand and supply sides. Along with this, the market has been validated using top-down and bottom-up approaches.
Definition
A hardware security module is a cryptoprocessor used for safeguarding and managing cryptographic keys and accelerating cryptographic operations using the keys. The main features of a hardware security module include onboard key generation and storage, accelerated symmetric and asymmetric encryption, and backup of sensitive materials in an encrypted form. These modules typically offer protection features such as strong authentication and physical tamper resistance and are generally used to protect critical data processing activities and enforce security policies and access control. Hardware security modules traditionally come in the form of plugin cards or external network-connected appliances directly attached to a computer or network server.
Key Stakeholders
- Senior Management
- End User
- Finance/Procurement Department
- R&D Department
Report Objectives
- To describe and forecast the hardware security modules market, in terms of value, segmented based on type, deployment type, application, vertical, and region
- To describe and forecast the hardware security modules market, in terms of volume, based on type
- To provide detailed information regarding the factors influencing the market dynamics (drivers, restraints, opportunities, and challenges)
- To analyze opportunities in the market for stakeholders by identifying the high-growth segments of the hardware security modules market
- To forecast the market for various segments with respect to four main regions: North America, Europe, Asia Pacific, and Rest of the World (RoW), in terms of value
- To provide a detailed overview of the industry’s value chain, along with industry trends, technology trends, case studies, security standards, and Porter’s five forces analysis
- To strategically analyze the micromarkets1 with respect to individual growth trends, prospects, and contributions to the total market
- To strategically profile the key players and comprehensively analyze their market rankings and core competencies2
- To map the competitive intelligence based on company profiles, key player strategies, and game-changing developments, such as product launches, collaborations, and acquisitions
- To benchmark market players using the proprietary Company Evaluation Quadrant, which analyzes market players on various parameters within the broad categories of business strategy excellence and strength of product portfolio
Available Customizations
With the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report:
Product Analysis
- Product matrix that gives a detailed comparison of the product portfolio of each company
Company Information
- Detailed analysis and profiling of additional market players (up to 7)
Generating Response ...
Growth opportunities and latent adjacency in Hardware Security Modules Market