Quantum Networking Market by Offering (Quantum Key Distribution (QKD), Quantum Random Number Generator (QRNG), Quantum Repeater, Quantum Memory, Photon Detectors, Software), End User Industry (BFSI, Government & Defense, IT & Telecom) - Global Forecast to 2029
Quantum Networking Market Size & Growth
[272 Pages Report] The global quantum networking market is projected to grow from USD 861.8 million in 2024 to USD 5,382.0 million by 2029, at a CAGR of 44.2% from 2024 to 2029. The quantum networking market is driven by the rising government investment in quantum technologies and the rapid advances in quantum cryptography and computing worldwide. The advancement in quantum computing has led to the increasing need for quantum-resistant networks to protect against data breaches, supporting market growth. Increasing concern over cyber-attacks and the escalating adoption of quantum technologies in secure communications in various industries, including banking & finance, government & defense, healthcare & life sciences, and IT & telecom, will further propel the market. Furthermore, the growing funding from public and private sectors to support quantum communication advancements will also support the growth in the quantum networking market. The quantum random number generator (QRNG) segment held the largest market share in 2023 due to the increasing demand for cryptographic security. QRNGs offer random numbers for encryption for quantum-resistant cryptography, driving their adoption in quantum networks.
Quantum Networking Market Forecast to 2029
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AI Impact on Quantum Networking Market The adoption of AI in the quantum networking ecosystem drives major advancements and optimization across various aspects of the market. One of the impacts is the quantum hardware control optimization. Here, machine learning algorithms are used to optimize the control parameters of the quantum processors, which are crucial for stable quantum network operations. Additionally, AI is crucial in developing threat detection and security protocols for quantum networks due to the growing security concern in quantum networks. AI-based tools and solutions also help speed up the development processes, further boosting the advancement in quantum networking technologies.
Quantum Networking Market Trends & Dynamics
Driver: Growing demand for quantum-secure communication solutions to mitigate cyber-attacks
The increasing rate of cyberattacks drives the quantum networking market. Traditional security methodologies struggle to keep up with complex cyber-attack threats. The May 2023 MOVEit hack, which was a cyberattack that targeted a flaw in the MOVEit managed files, for example, demonstrated how vulnerability in a file-sharing application could be exploited across multiple organizations. It also demonstrated how an attack on various organizations can facilitate data identification. Several emerging cyber threats are sophisticated, advanced attacks. They use zero-day vulnerabilities, ransomware, and the cyber operations of state-sponsored attacks, resulting in damage beyond the ability of traditional defenses and leading to a rise in costs. Additionally, old encryption schemes (e.g., RSA, ECC) assert less impact due to the rapid advances in quantum computing.
Traditional computing devices solve complex math, while quantum devices can conduct computation solving. Quantum computers have the potential to break widely used encryption algorithms by solving complex mathematical problems exponentially faster than classical computers. As such, the National Institute of Standards and Technology (NIST) has recognized this risk through its analysis and reports on the threat level and risk transitioning of quantum computers versus traditional cryptographic methods. It is working toward standardization of post-quantum cryptography.
Quantum Key Distribution (QKD) serves as a solution to potential risks associated with traditional encryption methodologies. This is aided by advancements in quantum networking that leverage the principles of quantum mechanics. QKD designs intelligent and more advanced encryption keys that are extremely challenging to intercept or decrypt without detection. Adopting post-quantum cryptography (PQC) solutions significantly enhances cybersecurity by addressing the limitations of current encryption methods. These advanced cryptographic techniques are designed to withstand attacks from both classical and quantum computers, effectively mitigating the risks posed by emerging quantum computing solutions such as universal quantum computers, quantum annealers, and photonic quantum computers, which are capable of running quantum algorithms, that could break widely-used public-key cryptography.
Restraint: High costs of quantum networking hardware
A major restraint in the quantum networking market is the high costs of quantum networking hardware and research & development. Single-photon detectors and sources required for quantum communication are expensive and resource-intensive. Therefore, the reduced budgets of organizations limit the adoption and integration capabilities of the quantum networking solution. These factors prove further advancements and cost reductions are required for broad market acceptance. In addition, government funding for quantum research is used to build up the required infrastructure, and research and technology development costs are high. The high cost of quantum networking limits large-scale adoption since it requires long-term financial commitment and huge resources following investments from the public and private sectors. This is expected to restrain the quantum networking market growth.
Opportunity: Increasing need for quantum networking technologies for secure financial transactions
The increasing deployment of quantum networking technologies in financial transactions creates lucrative opportunities for players in the global quantum networking market. Quantum Key Distribution (QKD) provides unparalleled security by exchanging encryption keys with absolute confidentiality, enabling secure communication and making it a crucial tool for safeguarding sensitive data in corporate, healthcare, and government environments. Security is critical for the banking industry due to the availability of sensitive client and proprietary information. Banks need to secure information while also ensuring the availability of data for transactions on a real-time basis. Quantum networks can provide near-impenetrable security in banking and other critical sectors, driving the market. These factors encourage companies to develop and implement advanced quantum networking technologies that address the specific needs of end-use industries.
Challenge: Vulnerabilities to interference, decoherence, and signal loss
In any quantum network, qubits the building blocks of quantum information-are easily corrupted by electromagnetic radiation and other forms of usual environmental noise, leading to errors in sending information and quantum state processing. Besides, decoherence explains a situation in which a quantum system loses its quantum effect due to interaction with the environment. This could potentially lead to qubits losing their quantum state and switching over to classical behavior, causing the failure of quantum information transmission and processing. As a signal travels within the communication channel, absorption can weaken or attenuate quantum information. At times, this can reduce or even destroy communication fidelity. This will further break the effective operation in practically problematic parts in connections that use optimal fiber states, where losses in the photon break the effective operation of the quantum network.
Quantum Networking Ecosystem
Quantum Random Number Generator (QRNG) segment held largest market share in 2023
The QRNG segment accounted for the largest market share in 2023. QRNG devices, which are essential for generating random numbers for cryptographic applications, gain momentum due to rapid integration into consumer and enterprise devices. Companies are developing next-generation quantum random number generators inside mobile handsets, IoT, and edge devices. In April 2022, ID Quantique (Switzerland) launched the Quantis QRNG chip, the first Quantum Random Number Generator designed and manufactured for mobile handsets, loT, and edge devices. It generates provably unbiased and unpredictable randomness with high entropy from the first bit. Therefore, advanced quantum random number generators have been adopted at an accelerated rate by businesses and consumers who seek security in all their digital interactions. Corresponding quantum networking solutions will drive investment as part of the broader trend of securing the quantum communication infrastructure.
Government & defense segment captured largest share of quantum networking market in 2023
Government & defense is likely to dominate the quantum networking market during the forecast period. This end-use industry applies quantum networking to secure classified information and enhance cryptography against sophisticated cyber threats. With the increasing sophistication and frequency of cyber threats, the demand for advanced solutions to protect sensitive information and maintain secure communication is growing in the defense sector. The latest in quantum networking for defense is the Defense Advanced Research Projects Agency (DARPA) Quantum-Augmented Network program. Through QuANET, DARPA will explore how integrating quantum and classical approaches to networking could provide quantum physics-based security capabilities to critical network infrastructures. The program will be the first to genuinely realize the security and covert advantages that quantum networks bring while taking advantage of the pervasive reach of classical networks. Companies, such as QuANET, provide a bridge between the communities of optical communications and quantum networking. Such innovations will drive the transition to a new networking paradigm, offering increased security to key defense infrastructures that can be scaled up to metropolitan area networks.
North America to register highest CAGR in quantum networking market during forecast period
North America is projected to exhibit the highest CAGR during the forecast period due to significant government investments, a strong ecosystem of research institutions and technology companies, and a rapidly growing commercial interest in quantum technologies across various industries such as finance, healthcare, and defense sectors which are exploring quantum networking applications. Considering that most major tech companies and startups operating in the region require heavy investment in the region, there is a significant flow of capital into quantum networking research & development. This investment is crucial for advancing the technology, building infrastructure, and bringing quantum networking solutions to the market. Companies, such as MagiQ Technologies, Qubitekk, Inc., Quantum Xchange, Qunnect Inc., Aliro Technologies, Inc., and QuSecure, Inc., are leading the charge with significant investments in quantum computing and networking in the region.
Quantum Networking Market by Region
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Top Companies Quantum Networking - Key Market Players
The quantum networking market is dominated by players, such as TOSHIBA CORPORATION (Japan), Quantumctek Co.,Ltd. (China), ID Quantique (Switzerland), HEQA Security (Israel), QuintessenceLabs (Australia), MagiQ Technologies (US), Terra Quantum (Switzerland), Crypta Labs Limited (UK), Quantum Xchange (US), and Qunnect Inc. (US). Apart from these, some of the emerging companies in the quantum networking market are Qubitekk, Inc. (US), Aliro Technologies, Inc. (US), QuNu Labs Private Limited. (India), Arqit Quantum Inc. (UK), Miraex (Switzerland), SpeQtral Pte Ltd (Singapore), KETS QUANTUM SECURITY LTD (UK), Aegiq Ltd. (Sheffield), QuBalt GmbH (Germany), SSH (Finland), QuSecure, Inc. (US), VeriQloud (France), Qrypt (New York), Quside Technologies. (Spain), and LuxQuanta Technologies S.L. (Spain).
Scope of the Quantum Networking Market Report
Report Metric |
Details |
Estimated Market Size | USD 861.8 million in 2024 |
Projected Market Size | USD 5,382.0 million by 2029 |
Growth Rate | at a CAGR of 44.2% |
Market size available for years |
2020–2029 |
Base year |
2023 |
Forecast period |
2024–2029 |
Forecast Units |
Value (USD Million) |
Segments covered |
Offering, End-user Industry, Application, and Region |
Geographies covered |
North America, Europe, Asia Pacific, and RoW |
Companies covered |
A total of 25 players have been covered. Major players include TOSHIBA CORPORATION (Japan), Quantumctek Co.,Ltd. (China), ID Quantique (Switzerland), HEQA Security (Israel), QuintessenceLabs (Australia), MagiQ Technologies (US), Terra Quantum (Switzerland), Crypta Labs Limited (UK), Quantum Xchange (US), and Qunnect Inc. (US), among others. |
Quantum Networking Market Highlights
This research report categorizes the quantum networking market Offering, Vertical, Application, and Region
Segment |
Subsegment |
By Offering: |
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By End User Industry: |
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By Application: |
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By Region: |
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Recent Developments
- In May 2024, Cisco became a corporate partner in the Chicago Quantum Exchange to enhance quantum communications and quantum-safe networking. Cisco Quantum Lab will collaborate on tapping the Chicago Quantum Network—a 124-mile quantum network—to develop secure quantum internet technologies. At the same time, it would work toward better national security and financial systems through quantum-resistant protocols and techniques.
- In March 2024, ID Quantique (IDQ) introduced Clarion KX, a quantum-enhanced key exchange platform to future-proof the security of the network for enterprises and telecom operators. This platform combines Quantum Key Distribution with advanced algorithm-based encryption to provide an out-of-band, secure key distribution process. It integrates NIST-approved QRNG for extreme security, wherein vulnerability mitigation against emerging quantum threats and “Harvest Now, Decrypt Later” cyber-attacks are handled.
- In December 2023, Aliro Quantum launched the Aliro Simulator, a modular quantum network design and testing tool. It models everything from small optical components to large networks, allowing examination into configurations and use cases before their actual deployment in the real world.
- In November 2023, TOSHIBA CORPORATION and SpeQtral Pte Ltd expanded their collaboration on Singapore’s National Quantum-Safe Networks+ Project. This would include scaling up deployments with Toshiba’s battle-tested fiber-based QKD and the Quantum Key Management System product in quantum-safe testbeds globally.
- In April 2023, Qunnect launched GothamQ, a quantum network distributing entangled photons across NYC’s telecom fibers, marking a significant step toward practical quantum networking and the Quantum Internet.
Frequently Asked Questions:
At what CAGR is the quantum networking market expected to grow from 2024 to 2029?
The global quantum networking market is expected to exhibit a CAGR of 44.2% from 2024 to 2029.
Which region is expected to account for the largest market share?
North America is expected to dominate the quantum networking market during the forecast period, owing to the robust tech ecosystem and the increased investments in quantum technologies by major tech companies, such as IBM, Google, and Microsoft.
Who are the leading players in the global quantum networking market?
Key companies operating in the global quantum networking market include TOSHIBA CORPORATION (Japan), Quantumctek Co.,Ltd. (China), QuintessenceLabs (Australia), ID Quantique (Switzerland), and HEQA Security (Israel).
What are some of the major applications in the quantum networking market?
Secure communication, distributed quantum computing, quantum sensing and metrology, quantum clock synchronization, and secure financial transactions are some of the major applications in the quantum networking market.
What factors will create opportunities for players in the quantum networking market?
Expanding use cases in secure communications and financial transactions and the significant funding and initiatives to implement quantum technologies will create lucrative opportunities for players in the quantum networking market during the forecast period.
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The research process for this technical, market-oriented, and commercial study of the quantum networking market included the systematic gathering, recording, and analysis of data about companies operating in the market. It involved the extensive use of secondary sources, directories, and databases (Factiva, Oanda, and OneSource) to identify and collect relevant information. In-depth interviews were conducted with various primary respondents, including experts from core and related industries and preferred manufacturers, to obtain and verify critical qualitative and quantitative information as well as to assess the growth prospects of the market. Key players in the quantum networking market were identified through secondary research, and their market rankings were determined through primary and secondary research. This included studying annual reports of top players and interviewing key industry experts, such as CEOs, directors, and marketing executives.
Secondary Research
In the secondary research process, various secondary sources were used to identify and collect information for this study. These include annual reports, press releases, and investor presentations of companies, whitepapers, certified publications, and articles from recognized associations and government publishing sources. Research reports from a few consortiums and councils were also consulted to structure qualitative content. Secondary sources included corporate filings (such as annual reports, investor presentations, and financial statements); trade, business, and professional associations; white papers; Journals and certified publications; articles by recognized authors; gold-standard and silver-standard websites; directories; and databases. Data was also collected from secondary sources, such as the International Trade Centre (ITC) (Switzerland), and the International Monetary Fund (IMF).
Primary Research
Extensive primary research was accomplished after understanding and analyzing the quantum networking market scenario through secondary research. Several primary interviews were conducted with key opinion leaders from both demand- and supply-side vendors across four major regions—North America, Europe, Asia Pacific, and RoW. Approximately 30% of the primary interviews were conducted with the demand side, and 70% with the supply side. Primary data was collected through questionnaires, emails, and telephonic interviews. Various departments within organizations, such as sales, operations, and administration, were contacted to provide a holistic viewpoint in the report.
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Market Size Estimation
In the complete market engineering process, both top-down and bottom-up approaches were used, along with several data triangulation methods, to estimate and forecast the size of the market and its segments and subsegments listed in the report. Extensive qualitative and quantitative analyses were carried out on the complete market engineering process to list the key information/insights pertaining to quantum networking market.
The key players in the market were identified through secondary research, and their rankings in the respective regions determined through primary and secondary research. This entire procedure involved the study of the annual and financial reports of top players, and interviews with industry experts such as chief executive officers, vice presidents, directors, and marketing executives for quantitative and qualitative key insights. All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources. All parameters that affect the markets covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated, supplemented with detailed inputs and analysis from MarketsandMarkets, and presented in this report.
Quantum Networking Market: Bottom-Up Approach
The bottom-up procedure was employed to arrive at the overall size of the quantum networking market from revenues of the key players and their share in the market. The overall market size was calculated on the basis of the revenues of the key companies identified in the market.
Quantum Networking Market: Top-Down Approach
In the top-down approach, the overall size of the quantum networking market was used to estimate the size of the individual markets (mentioned in the market segmentation) through percentage splits obtained from secondary and primary research. To calculate the size of the specific market segments, the size of the most appropriate parent market was used to implement the top-down approach. The bottom-up approach was also implemented for the data extracted from the secondary research to validate the size of various segments of the quantum networking market. The share of each company in the market was estimated to verify the revenue shares used earlier in the bottom-up approach. With the data triangulation procedure and the validation of data through primaries, sizes of the parent market and each individual market were determined and confirmed. The data triangulation procedure used for this study has been explained in the next section.
Data Triangulation
After arriving at the overall market size from the market size estimation process explained above, the total market was split into several segments and subsegments. Data triangulation and market breakdown procedures were employed, wherever applicable, to complete the overall market engineering process and arrive at the exact statistics for all segments and subsegments. The data was triangulated by studying various factors and trends from both demand and supply sides. Along with this, the market size was validated using both top-down and bottom-up approaches.
Market Definition
Quantum networking is an emerging technology that uses quantum mechanics to enable secure, high-speed communication over existing networks. Quantum networks make use of certain quantum phenomena that classical networks are unable to employ, such as superposition, and quantum entanglement. The photon exists in a superposition of all possible quantum states, each with a corresponding probability, prior to measurement. These are used across various industries like banking & finance, government & defense, healthcare & life sciences, IT & telecom, energy & utilities, manufacturing, and others.
Key Stakeholders
- Quantum networking device manufacturers
- Research organizations and universities
- Original equipment manufacturers (OEMs)
- Technology standard organizations, forums, alliances, and associations
- Analysts and strategic business planners
- Government bodies, venture capitalists, and private equity firms
- Existing and prospective end users
- Venture capitalists, private equity firms, and startup companies
- Distributors and traders
Report Objectives
- To define, describe, segment, and forecast the quantum networking market size, in terms of value, based on offering, vertical, and region
- To forecast the market size, in terms of value, across North America, Europe, Asia Pacific, and the Rest of the World (RoW)
- To present detailed information regarding the major factors influencing the growth of the market (drivers, restraints, opportunities, and challenges)
- To provide an ecosystem analysis, case study analysis, patent analysis, technology analysis, ASP analysis, Porter’s Five Forces analysis, investment and funding scenario, and regulations pertaining to the market.
- To offer a comprehensive overview of the value chain of the quantum networking market ecosystem
- To critically analyze 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 shares and core competencies
- To assess the opportunities in the market for stakeholders and describe the competitive landscape of the market
- To analyze competitive developments in the market, such as collaborations, agreements, partnerships, product developments, and research and development (R&D)
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:
Company Information
- Detailed analysis and profiling of additional market players (up to 7)
Growth opportunities and latent adjacency in Quantum Networking Market