Hardware Security Modules Market Share, Size, Trends, Industry Analysis Report, By Deployment Type (On-premise, Cloud); By Type; By Application; By Vertical; By Region; Segment Forecast, 2022 - 2030
- Published Date:Oct-2022
- Pages: 122
- Format: PDF
- Report ID: PM2679
- Base Year: 2021
- Historical Data: 2018 - 2020
Report Outlook
The hardware security modules market was valued at USD 1.04 billion in 2021 and is expected to grow at a CAGR of 12.9% during the forecast period. Increasing adoption of cloud-based services and rising data security concerns among enterprises are factors responsible for the growth of the hardware security modules market.
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Rising penetration of data security concerns in government and defense sectors also spur market growth. These sectors are at higher risk of cyber-attack because valuable data they have. Thus, increasing data breaches and cyber-attacks are the major factors driving the market.
Increased adoption of 5G networks across the globe has created various opportunities for market players. Increased collaborations and expansions have resulted in the market's growth. For instance, in 2022, Ericsson included the Thales hardware security module in its 5G Core authentication solution to reduce the rising vulnerability risks in the larger 5G ecosystem.
The Covid-19 pandemic had a negative impact on the hardware security module market. The pace of new projects has slowed globally, and the demand for elemental semiconductors has decreased. However, in 2021, the state-run administrations partially opened the economy, which enabled the market for hardware security modules to recover gradually. Additionally, the need for hardware security modules is surging due to the widespread trend toward advanced installations, which, as a result, accelerates the market's growth.
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Industry Dynamics
Growth Drivers
An increase in data protection due to increased cyber-attacks has driven the growth of the hardware security modules market owing to its tamper-proof property. The data is a sensitive and confidential thing. Many large enterprises and companies are targets of hackers. These companies widely adopted HSM to secure their application. Thus, an increase in data breaches and cyberattacks accelerates the market.
Increasing adoption of cloud-based services is the second factor influencing the market’s growth. The HSMs provide physical access protection, secure management of key material, generation of keys, and a secure execution environment in cloud services. Furthermore, technological advancements for developing advanced HSM services are anticipated to stimulate the market’s growth.
For instance, in 2022, Marvell launched LiquidSecurity 2 module adapter for enabling encryption, key management, authentication, and other HSM services in the cloud. This HSM service will deliver 3X faster transaction processing performance and 10X more key storage to reduce ownership costs.
The growing e-commerce industry with increased mobile banking applications has resulted in rising digital transactions. Thus, it pushed the adoption of a data security system which resulted in the high demand for HSM systems for these applications.
Report Segmentation
The market is primarily segmented based on deployment type, type, application, vertical, and region.
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By Deployment Type |
By Type |
By Application |
By Vertical |
By Region |
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Cloud segment accounted for the largest market share in 2021
The cloud-based segment acquired the most considerable market share in 2021 due to its ability to carry out cryptographic operations and provide complete control over keys via separating tasks.
It's not always possible to employ on-premises HSM hardware in cloud settings. Customers may require to use HSMs located in the data centers of cloud service providers. When a service provider permits a device to be used on-premises, connectivity problems may cause the system to face undesirable latency.
Cloud-based HSMs are especially useful for small and medium-sized companies that already rely on other IT services and are hesitant to invest in on-premises HSMs due to the high cost. Several companies, including Amazon, Microsoft, IBM, and Thales, have started offering cloud-based HSM solutions to their customers.
USB-based/portable type acquired the largest market share in 2021
The USB-based /portable type hardware security modules accounted for the largest market share in 2021 due to their suitability for offline situations, where the modules are stored safely in USB when not in use. Using USB-based hardware security modules, organizations can offer high-assurance cryptographic solutions at low cost. This module is suitable for laptops, workstations, and desktops due to its portability and USB connectivity.
Modern use cases like cryptocurrency exchanges, IoT gateways and proxies, and cloud services are secured by portable modules that fit conveniently into the front USB slot of computers and servers. All these applications are responsible for the segment’s growth.
Payment processing segment accounts for the significant market share in 2021
The payment processing segment acquired the most considerable market share in 2021 due to their use in the financial services industry for cryptographic operations to perform PIN translation and verification, card verification, card production, and personalization, electronic funds interchange (EFTPOS, ATM), cash-card reloading, EMV transaction processing, and key generation and injection.
Payment HSMs are a vital component of the payments system's security, and the Payment Card Industry (PCI) has mandated their use in processing payments and PINs. They must also be PCI security-certified in order to use them.
BFSI is expected to account the largest market share in 2021
Banking, financial services, and insurance is anticipated to witness the most significant market revenue over the forecast period as HSMs in this sector have some universal benefits such as automated digital signing, cloud encryption, time stamping, debit and credit card key generation, and network device management including key rotation.
The BFSI vertical has been a top target for hackers who utilize devious techniques to steal user credentials, tax records, insurance data, and bank account and credit/debit details. This has boosted the demand for hardware security modules.
Europe dominated the regional market in 2021
Europe accounts for the largest market share in 2021 due to growing awareness regarding data security provided by HSMs. Increasing adoption of cloud-based technologies and digital advancements in countries such as UK and Netherlands have resulted in the region’s growth for the hardware security modules market.
The scope of hardware security modules and cybersecurity IoT has expanded in the North American region, which is anticipated as the fastest-growing region due to laws related to cybersecurity threats. Countries, including the U.S. and Canada, are leading progressive growth in the usage of hardware security modules. Small and medium-sized enterprises in this region are increasingly adopting cloud-based HSM, primarily due to its flexibility and affordability.
Competitive Insight
Some major players operating in the global market include ATOS SE, Cavium, Entrust Datacard, Exceet Group, Futurex, Gemalto, Synopsys, Inc, Thales e-Security Inc., Ultra Electronics, Utimaco, and Yubico.
Recent developments
In 2020, Fujitsu partnered with Thales group by integrating its cloud HSM service to offer secure lifecycle management services to customers.
Hardware Security Modules Market Report Scope
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Report Attributes |
Details |
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Market size value in 2022 |
USD 1.13 billion |
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Revenue forecast in 2030 |
USD 2.99 billion |
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CAGR |
12.9 % from 2022 - 2030 |
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Base year |
2021 |
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Historical data |
2018 - 2020 |
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Forecast period |
2022 - 2030 |
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Quantitative units |
Revenue in USD billion and CAGR from 2022 to 2030 |
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Segments Covered |
By Deployment Type, By Type, By Application, By Vertical, By Region |
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Regional scope |
North America, Europe, Asia Pacific, Latin America; Middle East & Africa |
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Key Companies |
ATOS SE, Cavium, Entrust Datacard, Exceet Secure Solutions GmbH, Futurex, Gemalto, Synopsys, Inc, Thales, Ultra Electronics, Utimaco, and Yubico. |
