Hardware Security Modules Market

Global Hardware Security Modules Market Size (2024-2032):

The size of the global hardware security modules market was worth USD 1.34 billion in 2023. The global market is anticipated to grow at a CAGR of 10.9% from 2024 to 2032 and be worth USD 3.40 billion by 2032 from USD 1.49 billion in 2024. 

Market Scenario

A hardware security module can be described as a physical compounding device to safeguard and manage secrets. They can perform encryptions and decryption functions for various applications such as digital signature, authentication, and other cryptographic operations. These are available in plug-in cards or external devices that attach directly to computers. In addition, one or more secure crypto-processor chips can be included in the HSMs. 

Market Drivers

Increased requirement for hardware security solutions due to the surge in data breaches and cyber-attacks acts as a market driver.

Large organizations and government institutions prey on hackers for data breaches or cyber-attack. Generally, a data breach is stealing information from the system without the prior knowledge of the system’s owners. The stolen information may be sensitive that can be used the hackers for unauthorized purposes. The cyber-attacks nowadays are mostly from work-from-home employees who are not prepared to protect data from unauthorized use. To protect the data and systems from such unauthorized use, prevent stealing sensitive information, and protect from cyber-attack/data breaches requires a high-security solution offered by the hardware. The secure cryptographic keys the hardware security modules used have different applications like document signing, secure socket layers, authentication, and others. These potential benefits from the hardware security solutions will propel the hardware security modules' market growth and development. 

Market Restraints

The hardware security modules are provided with frequent updates to be installed, which might be expensive. The mandatory upgradation to the new updates in cyber security systems is required for the organizations to adopt the new technologies. The vulnerability of the hardware security modules to the cyber-attacks is due to irregular security upgrades and remote deployment. The vulnerability proses the user’s system to unauthorized attackers by giving easy access to complete control. The expensive and improper upgradation of the security system features can restrain market adoption and limit growth.

Market Opportunities

The hardware security modules market could experience a significant opportunity with technological advancements in IoT and increased demand for hardware security modules as 5G becomes the mainstream in the HSM adapters. 

COVID-19 Impact on the Hardware Security Modules Market

The moderate impact of the COVID-19 pandemic on the hardware security modules market is noticed, but a significant impact is seen on the market players in the supply chain. The new projects aren’t started during the period, and temporary stoppage of the operations of the existing projects is observed around the world. Many workmen are restricted to staying at home to avoid the spread of the COVID-19 virus, which led to the struggle in managing the operations in the industries. The pandemic affects the supply chain because of the government's lockdown and travel restrictions. The lack of skilled workmen and cancellation/delayed projects are consequences of the pandemic across several nations worldwide. On the contrary, the market has also seen a positive impact with the increase in cyberattacks, rise in cloud-based service adoption, and high surge in digital payments could be a favorable feature for the market growth during and post-pandemic.

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Market Segmentation

Global Hardware Security Modules Market Analysis By Type

• LAN Based/ Network Attached
• PCI-Based/ Embedded Plugins
• USB-Based/ Portable
• Smart Cards

The USB-based/portable type hardware security module (HSM) is expected to have a large market share in the hardware security modules market during the forecast period. These portable type HSM are suitable for offline situations that provide safe storage of the modules when the USB is not in use. In addition, this type of HSM at low cost offers high-assurance cryptographic solutions to organizations. The wider applications and suitability for usage in various electronic devices like laptops, computers, workstations, and others are responsible for the market growth.

Global Hardware Security Modules Market Analysis By Application

• Payment Processing
• Code & Document Signing
• Authentication
• Application-Level Encryption
• Database Encryption
• PKI & Credential Management
• SSL & TSL

HSM application in the payment processing segment is expected to have a considerable market share in the hardware security modules market. The reasons include usage in the cryptographic operations for performing translation and verification of PIN, card production, verification, personalization, EMV transaction processing, and others in the financial service industry. Furthermore, in the payment system’s security and Payment Card Industry (PCI), payment HSMs have become a vital component for the mandated use in processing payments and PINs. These important applications drive the growth of payment HSMs in the market. 

Global Hardware Security Modules Market Analysis By Industry Vertical

• Consumer Goods & Retail
• BFSI (Banking, Financial Services, and Insurance)
• Aerospace & Defense
• Public Sector/ Government
• Energy & Power
• Industrial Manufacturing
• Medical & Life Sciences
• Transportation
• IT & Telecommunications

Consumer goods & retail is expected to contribute more to the market in terms of revenue and CAGR in the Hardware Security Modules Market. The wide range of verticals present in them includes a wide product range that intellectual property to the manufacturers. The safety of such information in the manufacturing industry can’t solely depend on the software but greatly depends on the hardware to protect it from hackers. This requirement could be a market growth-promoting feature of this segment. BFSI is next anticipated to hold a high market share in the hardware security modules market. Benefits associated with using HSMs are automated digital signing, cloud encryption, network device management, and others. The high demand for the protection of data in this industry boosts the market.

Regional Analysis

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Europe is projected to hold a noticeable share of the hardware security modules market during the forecast period. The presence of a huge, untapped potential market for hardware security modules is the prime reason for the market growth in terms of sale volume. In this region, the government’s contracts for national ID cards and biometric programs are expected to boost the market. The next anticipated region to hold a significant share in the hardware security modules market is North America. The United States and Canada have the prime shareholders in this region owing to the high investments by the vendors in the market.

Market Key Players

Atos SE, Thales, Hewlett Packard Enterprise Development LP, Infineon Technologies, International Business Machines Corporation, Microchip Technology, Spyrus, Utimaco, Yubico., Securosys, and Others.

Market Key Developments:

• In 2022, a new launch of the pay Shield 10K technology was made by Thales. This technology is helpful for delivering the Microsoft Azure Payment Hardware Security Module (HSM). This module is a new service that protects real-time, critical payment transactions in Azure by providing cryptographic key operations to them.

• In 2022, TrustFLEX ECC608 and Trust Anchor TA10 were newly launched by Microchip Technology Inc., and these are Qi1.3 compatible hardware security modules.