Global Embedded Systems Market By Hardware (Microcontrollers, ASIC, PMIC, Microprocessors, and Others), By Software (Operating Systems, and Middleware), By Application, By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The Global Embedded Systems Market was valued at USD 91.3 billion in 2022. This market is estimated to register the highest CAGR of 6.8% in the forecast period of 2023-2032. It is expected to reach USD 173.4 billion.

An embedded system is a combination of hardware and software designed to perform a particular function. Embedded systems can function within larger systems. Systems can have programmable or fixed functions. Industrial machinery, consumer electronics, agricultural and process industrial equipment, automobiles, and mobile devices are potential candidates for embedded systems.

Demand for smart meters is expected to continue increasing during the forecast period due to global energy efficiency efforts, which will add momentum to the embedded systems market. Technological advances and falling prices of microcontroller units are expected to have a positive impact on the market during the forecast period as well. Embedded systems are used in many end-user industries with rising demand from healthcare and consumer electronics areas. This is expected to help the Embedded Systems Market grow.

Driving Factors

Increasing Application of Advanced Technology in Embedded Systems

The growing demand for multi-core embedded systems is promoting the application of virtualization technology in global embedded systems market. Embedded hypervisors allow embedded systems to extend their systems directly into virtual machines, provide direct access to system resources, provide strong protection against cyberattacks, and provide support for a wide variety of processors.

Automation applications are transforming industries from manufacturing to automotive. Embedded systems are widely used in automation as they allow devices to be smaller, more agile, and faster. Embedded network systems can be very complex with complex user interfaces. However, some are relatively simple and they serve only one purpose to be critical to the operation of the system.

Embedded processors are experiencing remarkable growth with their widespread use in devices. Device makers are integrating more processors and microcontrollers into their products to add more features and compete in a competitive market. Intense competition in the consumer electronics market, constant improvements in consumer electronics, and increasing automation in the automotive industry due to electronics are expected to drive future market growth.

Restraining Factors

Vulnerability Of Embedded Systems to Security Breaches and Cyber Threats

One of the key factors slowing industry growth is the security of embedded devices. Military forces, banks, data centers, and healthcare facilities all rely on embedded devices, including memory, to retain potentially critical information. As a result, cybersecurity risks and breaches must be avoided at all costs.

COVID-19 Impact Analysis

The COVID-19 outbreak has caused many market changes around the world. Most changes in market dynamics are not good. Low production rates, low demand, and supply chain disruptions are some of the reasons restraining the growth of the embedded systems market. Major players in the embedded systems market provide various tiers of embedded services.

Asia Pacific, Europe, and North America are home to these major market players. COVID cases were wreaking havoc in three regions. The embedded systems market faces many obstacles today which affect the operation of embedded systems; However, the embedded systems markets demand from the healthcare industry remains strong. The outlook for the market after COVID-19 is optimistic.

The COVID-19 pandemic has temporarily halted the production and marketing of home appliances. The automotive industry has also been severely impacted by the pandemic due to severe shortages of semiconductor chips and embedded systems. This caused delays in vehicle deliveries and impacted sales share in the automotive division.

However, strong demand for healthcare medical devices has sustained the embedded systems industry during the pandemic. Improving economic conditions and the resumption of manufacturing activity around the world should complement the embedded systems industry over the forecast period.

Component Analysis

Hardware Segment Drives the Market

In the hardware segment, the microcontroller captured the highest market share. Growth in this segment is driven by the continued use of microcontrollers in implantable medical devices, automotive engines, and others. With increasing automation in every industry the requirement for microcontrollers is increasing with it. A number of verticals adapting the LoT helped the growth of secured applications and less energy-consuming devices.

The software segment in embedded systems is used to control specific, limited functions of hardware devices and usually does not require input. Its functionality is operated by another control, either by external action on the device itself or by remote input. The device can have communication links to other devices for advantage or in a case needs to customize the device. The software segment is expected to grow at an exponential growth rate with the increasing demand for software applications for the growing hardware segment.

Application Analysis

The communication Segment is Expected to Grow at the Highest CAGR During the Forecast Period

The communications segment is a big part of the embedded microprocessor. This segment includes microprocessors used in communication and signaling systems such as mobile phones, routers, modems, and other network devices. Communication and signaling occupy a high market share due to the increasing adoption of 5G technology. 5G technology requires more powerful and energy-efficient microprocessors to support high-speed data transmission and low latency which is driving the market to grow at a high growth rate.

The consumer electronics segment is anticipated to grow strongly as the increasing adoption of smart devices and the Internet drives the growth. Additionally, the growing trend of smartwatches, smart home devices, voice assistants, and the increasing popularity of smart speakers are contributing to the growth of this segment.

In automotive systems, more and more devices are changing from mechanical to electronic. Embedded systems are the heart of vehicle electronic systems due to their versatility and flexibility. The electronics revolution has manipulated automobile design, including fuel combustion, powertrain crash protection, and more. The advanced use of embedded systems in automotive will increase the ability to control pollution and provide system monitoring capabilities and helps the growth of the automotive segment.

The embedded system is used in almost every type of medical device and various biomedical sensors. In biomedical applications, embedded systems allow physicians to distantly monitor patients’ health and make diagnostic and treatment decisions through telemedicine and other remote systems. As the healthcare sector grows, the use of embedded healthcare systems is expected to grow exponentially.

Key Market Segments

By Component

• Hardware
  • Microcontrollers
  • ASIC
  • PMIC
  • Microprocessors
  • Others

• Software
  • Operating Systems
  • Middleware

By Application

• Automotive
• Healthcare
• industrial
• Consumer Electronics
• Communication
• Aerospace and defense

Growth Opportunity

Increasing Automation in Industries Boosts the Growth of this Market

Manufacturing sectors are moving to automated solutions to reduce energy consumption, wasted resources, and labor. Embedded solutions act as programmable operating systems in manufacturing activities, performing a variety of tasks such as temperature control, motor operation, network hardware, and assembly line speed control. They are used to monitor and facilitate the functions of machines, equipment, and factories. This factor will create new opportunities for this market.

Moreover, during the forecast period, ongoing research and development aimed at introducing more intelligent and energy-efficient electronic devices are expected to have a positive impact on the growth of the global embedded systems market.

The embedded systems industry could benefit from the introduction of 5G technology. With 5G integrated into the system, embedded devices used in intelligent in-vehicle video surveillance systems offer fast response times. Increased strategic cooperation and emerging new markets act as market drivers with increasing lucrative opportunities for market growth rates.

Latest Trends

Rising Trend of Advanced Technology in Embedded Systems.

Operating embedded systems is essential in many areas, such as vehicle safety, security systems, and manufacturing. As the Internet of Things pervades more and more aspects of today’s life, many technologies previously untouched by advanced technology are becoming embedded systems.

A wide range of hardware platforms, open-source machine learning, and artificial intelligence (AI) libraries enable the rapid implementation of an increasing number of computer vision systems in IoT as embedded systems. Computer vision AI applications in embedded systems are highly competitive and valuable.

Regional Analysis

North America Shares Major Market with Asia Pacific closing in Forecast Period

North America dominates the embedded systems market with a market share of 34% and will continue to lead during the forecast period. This is due to increased demand for connected and smart devices and various manufacturers in the region. Moreover, increasing the adoption of Internet of Things (IoT) technologies will boost the growth rate of the market in this region.

The Asia-Pacific market is going to witness significant growth during the forecast period. Increasing per capita income and ongoing massive industrialization and urbanization are the factors driving the market growth in the Asia Pacific (APAC) region. Additionally, the availability of low-cost electronics in APAC is expected to contribute to the increasing need for microprocessors and microcontrollers in the region.

The Europe region is expected to follow the Asia-Pacific and North America regions during the forecast period. Europe could soon capture a large market share in embedded systems. The steady growth in this region is due to the rapidly developing automotive sector in the region increasingly using embedded systems. The market in the region is booming due to the increasing number of advanced robots and microprocessors in various industries.

Key Regions and Countries:

• North America
  • The US
  • Canada
  • Mexico
• Western Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Portugal
  • Ireland
  • Austria
  • Switzerland
  • Benelux
  • Nordic
  • Rest of Western Europe
• Eastern Europe
  • Russia
  • Poland
  • The Czech Republic
  • Greece
  • Rest of Eastern Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia & New Zealand
  • Indonesia
  • Malaysia
  • Philippines
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Colombia
  • Chile
  • Argentina
  • Costa Rica
  • Rest of Latin America
• Middle East & Africa
  • Algeria
  • Egypt
  • Israel
  • Kuwait
  • Nigeria
  • Saudi Arabia
  • South Africa
  • Turkey
  • United Arab Emirates
  • Rest of MEA

Market Share & Key Players Analysis

Intel Corporation and Texas Instruments Corporation Lead the Market by Merging and Acquisition in Recent Times.

The global embedded systems market is classified due to the diversity of manufacturers, designers, integrators, service providers, and software developers. Some market players rely on innovation in embedded systems. Key players in the embedded systems market include Advanced Micro Devices, Inc., Microchip Technology Inc., Renesas Electronics Corporation, and Texas Instruments Incorporated.

Top Key Players in Market:

• Intel Corporation
• Texas Instruments Corporation
• Infineon Technologies AG 
• NXP Semiconductors
• Microsoft
• SAMSUNG
• Renesas Electronics Corporation
• Analog Devices Inc.
• Kontron AG
• Advantech Co., Ltd.
• Microchip Technology Inc.
• Xilinx, Inc.
• Broadcom
• Qualcomm Technologies, Inc.
• Marvell
• Other Key Players

Recent Developments

• In September 2022, Marvell announced LiquidSecurity 2 (LS2) hardware cryptographic module (HSM) adapters for general use and payment transaction. It is based on the company’s technology and is used in prime hyper-scale clouds. The HSM adapter not only offers powerful and powerful cryptographic acceleration and sorting, but also a hardware-protected collection of up to millions of AES, RSA, and ECC encryption keys for these applications.
• In May 2022, Broadcom acquired VMware for about $61 billion. As a branch of Broadcom, VMware is expected to provide enterprise customers with more choice and variability to meet their most complicated IT infrastructure challenges. This accelerates Broadcom’s software scaling and growth opportunities, with estimated revenues expected to exceed $40 billion, including 49% of software revenues.

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Report Scope

For the Embedded Systems Market research study, the following years have been considered to estimate the market size: