Global Quantum Computing Market By Application (Machine Learning, Maximization, Weather Forecasting, and Financial Intermediation), By Deployment Mode(Cloud and On-Premise), By Offering (Services and Systems), By End User(Transporation, Defence, Banking, Community Care, and Cyber Security), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends, and Forecast 2023-2032

Report Overview

The Global Quantum Computing Market size is expected to be worth around USD 8,285.6 Million by 2033, from USD 719.3 Million in 2023, growing at a CAGR of 31.2% during the forecast period from 2024 to 2033.

Quantum computing represents a paradigm shift in computation, utilizing principles of quantum mechanics to process information. Unlike classical computers, which use bits as the smallest unit of data, quantum computers use quantum bits or qubits. This allows them to perform complex calculations at speeds unattainable by traditional computers. Quantum computing has the potential to revolutionize fields such as cryptography, material science, pharmaceuticals, and complex system simulation.

The Quantum Computing Market is experiencing rapid growth, driven by increasing investment from both public and private sectors aimed at harnessing quantum technologies. Major tech companies and startups alike are pushing advancements, while governments are funding initiatives to secure technological leadership. The market’s expansion is fueled by the potential for quantum computing to revolutionize industries like pharmaceuticals, materials science, finance, and cybersecurity by solving complex problems that are currently intractable for traditional computers.

The demand for quantum computing is rising as industries recognize its potential to drive significant breakthroughs in areas that require immense computational capabilities. There is a growing need for enhanced computing power to manage large data sets and perform complex simulations, particularly in drug discovery, financial modeling, and climate forecasting.

Growth factors for the quantum computing market include advancements in quantum error correction, increased availability of quantum computing as a service (QCaaS), and expanding ecosystem partnerships that integrate hardware, software, and expertise. These developments help in mitigating entry barriers and accelerating practical applications, which are critical for widespread adoption and market growth. The future trajectory of the quantum computing market is expected to remain robust as technological capabilities evolve and new use cases emerge.

It is estimated that quantum computing will generate an economic impact ranging from $2 billion to $3 billion by the year 2030. Furthermore, the global quantum computing landscape is projected to expand, with the number of quantum computers anticipated to reach between 2,000 and 5,000 units worldwide by 2030.

According to a report by PwC, the quantum computing field is predominantly driven by startups, which constitute 40% of the players, followed by academic institutions, making up 33%. This highlights a vibrant ecosystem where innovation is largely spearheaded by new and agile players alongside traditional academic research.

Quantum computing is set to revolutionize several key industries. The finance sector is at the forefront, expected to harness quantum computing in 28% of its operations. This is followed by the global energy and materials sector, which accounts for 16%, underscoring the technology’s potential in transforming energy efficiencies and material sciences. The advanced technology sectors also stand to benefit substantially.

D-Wave emerges as a leader in the quantum computing space, being the most funded private company, with investments totaling $216 million across 19 funding rounds, as per data from Crunchbase. This substantial investment underscores the confidence and potential seen in D-Wave’s technological advancements.

One of the remarkable aspects of D-Wave’s technology, particularly the D-Wave 2000Q quantum computer, is its ultra-low operating temperature of 0.015 Kelvin. This feature is crucial for maintaining quantum coherence and significantly enhances the machine’s performance capabilities.

Moreover, the phenomenon of quantum tunneling associated with quantum computing is anticipated to lead to a reduction in power consumption by 100-1000 times, presenting a major leap in computational efficiency and sustainability.

Key Takeaways

• Market Growth: Quantum computing market valued at USD 719.3 million in 2023, expected to reach USD 8,285.6 million by 2032 at a 31.2% CAGR.
• 8,000 quantum computing patents are expected to be filed globally by the end of 2023. This shows a lot of people are working on and investing in quantum computing technology.
• The number of companies making quantum hardware and software is expected to grow to over 40 by 2023, up from about 25 in 2021. This means more businesses are getting involved in quantum computing.
• By 2024, the money spent on quantum computing research and development is expected to be ~$3 billion every year. This indicates that quantum computing is becoming increasingly important.
• The amount of startups focusing on quantum computing is estimated to reach 150 by 2023, which is up from around 100 in 2021. This shows that more new businesses are entering the quantum computing field.
• Over 50 universities and research institutions around the world are expected to have special programs or centers for quantum computing by 2024. This means more schools and research places are studying and teaching about quantum computing.
• It’s projected that over 20 countries will have set up national quantum computing research centers or labs by 2024, increasing from around 10 countries in 2021. This shows that countries around the world are investing in and focusing on quantum computing research.

Application Analysis

In 2022, the Machine Learning segment held a dominant position in the Quantum Computing Market, capturing a significant share. This leadership can be attributed to the increasing adoption of quantum computing technologies in data-intensive applications where conventional algorithms struggle. Machine learning, particularly deep learning and neural networks, requires substantial computational power for tasks such as image and speech recognition, natural language processing, and predictive analytics.

Quantum computing offers the potential to exponentially accelerate these processes by handling complex computations more efficiently than classical computers. The demand for quantum computing in machine learning is driven by its ability to solve high-dimensional optimization problems, which are prevalent in training large machine learning models.

Traditional computers require considerably more time and resources to process these models, making quantum processors particularly advantageous. Furthermore, industries such as healthcare, finance, and automotive are increasingly relying on machine learning for diagnostic, trading, and autonomous driving innovations, respectively, which further stimulates growth in this segment.

Moreover, the integration of quantum algorithms into machine learning is paving the way for new advancements in artificial intelligence. Quantum-enhanced machine learning algorithms have shown potential in improving the accuracy and speed of predictions and classifications, which are critical in real-time decision-making scenarios. This integration not only boosts the performance of AI applications but also opens up new avenues for research and development in quantum artificial intelligence, positioning the Machine Learning segment as a leading force in the Quantum Computing Market.

Deployment Mode Analysis

In 2022, the Cloud segment held a dominant market position in the Quantum Computing Market, capturing a significant share. This dominance is largely due to the scalability and accessibility that cloud-based quantum computing offers. Businesses and researchers can access quantum processors, quantum simulation tools, and advanced algorithms via the cloud without the need for substantial upfront capital investments in quantum hardware and infrastructure.

This model democratizes access to quantum computing, enabling a wide range of industries and smaller entities to experiment with and adopt this transformative technology. The appeal of the Cloud segment is also reinforced by the rapid advancements in cloud technologies and the expansion of quantum-as-a-service (QaaS) platforms.

These platforms provide users with on-demand access to quantum computational resources, which is crucial for tasks that require intensive computation power for short durations. Additionally, cloud deployment facilitates collaboration among researchers and developers located in different geographical areas, speeding up the innovation process in quantum computing applications.

Furthermore, the continuous enhancements in cloud security measures are increasing the confidence of businesses to leverage cloud-based quantum computing for sensitive and critical operations, such as cryptographic tasks and complex simulations in pharmaceuticals and materials science. With tech giants and startups alike investing heavily in developing robust quantum cloud services, the Cloud segment is set to maintain its lead in the market, driving forward the widespread adoption and practical implementation of quantum computing across various sectors.

Offering Analysis

In 2022, the Services segment held a dominant market position in the Quantum Computing Market, capturing a significant share. This leadership is primarily due to the growing demand for quantum computing expertise, consulting, and support services as businesses seek to integrate quantum technologies into their operations.

Many organizations lack the in-house knowledge and resources needed to fully leverage quantum computing, making them reliant on external service providers to guide their quantum initiatives, develop custom algorithms, and ensure optimal performance of quantum systems. The Services segment is also leading due to the expanding quantum-as-a-service (QaaS) offerings that provide businesses with access to quantum computing power through cloud-based platforms.

These services eliminate the need for substantial investments in quantum hardware, making it more feasible for companies of all sizes to experiment with and adopt quantum computing solutions. Additionally, service providers offer comprehensive packages that include training, software development, and continuous support, which are critical for organizations to keep pace with the rapidly evolving quantum landscape.

Furthermore, the increasing complexity of quantum computing projects, such as those in pharmaceuticals, finance, and materials science, necessitates specialized knowledge that service providers are uniquely positioned to offer. These providers can tailor their services to meet the specific needs of various industries, helping clients navigate the technical challenges and maximize the benefits of quantum computing.

End-User Analysis

In 2022, the Banking segment held a dominant market position in the Quantum Computing Market, capturing a significant share. This leadership is driven by the sector’s substantial investments in leveraging quantum computing to enhance complex financial modeling, risk management, and fraud detection.

Banks and financial institutions are increasingly turning to quantum computing to process vast amounts of data and perform calculations at unprecedented speeds, which traditional computing systems cannot match. This capability is critical for optimizing trading strategies, portfolio management, and improving the accuracy of predictive models.

The Banking segment’s prominence is also attributed to the industry’s ongoing need to strengthen cybersecurity measures. Quantum computing offers advanced encryption techniques and cryptographic solutions that can safeguard sensitive financial data from emerging threats. As cyberattacks become more sophisticated, the adoption of quantum-resistant algorithms becomes imperative for financial institutions aiming to protect their assets and maintain customer trust.

Moreover, quantum computing’s potential to streamline and secure transaction processes provides a competitive edge in the highly dynamic and regulated banking environment. Additionally, the collaboration between banks and quantum technology providers is accelerating innovation within the sector.

Strategic partnerships and pilot projects are enabling banks to explore practical applications of quantum computing, from enhancing customer experiences with personalized services to optimizing back-office operations. These initiatives not only demonstrate the tangible benefits of quantum computing in banking but also position the sector as a frontrunner in adopting cutting-edge technologies, reinforcing its dominant market position.

Key Market Segments

Based on Application

• Machine Learning
• Maximization
• Weather Forecasting
• Financial Intermediation

Based on the Deployment mode

• Cloud
• On-Premise

Based on Offering

• Services
• Systems

Based on End-User

• Transportation
• Defense
• Banking
• Community Care
• Cyber Security
• Other End-Users

Driver

Rising adoption of quantum computing technology in various industries and sectors

The growth of the quantum computing market can be attributed to its increasing acceptance across diverse sectors and industries. Quantum computing, known for its potential to process complex data at unprecedented speeds, is transforming how problems are solved in fields such as finance, healthcare, and cybersecurity.

Industries are leveraging quantum computing to optimize operations, enhance data security, and drive innovation, thus fueling market expansion. Financial institutions are utilizing quantum algorithms for faster and more accurate risk assessment and portfolio optimization. In healthcare, quantum computing aids in the analysis of vast datasets, improving diagnostics and personalized medicine.

Furthermore, its application in cybersecurity offers advanced encryption methods, making data transmission more secure. This widespread adoption underscores the significant impact of quantum computing on enhancing efficiency and solving intricate challenges across various domains.

Restraint

Stability and error correction issues

Despite its potential, the quantum computing market faces significant challenges, particularly in terms of stability and error correction. Quantum bits, or qubits, the basic units of quantum information, are highly sensitive to their environment. This sensitivity leads to quantum decoherence, where qubits lose their quantum state, thereby affecting the computer’s performance and reliability. Error rates in quantum computations are currently higher compared to classical computing, posing a significant barrier to practical and commercial applications.

Efforts to improve qubit stability and develop effective quantum error correction techniques are crucial. Overcoming these issues is essential for advancing quantum computing from experimental setups to widespread commercial use. The industry’s ability to address these challenges will play a pivotal role in determining the pace at which quantum computing can be integrated into mainstream technology solutions.

Opportunity

Growing adoption of quantum computing technology in drug discovery

One of the most promising opportunities for the quantum computing market lies in the field of drug discovery. Quantum computing’s ability to analyze and simulate molecular structures at a quantum level can revolutionize the pharmaceutical industry. This technology allows for the modeling of complex molecular interactions at a speed and accuracy unattainable with traditional computing methods.

As a result, it can significantly reduce the time and cost associated with discovering new drugs. The potential for quantum computing to fast-track the development of treatments for diseases, including those without current effective treatments, presents a substantial market opportunity.

Pharmaceutical companies are increasingly investing in quantum computing to enhance drug discovery processes, signaling a shift towards more efficient and innovative research methodologies. This trend underscores the transformative impact of quantum computing on healthcare and offers a glimpse into its potential to address some of the most pressing medical challenges.

Challenge

Physical challenges related to using quantum computers

Quantum computing, despite its potential, faces considerable physical challenges that hinder its widespread adoption. The operation of quantum computers requires extremely low temperatures, close to absolute zero, to maintain the quantum state of qubits. This requirement for cryogenic environments makes quantum computing systems complex and expensive to build and maintain.

Additionally, quantum processors need to be isolated from any form of environmental noise and vibration, which could disrupt their operation. The physical infrastructure required to support these conditions is currently substantial, limiting the accessibility of quantum computing technology.

Overcoming these physical constraints is a significant challenge for the industry. Advancements in quantum computing hardware and the development of more robust and scalable quantum systems are essential for making quantum computing more accessible and practical for broader applications

Geopolitics and Recession Impact Analysis

• Trade Tensions: Geopolitical tensions among major economies like the United States, China, and Russia impede the global quantum computing market. Trade restrictions, export controls, and technology transfer regulations hinder the free flow of quantum technology and expertise across borders. This fragmentation stalls progress in the quantum computing, leaving innovators and industries struggling amid geopolitical uncertainties.
• National Security Concerns: National security concerns in quantum computing, especially encryption and cryptography, lead to strict export regulations. These measures aim to protect sensitive information but can limit global collaboration and market growth for quantum computing companies. Balancing security and technological progress remains a key challenge in this field.
• Investment Funding: During economic recessions, investment funding for emerging technologies like quantum computing typically declines. This is because venture capital and private equity firms become more risk-averse, leading to reduced support for quantum startups and research projects due to the uncertainty associated with economic downturns.
• Corporate Budgets: During economic downturns, corporations tend to be more cautious with their finances, impacting their investment in quantum computing. High initial costs for quantum tech deter spending during recessions as companies prioritize immediate financial stability. This leads to slower adoption until economic conditions improve.

Regional Analysis

North America emerged as the dominant player in the quantum computing market with 31.3% market share. Commanding a substantial share. Its prominence owes much to the swift embrace of cloud computing, bolsters region’s market expansion. Europe, too, plays a vital role in driving quantum computing’s growth, boasting a thriving startup ecosystem and a notable 5% uptick in cloud computing adoption.

The region’s dedication to digital government initiatives, innovation, and widespread integration of cloud-based technologies is poised to steer market growth and foster technological advancements. This information offers a comprehensive snapshot of the present quantum computing landscape, encompassing its challenges, prospects, and regional intricacies.

Key Regions and Countries Covered in this Report:

• North America
  • The US
  • Canada
• Europe
  • Germany
  • France
  • The UK
  • Spain
  • Italy
  • Russia
  • Netherland
  • Rest of Europe
•  APAC
  • China
  • Japan
  • South Korea
  • India
  • Australia
  • New Zealand
  • Singapore
  • Thailand
  • Vietnam
  • Rest of APAC
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • South Africa
  • Saudi Arabia
  • UAE
  • Rest of MEA

Key Players Analysis

Several key players vie for dominance in the dynamic global quantum computing market, each contributing to the field’s evolution. IBM, Google, Rigetti Computing, D-Wave Systems, Honeywell, Intel, Microsoft, IonQ, Alibaba, and Quantum Circuits, Inc. (QCI) lead the pack. They offer diverse quantum solutions, from cloud-based platforms to trapped-ion and superconducting quantum processors. The competitive landscape continually evolves, shaped by technological advancements, strategic partnerships, and market adoption.

Listed below are some of the most prominent quantum computing industry players.

• IBM Corporation
• Google Quantum AI
• Microsoft Corporation
• Amazon Web Services, Inc
• Atos Quantum
• D-Wave Quantum Inc.
• Intel
• Hitachi
• QC Ware
• Zapata Computing
• Toshiba Corporation
• Other Key Players

Recent Developments

• Quantum Computing Inc. launched a series of products in the first half of 2023, including the Dirac Series Entropy quantum computer, Zero-Trust cybersecurity solutions, and quantum sensing products (QLiDAR and Photonic Vibrometer)
• In 2023, IBM Corporation made significant advancements in the field of quantum computing. On December 4, 2023, IBM introduced the “IBM Quantum Heron,” a utility-scale quantum processor designed to deliver high performance with significantly reduced error rates

Report Scope