Global Market Size, Forecast, and Trend Highlights Over 2025-2037
Hardware Security Modules Market size was USD 1.7 billion in 2024 and is estimated to reach USD 5.5 billion by the end of 2037, expanding at a CAGR of 9.8% during the forecast period, i.e., 2025-2037. In 2025, the industry size of hardware security is evaluated at USD 1.8 billion.
The rare earth elements are critical materials of hardware security modules, as they are used in high-grade semiconductors and component manufacturing, such as assembly, integrators, and cryptographic processors. Considering this factor, the extraction of rare earth elements and transition metals is estimated to have a potential influence on the cost of hardware security modules. In 2023, the U.S. Geological Survey (USGS) stated that the extraction of the rare earth elements crossed 299,000 metric tons. The same source also underscores that China leads the extraction with more than 69.5% of refining capacity. Furthermore, the U.S. Bureau of Labor Statistics (BLS) states that in the fourth quarter of 2024, the producer price index (PPI) for electronic components grew by 5.5% YoY.
The consumer price index (CPI) increased by 1.9% for IT hardware in 2024, and represented a stable pricing and positive adoption growth. The steady rise in strategic investments from governments is opening avenues for innovations in the hardware security modules and their components. For instance, in 2024, the National Institute of Standards and Technology (NIST) stated that it invested around USD 12.4 million in the manufacturing of cryptographic hardware solutions. Further, North America and Europe are set to lead the assembly operations during the foreseeable period. The U.S. Department of Commerce (DOC) estimates that the domestic production of cryptographic hardware systems rose by 12.4% in 2024. The positive growth in the import export activities is also backing the sales of hardware security modules (HSM).
Hardware Security Modules Sector: Growth Drivers and Restraints
Growth Drivers
- Rise in adoption in public sector: The rise in digitalization, particularly in the government sector, is set to augment the adoption of hardware security modules in the coming years. In 2024, the government of Estonia modernized its digital identity infrastructure and adopted an HSM network for centralized certificate issuance. The IT security budget of the country expanded by 18.5% YoY in 2023, and nearly 16.3% of it was allocated to hardware security modules and PKI upgrades. Such initiatives by the governments are set to fuel the demand for hardware security modules during the projected timeframe.
- Increasing integration of IoT systems: The increasing vulnerabilities in IoT ecosystems in the modern world are accelerating a high demand for enhanced security systems. The industrial and commercial fields are increasingly adopting next-gen security technologies such as hardware security modules for secure data exchange. The industry 4.0 trends and growing industrial IoT demand are creating a lucrative space for hardware security module producers. Countries such as Germany and South Korea are expected to lead the adoption of advanced security technologies, particularly in their manufacturing and logistics sectors.
- Major Technological Innovations in the Hardware Security Modules Market:The ongoing innovations are set to enhance the efficiency and effectiveness of hardware security modules. The integration of the latest technologies, such as post-quantum cryptography, blockchain integration, and AI-driven key management, is expected to propel the capabilities of hardware security modules and contribute to their sales growth.The companies involved in manufacturing, finance, logistics, and healthcare sectors are increasingly investing in advanced hardware security modules to mitigate the risk of cyber threats, which is fueling the market shares of key players.
|
Trend |
Industry |
Company/Org |
Use Case/Impact |
|
Post-Quantum Cryptography |
Finance |
HSBC |
Installed PQC-ready HSMs across APAC; lessened key latency by 32% |
|
AI in Key Management |
Telecom |
Vodafone |
Enhanced key rotation efficiency by 23.7% using AI analytics HSMs |
|
Blockchain-Integrated HSMs |
Manufacturing |
Bosch |
Secured IoT data flow with HSMs; improved device traceability |
Impact of AI & ML Integration on the Hardware Security Modules Market
Many companies are investing in digital technologies, including AI and ML integrated solutions, to enhance their workflow efficiency. This move is opening lucrative doors for hardware security module manufacturers. Thus, to cut operational costs and enhance automation, the advanced hardware security module installations are expected to exhibit a boom in the coming years.
|
Company |
Integration of AI & ML |
Outcome |
|
Entrust |
AI-based simulations to accelerate secure chip prototyping |
Lessened dev time by 29.5%; 11% decrease in cost |
|
Thales |
ML for predictive logistics and demand forecasting |
20% reduction in logistics costs |
|
Utimaco |
AI-powered predictive maintenance in production |
Uptime rose by 16.9%; downtime decreased by 23.2% |
Cybersecurity Risks in the Hardware Security Modules Market
The digitalization trends are increasing the risk of cyber threats and increasing the adoption of security technologies, including hardware security modules. Industries such as healthcare, fintech, and government are witnessing cyberattacks such as data breaches, phishing, and ransomware. To combat these issues, companies are installing AI-driven threat detection technologies and also rolling out cybersecurity awareness programs. The table below highlights the cyberattacks and their impact on the companies.
|
Company |
Cyber Attack |
Impact |
|
FutureX |
Phishing |
$2.4M financial loss; disrupted global support |
|
nCipher Security |
Ransomware |
3-day firmware pipeline outage |
|
Thales |
Internal phishing |
25.6% higher phishing attempts in Q1 2023 |
Challenges
- Poor cybersecurity infrastructure: The poor cybersecurity infrastructure in many developing regions, such as Asia Pacific and Africa, is limiting the sales of hardware security modules. The limited budget and unavailability of skilled workforce are challenging the revenue growth of the hardware security module manufacturers in these regions. Nigeria, Kenya, and Myanmar are some of the countries that haven’t installed public key infrastructure (PKI) systems due to their high costs and complexity.
- High-cost obstacles for small companies: The high cost of hardware security modules hampers the sales growth in both developed and developing regions. The small-sized companies are facing cost barriers to the adoption of advanced hardware security modules. The average installation costs of hardware security modules are significant. The compliance certification and system integration requirements also add to the costs, which majorly hinder the adoption of hardware security modules.
Hardware Security Modules: Key Insights
| Report Attribute | Details |
|---|---|
|
Base Year |
2024 |
|
Forecast Year |
2025-2037 |
|
CAGR |
9.8% |
|
Base Year Market Size (2024) |
USD 1.7 billion |
|
Forecast Year Market Size (2037) |
USD 5.5 billion |
|
Regional Scope |
|
Hardware Security Modules Segmentation
Deployment mode (On-premise, Cloud-based)
The cloud-based segment is expected to capture 64.5% of the global hardware security modules market share by 2037. The cost-effectiveness in terms of long returns and scalability is a prime factor accelerating the demand for cloud-based hardware security modules. The increasing demand for centralized key management is fueling the sales of cloud-based hardware security modules globally. The European Union Agency for Cybersecurity 2023 report reveals that small and medium-sized enterprises are increasingly shifting to cloud-based infrastructure. These developments are set to augment the installation of cloud-based hardware security modules in the years ahead.
Industry Vertical (Banking, Financial Services & Insurance (BFSI), Government & Defense, Healthcare, IT & Telecom, Manufacturing)
The banking, financial services, & insurance (BFSI) segment is anticipated to account for 38.5% of the global hardware security modules market share throughout the forecast period. The growing cases of cyberattacks and high risk of data breaches are fueling the installation of hardware security modules in BFSI companies. The strict regulations to comply with FIPS 140-3 and PCI-DSS standards are fueling the demand for hardware security module technologies. Furthermore, the study by the National Institute of Standards and Technology highlights that the hardware security modules are effective and efficient for the protection of cryptographic keys, particularly used in online banking and ATM transactions.
Our in-depth analysis of the global hardware security modules market includes the following segments:
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Type |
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Deployment Mode |
|
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Industrial Vertical |
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Customize this ReportHardware Security Modules Industry - Regional Scope
North America Market Forecast
The North America hardware security modules market is foreseen to hold 39.1% of the global revenue share through 2037. The boosting federal investment moves to enhance cybersecurity are expected to propel the sales of hardware security modules in the years ahead. Several digital programs, including Secure & Trusted Communications Networks Reimbursement, are fueling the adoption of hardware security modules among end users. The digital modernization movement is also set to open lucrative opportunities for hardware security module manufacturers during the foreseeable period.
The U.S. hardware security modules market size is projected to register a CAGR of 9.3% from 2025 to 2037. The government outlines, such as Fed RAMP and the National Cybersecurity Strategy, is accelerating the demand for advanced hardware security modules. The increasing adoption of digital technologies in the commercial and industrial sectors is augmenting the adoption of hardware security modules. The fintech, healthcare, and logistics sectors of the country are expected to lead the sales of hardware security modules during the foreseeable period.
The market for hardware security modules in Canada is expected to surpass USD 921.0 million by 2037. The increasing shift towards digital infrastructure, both in the public and private sectors, is set to fuel the sales of cybersecurity technologies such as hardware security modules. The rise in industrial automation is also backing the sales of hardware security modules in the country. In 2023, more than 1.9 million homes increased their broadband-backed secure access under Canadian Radio-television and Telecommunications Commission (CRTC) initiatives. The smart home trends are also propelling a high demand for hardware security modules.
APAC Market Statistics
The Asia Pacific hardware security modules market is set to increase at the fastest CAGR throughout the assessed period. The swift expansion of digital infrastructure in the BFSI, healthcare, and manufacturing industries is fueling the need for advanced cybersecurity solutions such as hardware security modules. The rise in digital infrastructure spending in Japan, China, India and South Korea are also creating a high-earning space for hardware security module manufacturers. According to the Ministry of Economy, Trade and Industry (METI), Japan invested around 3.0% of its technology budget in hardware security modules. Overall, Asia Pacific is a win-win market for hardware security module investors.
The large-scale end use companies in China are expected to propel the sales of hardware security modules. The Made in China initiative is likely to increase the domestic production of hardware security modules in the years ahead. The study by the China Academy of Information and Communications Technology (CAICT) highlights that in 2023, more than 6.0 million enterprises installed hardware security modules. The advancing healthcare sector of the country is also poised to increase the adoption of advanced cybersecurity solutions such as hardware security modules.
The BFSI sector of India is expected to lead the installation of hardware security modules in the coming years. The expanding fintech sector is projected to drive the revenue growth of the hardware security module manufacturers. For instance, the India Brand Equity Foundation (IBEF) estimates that the fintech sector is anticipated to cross USD 421.0 billion by 2029. Supportive government initiatives and positive foreign direct investments are foreseen to increase the importance of hardware security modules in the country during the study period. Furthermore, the ongoing advancements, such as e-KYC and Digital Bharat initiatives, are backing the sales of hardware security modules.
Companies Dominating the Hardware Security Modules Landscape
- Company Overview
- Business Strategy
- Key Product Offerings
- Financial Performance
- Key Performance Indicators
- Risk Analysis
- Recent Development
- Regional Presence
- SWOT Analysis
The leading companies in the hardware security modules sector are employing various organic and inorganic marketing strategies such as new product launches, technological innovations, strategic partnerships & collaborations, global expansion, and mergers & acquisitions to increase their revenue shares and reach. The sales of hardware security modules are mainly led by Europe and America-based producers. The know-how strategy is helping them to uplift their market position in the competitive landscape.
List of key players operating in the global market
|
Company Name |
Country of Origin |
Revenue Share 2024 |
|
Thales Group (Thales DIS CPL) |
France |
32.7% |
|
Entrust Corporation |
USA |
21.5% |
|
UTIMACO GmbH |
Germany |
10.7% |
|
Futurex LP |
USA |
5.5% |
|
Atos SE (BullTrust) |
France |
3.9% |
|
Securosys SA |
Switzerland |
XX% |
|
Crypto Workshop Pty Ltd (acq. by ForgeRock) |
Australia |
XX% |
|
Samsung SDS |
South Korea |
XX% |
|
eSec Forte Technologies |
India |
XX% |
|
SecureMetric Technology Sdn Bhd |
Malaysia |
XX% |
Below are the areas covered for each company in the hardware security modules market:
In the News
- In March 2024, Entrust Corporation introduced the Entrust Cloud HSM 2024. This development resulted in an 18.2% rise in the cloud HSM bookings.
- In February 2024, Thales Group announced the launch of the Luna HSM 8+. This product features post-quantum cryptography capabilities and aided the company to increase the revenue by around 12.4% in the first quarter of 2024.
Author Credits: Radhika Pawar
- Report ID: 5119
- Published Date: May 12, 2025
- Report Format: PDF, PPT
