EMBEDDED COMPUTING MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Embedded Computing Market Size and Trends

The global embedded computing market is estimated to be valued at US$ 112.45 Bn in 2024 and is expected to reach US$ 174.38 Bn by 2031, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2024 to 2031.

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The growing adoption of Internet of Things (IoT) devices across various industries is driving the need for embedded computing systems. Increased investments by automotive OEMs to enhance driver assistance, vehicle connectivity, and powertrain electrification are also fueling the demand for embedded computing.

The global embedded computing market is expected to be driven by the increasing focus on enhancing performance and functionality of embedded systems. Lightweight, low-power, and high-performance embedded technologies are gaining popularity among end users. Further, the integration of artificial intelligence into various embedded devices is widening the scope of applications for embedded computing systems. Advanced technologies, such as functional safety, 5G connectivity, and edge computing, provide opportunities for market participants over the forecast period.

Connected devices driving growth

The proliferation of connected devices is a major driver propelling the global embedded computing market forward. As technologies like IoT, industrial automation, and telematics continue to expand their footprint, the need for intelligent edge devices with embedded computing capabilities is growing rapidly. An ever-increasing array of ordinary items such as home appliances, vehicles, industrial machines, and medical equipment are being outfitted with various sensors and communication modules that require an onboard computing system to facilitate connectivity and data collection.

Embedded systems allow these devices to gain intelligence by enabling functions like real-time monitoring, remote access and control, data collection and analytics. This is opening up new possibilities for device optimization, predictive maintenance, process automation, and others. Manufacturers across many industries now rely on embedded computing to digitalize their offerings and provide differentiated value-added services. Consumer electronics is another major sector benefiting from this trend, with smart TVs, wearable and other connected consumer products driving significant embedded design wins. Even traditionally non-technical industries are embracing embedded computing and IoT to modernize operations and business models.

The proliferation of 5G networks and ongoing advancements in wireless technologies are serving to supercharge this growth trajectory. Higher bandwidth, lower latency and broader coverage offered by 5G make it possible to connect many more types of devices than before. This will generate even stronger demand for embedded systems customized for specific endpoints, devices and gateways that can take advantage of the improved connectivity. As 5G networks mature globally in the coming years, it is estimated that tens of billions of connected devices will come online, further expanding the market potential.

Market Concentration and Competitive Landscape

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Developments in AI and edge computing

Embedded computing is essential for harnessing the potential of emerging technologies like artificial intelligence and edge computing. Advanced data processing that used to occur exclusively in the cloud is now shifting to distributed edge devices due to the capabilities of modern embedded systems. This distributed computing model is opening up exciting new use cases while also addressing challenges around bandwidth constraints and latency issues associated with cloud-based approaches.

Embedded AI aims to bring local, real-time data analytics, and decision making where it is needed most - right at the source of data generation. This brings advantages like reduced response times, elimination of reliance on cloud connectivity, and enhanced privacy and security by minimizing data transfers. Such systems rely heavily on specialized embedded platforms optimized for running AI/ML workloads locally. Powerful yet efficient embedded processors, FPGAs and ASICs are being increasingly used alongside dedicated AI accelerators and neural networking software.

Similarly, edge computing architectures depend on embedded infrastructure being located close to the IoT endpoints. Embedded systems serve as the edge computing gateways that collect and pre-process IoT data before sending relevant analytics and insights to the cloud. This results in lower cloud workloads and network usage. Both AI and edge computing are motivating OEMs to design highly customized embedded solutions tailored for their specific application requirements. The combination of these factors has placed embedded computing at the forefront of next wave technologies like Industry 4.0, self-driving vehicles and predictive maintenance. Going forward, its crucial role in enabling AI everywhere will continue bolstering demand.

Key Takeaways from Analyst:

The global embedded computing market remains an attractive segment due to the growing adoption of IoT across industries. The demand for connected devices equipped with embedded processors and systems is driving significant growth. The automotive industry continues to be one of the largest adopters of embedded solutions for applications like ADAS, telematics, and connected mobility. Advancements in autonomous driving technology will further boost opportunities in the coming years. Another major growth area is the industrial automation sector where embedded boards and systems are leveraging real-time analytics to optimize automation.

The Asia Pacific region expected fastest growth in the embedded computing market to maintain its lead over the forecast period. This can be attributed to the expanding manufacturing industries in China, India, and other Southeast Asian countries. Many companies are also locating or expanding embedded design facilities in low-cost locations of Asia Pacific to maximize profitability. Europe is another frontrunner in embedded with Germany, the U.K., and Nordic nations actively developing embedded IoT solutions. However, security and privacy concerns around connected devices could limit upside potential for the market. Additionally, the ongoing global chip shortage poses a challenge for embedded product manufacturing. Overall, the embedded computing market remains poised for healthy expansion as digital transformation efforts accelerate across verticals.

Market Challenges: High initial investment and complex design requirements

One of the key challenges faced in the global embedded computing market is the high initial investment and complex design requirements associated with embedded systems. Developing embedded systems that are capable of specialized functions requires sophisticated hardware and software designs. This involves substantial upfront engineering costs for designing application-specific integrated circuits, circuit boards, and developing customized operating systems and drivers. Additionally, testing and validation of embedded designs under different operating conditions adds to the design expenses. Further, ongoing costs are also incurred to keep the systems updated with the latest technological advancements and security fixes. These high costs of design, development and maintenance have prevented many small and medium enterprises from adopting embedded systems. For widespread adoption of embedded computing technologies, lowering the barriers of entry through more standardized and modular designs is critical.

Market Opportunities: Growing demand for edge computing and fog computing

The global embedded computing market is witnessing new opportunities arising from the growing demand for edge computing and fog computing solutions. With the rise of IoT, there is an ever increasing need to process and analyze large amounts of data closer to the data source rather than sending all the raw data to centralized cloud platforms. Edge and fog computing fulfill this need by leveraging embedded devices with local computation and storage capabilities. This reduces latency issues and ensures business continuity even in scenarios of intermittent network connectivity. Many industries have started deploying edge gateways, industrial PCs, and other embedded devices to support localized analytics and control functions. The advantages of improved response times, data privacy and autonomy from the cloud are expected to drive further investments in edge and fog computing based on embedded systems. Device manufacturers have been quick to capitalize on this opportunity by launching edge appliances tailored for applications in manufacturing, transportation, healthcare, and smart cities.

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Insights By Component - Driving Innovation through Hardware Design

In terms of component, the hardware segment is expected to contribute the 52.5% share of the global embedded computing market in 2024 owing to its critical role in product development. Hardware components like processors, microcontrollers, circuits, and modules serve as the foundation for running complex embedded software. Innovation in hardware design enables the creation of more powerful and functionally versatile embedded systems. Leading hardware manufacturers continually explore new form factors, chip architectures, and modular concepts to address emerging requirements from diverse end applications. Low-power and high-performance hardware options allow embedded devices to take on more data-intensive tasks while staying within size and thermal constraints. Standardized hardware platforms also support fast design cycles through proven reference designs, development tools and operating systems. The growing sophistication of embedded applications will sustain demand for advanced hardware customization and integration services from embedded computing component providers.

Insights By processor type - Pushing Boundaries with 32-bit Processing

In terms of processor type, the 32-bit segment is expected to contribute 46.1% share of the market in 2024 due to its versatility across a wide performance range. 32-bit embedded processors deliver a balance of processing power and power efficiency that satisfies the needs of most embedded devices. Compared to 8-bit and 16-bit processors, 32-bit processors can handle more complex calculations and support richer multimedia functions. They offer sufficient headroom to run advanced real-time operating systems, database applications and computer vision-based algorithms. Leading 32-bit processor families like ARM Cortex and Renesas RX supply various options targeting diverse power, cost and time-to-market requirements. Vendors continuously upgrade 32-bit core architectures to deliver more MIPS/Watt and seamlessly adopt new manufacturing technologies like FinFET for further scaling. This allows 32-bit processors to expand their application domains from basic control functions to data-intensive workloads.

Insights By Application - Enabling Industrial Automation through Embedded Software

In terms of application, the industrial automation segment is expected to contribute 49.7% share in 2024 for the embedded computing market share due to the growing demand for intelligent machinery. Sophisticated embedded software is critical for implementing advanced automation functions like predictive maintenance, remote monitoring/control, artificial intelligence, and digital twin simulations. Legacy control systems rely on proprietary software configured for individual equipment, lacking flexibility for data connectivity. Modern industrial automation software tools offer standardized programming environments, libraries, middleware, and analytics/visualization platforms to streamline development and facilitate interoperability. They help machinery suppliers create line controllers, human-machine interfaces, condition monitoring systems and fleet management solutions with embedded computers. Industries adopt these capabilities to optimize asset performance, minimize downtime, and gain real-time visibility across manufacturing plants and logistics networks. As Industrial Internet of Things expands connectivity of equipment, embedded systems powered by commercial off-the-shelf software components will play a bigger role in industrial automation.

Regional Insights

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North America dominates the global embedded computing market. The region is expected to account for 36.7% share of the market share in 2024 owing to the strong presence of technology firms and widespread use of embedded systems across industries. The U.S. alone accounts for over 40% of the regional market size led by manufacturers of industrial equipment, automotive, medical devices, and communications infrastructure. Many of the leading chip suppliers and semiconductor companies are headquartered in the U.S. which has created a robust ecosystem for the research and development of sophisticated embedded solutions. Furthermore, heavy investments in innovation by both public and private sectors have enabled the early adoption of the latest technologies. With the increasing complexity of applications, North American customers also tend to pay premium for customized and technologically advanced embedded boards, modules, and systems.

Asia Pacific has emerged as the fastest growing regional market for embedded computing globally over the past decade. Rapid industrialization and modernization of infrastructure in countries like China and India have driven massive demand. Additionally, availability of low-cost skilled labor force and supporting infrastructure has attracted major electronics manufacturing facilities to the region. This has given a significant boost to local capabilities. For example, Taiwan has become a major hub for design and fabrication of embedded boards. Many Chinese companies too have ventured into development and exports of entry level embedded systems. Their competitive pricing and divergent customization options have found strong demand not just within Asia Pacific but also globally. While communication protocols and technologies may differ across countries, the widespread use of embedded systems across industries offers huge untapped opportunities for regional as well as international players.

Market Report Scope

Key Developments

• In March 2023, Qualcomm Technologies, Inc., a global leader in wireless technologies and semiconductor solutions, introduced the world's first integrated 5G IoT processors that can support four different operating systems. The Qualcomm QCM6490 and QCS6490 processors are designed to run on Ubuntu, Linux, Microsoft Windows IoT Enterprise, and the Android operating system. This breakthrough allows device manufacturers to create a wide range of IoT products with diverse software requirements, accelerating innovation and expanding the connected intelligent edge ecosystem.
• In November 2022, Cybellum, a leading provider of automotive cybersecurity solutions, announced a collaboration with Jingwei HiRain Technologies, a major China-based automotive electronics and software supplier, to address the growing cybersecurity challenges faced by the automotive supply chain. This strategic partnership allows customers to enhance their cybersecurity posture without disrupting operations by automatically identifying and managing risks associated with embedded software components used in vehicles.
• In September 2022, Intel Corporation, a global leader in semiconductor technology, launched the 12th generation Intel Core processor family. This new lineup includes the all-new 12th Generation Intel Core H-series mobile CPUs, led by the Intel Core i9-12900HK, which Intel claims is the fastest mobile processor ever developed. The 12th generation Intel Core family is expected to feature 60 processors and over 500 designs from various OEMs, showcasing Intel's commitment to delivering high-performance computing solutions for a wide range of applications, from gaming laptops to mobile workstations.
• In February 2022, Northrop Grumman, a leading aerospace and defense technology company, announced a partnership with Curtiss-Wright Corporation, a global supplier of advanced technology for military and aerospace applications. This collaboration aims to enhance military-embedded systems featured on various in-service U.S. military aircraft. The partnership is anchored by single-board computers provided by Curtiss-Wright and Northrop Grumman's Real-Time Virtualization & Modernized Protection (ReVAMP) virtualization software, enabling customers to improve their systems' capabilities while maintaining operational efficiency.

*Definition: The global embedded computing market consists of companies that design and manufacture computer hardware and software that are embedded as components within larger systems or devices. Embedded computers control and monitor functions through specialized operating systems and software applications. They are customized for specific operations and are often tiny in size. This market includes point-of-sale systems, industrial automation controls, medical equipment, aerospace and defense technologies, telecommunications infrastructure, and other applications that use embedded computers to run specialized functions.

Market Segmentation

•  Component Insights (Revenue, US$ Bn, 2019 - 2031)
  • Hardware
  • Software
  • Services
•  Processor Type Insights (Revenue, US$ Bn, 2019 - 2031)
  • 8-Bit
  • 16-Bit
  • 32-Bit
  • 64-Bit
•  Application Insights (Revenue, US$ Bn, 2019 - 2031)
  • Industrial Automation
  • Automotive
  • Healthcare
  • Aerospace & Defense
  • Consumer Electronics
  • Others
• Regional Insights (Revenue, US$ Bn, 2019 - 2031)
  • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East & Africa
    • GCC Countries
    • Israel
    • South Africa
    • Rest of Middle East & Africa
• Key Players Insights
  • Advanced Micro Devices (AMD), Inc.
  • Advantech Co., Ltd.
  • Avalue Technology Inc.
  • Curtiss-Wright Corporation
  • Dell Technologies Inc.
  • Emerson Electric Co.
  • Fujitsu Limited
  • General Electric Company
  • Hewlett Packard Enterprise Company
  • Honeywell International Inc.
  • Intel Corporation
  • Kontron S&T AG
  • Mitsubishi Electric Corporation
  • Rockwell Automation, Inc.
  • Texas Instruments Incorporated