Embedded Systems Market Size - By Component (Hardware, Software), By Application (Automotive, Consumer Electronics, Manufacturing, Retail, Media & Entertainment, Military & Defense, Telecom), By Function & Forecast, 2024 - 2032

Embedded Systems Market Size

Embedded Systems Market size was valued at USD 110.3 billion in 2023 and is projected to grow at a CAGR of over 5% between 2024 and 2032. Embedded systems are experiencing substantial adoption in the automotive sector, owing to the growing incorporation of cutting-edge technologies in contemporary automobiles. These systems are widely used in a variety of automotive applications as they improve vehicle performance, safety, comfort, and user experience.
 

Advanced Driver Assistance Systems (ADAS) are one of the main areas where embedded systems are gaining traction. These systems enable features such as autonomous emergency braking, adaptive cruise control, lane-keeping assistance, and parking assistance. Embedded systems provide real-time decision-making and control by analyzing data from several sensors, cameras, and radars. This greatly enhances vehicle safety and lowers the likelihood of accidents.
 

Embedded systems are essential for entertainment and connection solutions, which improve the in-car experience in addition to safety & autonomous driving. Contemporary automobiles are furnished with sophisticated infotainment systems that offer communication, entertainment, and navigation functionalities. These systems' seamless smartphone integration, voice recognition, real-time traffic updates, and multimedia capabilities are all made possible by embedded technologies. Thus, the adoption of embedded systems that provide a rich, interactive user experience is being propelled by the increasing demand from consumers for linked & smart vehicles.
 

In addition, the automotive industry is transitioning toward hybrid and electric cars, which also largely depend on embedded systems. To ensure safety and efficiency, these cars need advanced Battery Management Systems (BMS) to monitor and improve battery performance.
 

For instance, in November 2022, Cybellum and Jingwei HiRain collaborated to tackle the challenges of cybersecurity across the automotive supply chain. This partnership enabled customers to strengthen their cybersecurity without affecting their operations by automatically managing risks in embedded software components.
 

One major obstacle that embedded systems developers and manufacturers face is the complexity of design and development. To achieve precise performance, reliability, and security criteria, components of an embedded system must smoothly integrate with one another through complex hardware and software design. This is a resource-intensive and time-consuming procedure that calls for specialists with expertise in various areas including electronics, firmware, software engineering, and systems integration.
 

Ensuring system resilience and robustness is another major obstacle. Embedded systems are frequently used in vital applications where malfunctions can have serious repercussions such as industrial automation, medical equipment, and vehicle safety systems. To make sure these systems function dependably for the duration of their intended lifespan, developers must thoroughly test & validate them under a variety of scenarios.
 

Embedded Systems Market Trends

The expansion of IoT is one of the most significant trends impacting the embedded systems industry. As more devices become connected and smart, the need for embedded systems to provide intelligence and networking capabilities is growing. This trend spans the consumer, industrial, automotive, and healthcare sectors, requiring embedded systems to handle complex tasks such as data processing, connectivity, and real-time operations. With the proliferation of IoT devices and the need for real-time data processing, edge computing has emerged as a key trend in embedded systems.
 

Edge computing involves processing data closer to the source (i.e., at the edge of the network) rather than relying solely on centralized cloud servers. Embedded systems play a crucial role in edge computing by providing computing power and intelligence at the device level, enabling faster response times, reduced latency, and improved reliability.
 

Embedded systems are increasingly being incorporated with Artificial Intelligence (AI) and Machine Learning (ML) to enhance decision-making and provide more adaptive functionalities. AI/ML capabilities enable embedded devices to perform tasks, such as predictive maintenance, pattern recognition, and autonomous control, without human intervention. This trend is particularly evident in sectors such as automotive (for autonomous driving systems), healthcare (for diagnostic and monitoring devices), and manufacturing (for automation and control systems).
 

As embedded systems become more connected, security concerns are rising. There is a growing trend toward implementing more robust security measures at the hardware level of embedded devices. This includes secure boot, hardware-based encryption, and intrusion detection mechanisms to protect against potential cyber threats and ensure the integrity of device operations & data.
 

Embedded Systems Market Analysis

Based on components, the market is divided into hardware & software. The software segment is expected to register a CAGR of over 10% during the forecast period.
 

• The software industry is vital to the embedded system market as it supplies the intelligence and functionality that allow these systems to function as intended. Operating systems, firmware, middleware, and application software all fall under the category of embedded software. These programs are all specifically designed to fulfill the needs of the hardware and the system as a whole. This market is defined by its emphasis on efficiency, dependability, and performance in real time—often while dealing with limitations in memory, computing power, and energy usage.
   
• Compared to developing software for general-purpose applications, developing software for embedded devices poses distinct problems. To ensure that it operates well on limited hardware, embedded software needs to be highly optimized, which frequently calls for low-level programming abilities and a thorough understanding of the hardware design. Writing code in languages, such as C or assembly, for example, enables more precise control over hardware resources but necessitates attention to detail and rigorous testing to minimize errors and ensure system stability.
   

Based on function, the embedded systems market is divided into standalone system, real-time system, network system, and mobile system. The real-time system segment dominated the global market with a revenue of over USD 80 billion in 2032.
 

• Real-time systems are used in applications where deterministic and rapid answers are crucial. In numerous sectors including automotive, aerospace, healthcare, industrial automation, and telecommunications, real-time systems are essential due to their ability to process data and produce outputs within stringent time limits. For applications, such as airbag deployment in cars, flight control systems in airplanes, and patient monitoring in medical devices that depend on exact timing and dependability, these systems guarantee that activities are finished within a certain time limit.
   
• Due to the strict timing criteria that must be met, developing real-time systems requires a great deal of complex hardware and software components. To guarantee that crucial processes are completed by the deadline, real-time system software—which is frequently controlled by Real-time Operating Systems (RTOS)—needs to be highly efficient and able to prioritize tasks. Complex scheduling algorithms, resource management, and interrupt handling techniques are required to properly manage the system's activities.
   

Asia Pacific embedded systems market accounted for 30% share in 2023. A major player in the market, the Asia Pacific region is distinguished by rapid technological breakthroughs, substantial industrial growth, and a strong manufacturing ecosystem. The need for embedded systems is being driven by several sectors including consumer electronics, automotive, telecommunications, and industrial automation in leading countries, such as China, Japan, South Korea, and Taiwan. The region's lead in the worldwide embedded systems market is based on its considerable R&D spending, skilled workforce, and dominance in electronics manufacturing.
 

The adoption of embedded systems is further accelerated by the Asia Pacific region's growing need for IoT and smart city initiatives. The public and private sectors are investing in smart infrastructure, which uses embedded technologies for real-time data processing, communication, and automation. Moreover, the expanding automotive sector, particularly the move toward electric & driverless vehicles, where embedded systems are essential to efficiency, safety, and navigation, is fueling market growth.
 

In February 2024, Kontron, one of the leading competitors in the market, announced the launch of the SMARC-sGET 2 Module, a powerful and secure module for industrial IoT applications.
 

The embedded systems market is greatly influenced by the U.S., which is known for its substantial R&D investment, advanced technological infrastructure, and strong emphasis on innovation. American businesses are at the forefront of several high-tech sectors including consumer electronics, automotive, aerospace, defense, and healthcare, where embedded systems are essential to improving functionality and performance.
 

Continuous breakthroughs in embedded systems are fueled by the country’s thriving ecosystem of technology businesses, research institutes, and start-ups. This is especially true in fields such as AI, the Internet of Things (IoT), and autonomous systems. The adoption of Industry 4.0 technologies, where embedded systems are essential to smart manufacturing and industrial automation, is another factor propelling the U.S. market.
 

Japan's excellent manufacturing skills, precision engineering, and emphasis on quality and reliability set it apart in the embedded systems market. The country leads the world in automotive technology, having made great strides in electric cars, ADAS — which mostly relies on complex embedded systems and autonomous driving. Furthermore, embedded systems are essential to the performance and innovation of consumer electronics, robotics, and industrial automation — areas in which Japan leads the world.
 

The nation’s industry, academia, and government are creating a collaborative atmosphere that promotes technological innovation and ongoing improvement. But in order to be at the forefront of technology, Japan must address issues, such as an aging labor base, which calls for expenditures in education and training, and the requirement to strengthen cybersecurity measures in increasingly interconnected systems.
 

South Korea is also a major player in the market owing to its dominance in the electronics and semiconductor sectors. Some top technology businesses in the world are based in this country, especially in the consumer electronics and telecommunications sectors, where embedded systems are crucial for creating smart devices, household appliances, and network infrastructure of the future.
 

The automotive sector in South Korea is expanding quickly as well, owing to large investments in electric and driverless cars that run on cutting-edge integrated technology. The embedded systems market is further supported by the nation's emphasis on innovation and its robust governmental backing for technical advancement and smart city projects. However, South Korea must deal with issues such as keeping up with global supply chain disruptions, ensuring cybersecurity in increasingly interconnected systems, and consistently upskilling its labor force.
 

China, the largest manufacturing hub in the world, has a significant impact on the industry owing to its increasing emphasis on innovation and extensive production capacity. In order to improve functionality and satisfy the growing customer demand for smart devices, Chinese manufacturers are progressively incorporating cutting-edge embedded technologies into their goods.
 

Due to their superior technological capabilities, South Korea and Japan make major contributions, especially in the electronics and automobile industries. Owing to their emphasis on precision engineering and quality, these countries are spearheading the development of complex embedded systems for applications such as robots, autonomous vehicles, and smart appliances.
 

Embedded Systems Market Share

Intel Corporation & NXP Semiconductor N.V. hold a market share of over 15% in the embedded systems industry. The companies are dominating the market owing to their deep industry experience and a wide range of product offerings. Intel uses innovation and cutting-edge technology to provide a variety of System-on-Chips (SoCs), microprocessors, and development tools to meet the needs of a wide range of embedded applications.
 

Owing to their excellent performance, scalability, and dependability, Intel products are essential to many sectors including consumer electronics, healthcare, industrial automation, and automotive. Through strategic alliances, acquisitions, and R&D, Intel is able to meet the changing demands of the embedded systems market and remain at the forefront of technological breakthroughs.
 

Similarly, NXP Semiconductors N.V. is well known for its wide array of microcontrollers, connectivity options, and security technologies and is a major force in the embedded systems industry. It is an essential supplier to the automotive sector owing to the broad usage of its products in applications related to ADAS, in-vehicle networking, and secure connection.
 

Furthermore, NXP's emphasis on embedded security solutions, such as safe payment and identity protocols, fortifies its market position. NXP holds a significant market position owing to its ability to provide embedded solutions that are high-quality, dependable, and secure as well as its strategic focus on important growth areas including industrial automation, smart cities, and IoT.
 

Embedded Systems Market Companies

Major players operating in the embedded systems industry are:

• Intel Corporation
• NXP Semiconductor N.V.
• Texas Instruments, Inc.
• STMicroelectronics
• Broadcom Limited
• Renesas Electronics Corporation
• Microchip Technology Inc.
   

Embedded Systems Industry News

• In September 2022, Intel launched the 12^th generation Intel Core processer family, which includes the all-new 12^th Generation Intel Core H-series mobile CPUs, led by the Intel Core i9-12900HK, the fastest mobile processor ever developed. The 12^th generation Intel Core family would feature 60 processors and over 500 designs.
   
• In February 2022, Northrop Grumman and Curtiss Wright Corp. announced a partnership to bring a similar approach to more military-embedded systems featured on some in-service U.S. military aircraft. The partnership is anchored by single-board computers supplied by Curtiss Wright and Northrop Grumman’s Real-Time Virtualization & Modernized Protection (ReVAMP) virtualization software.     
   

The embedded systems market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2032, for the following segments:

Click here to Buy Section of this Report

Market, By Component

• Hardware
  • ASIC & ASSP
  • Microcontroller (MCU)
  • Microprocessor (MPU)
  • Power Management Integrated Circuit (PMIC)
  • Field Processing Gate Arrays (FPGA)
  • Digital Signal Processor (DSP)
  • Memory 
• Software
  • OS
  • Middleware

Market, By Function

• Standalone system
• Real-time system
• Network system
• Mobile system

Market, By Application

• Automotive
• Consumer electronics
• Manufacturing
• Retail
• Media & entertainment
• Military & defense
• Telecom
• Other

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Rest of Europe
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• MEA
  • UAE
  • Saudi Arabia
  • South Africa
  • Rest of MEA