GVR Report cover Embedded System Market Report

Embedded System Market Analysis By Product (Hardware, Software), By Application (Automotive, Telecommunication, Healthcare, Industrial, Consumer Electronics, Military & Aerospace) And Segment Forecasts To 2020

  • Report ID: 978-1-68038-129-0
  • Number of Report Pages: 110
  • Format: PDF, Horizon Databook

Industry Insights

The global embedded systems market was valued at USD 140.32 billion in 2013 and is expected to reach USD 214.39 billion by 2020, growing at a CAGR of 6.3% from 2014 to 2020. Embedded systems are application-specific systems that are designed to meet the requirements of the target system in which they are embedded. Growing demand for devices such as smart electricity meters is expected to drive the global market over the forecast period. This is mainly because these devices incorporate embedded systems in order to ensure accurate and desired functionality.

The demand for smart meters is expected to continue increasing over the forecast period, on account of energy efficiency initiatives on a global level, thus giving impetus to the embedded systems market. Technological advancement, as well as decreasing prices of microcontroller units, is also expected to favorably impact the market over the forecast period. Embedded systems are used in numerous end-use industries; as a result, increasing demand from application areas such as healthcare and consumer electronics is expected to fuel market growth over the next six years.

Embedded System Market Trends

Electricity grids include a number of components, such as wires, switches, and transformers; smart grids add digital communication and remote control facilities. Smart grids ensure the facilitation of two-way communication through effective use of Information and Communications Technology (ICT). Europe and North America have been witnessing a large number of smart grid projects in various stages of deployment. Surging demand for smart devices such as smart electricity and water meters are significantly driving the demand for applications of embedded systems in the smart grids market. Smart meters enhanced with such embedded systems facilitate monitoring and management of energy consumption and ensure two-way communication with the utility. The usage of multi-core processors in embedded systems in order to facilitate low power consumption and higher efficiency is also a major growth driver. Growing smart grid initiatives and smart meter installations are expected to drive the market considerably over the forecast period.

Growing percentage of geriatric population as well as growing occurrences of lifestyle-related disorders is expected to drive demand for embedded systems in medical and healthcare electronic devices over the forecast period. Increasing longevity of the population and rising health-care expenditure result in the need for advanced and affordable medical equipment. In addition, declining embedded hardware prices and growth in the healthcare industry are expected to have a positive impact on embedded system demand over the coming six years.

When it comes to security, it is amongst the concerns for the embedded systems market. Security of embedded systems, where computing and analysis are embedded into the hardware or devices itself as in the Internet of Things (IoT), the embedded computers are challenged with vulnerability to issues such as of data privacy and theft. Moreover, these embedded systems are required to be safeguarded from unauthorized software modifications. As increasing number of embedded devices are used in security-sensitive applications such as in avionics and others, the embedded systems market increasingly face the requirement for heightened security. However, continuous efforts are being made towards securing the embedded systems programs from the potential threats such as hackers and data thefts. A recent development of secure software flashing scheme based on electronic digital signatures integrating the Elliptic Curve Cryptography mark and the Rivest Shamir Adleman (RSA) algorithm is in process of implementation as a means of granting the assurance for data security.

Product Insights

Embedded hardware accounted for 93.8% of the overall market share in 2013, and is expected to continue dominating the overall market over the forecast period. It primarily consists of microprocessors, Digital Signal Processors (DSP), microcontrollers, etc. Embedded software comprises operating system (OS), tools as well as middleware. Embedded systems have real-time constraints since they are used for a variety of safety critical purposes. This has led to the need for efficient software tailored for the target application. This segment is expected to grow at a CAGR of 8.1% from 2014 to 2020. 

Application Insights

Automotive applications accounted for 20.8% of the market in 2013 and are expected to remain the largest segment over the next six years. In the automotive space, embedded systems are used for engine control, infotainment, and safety among others. Increasing demand for vehicles equipped with effective navigation and car-to-road communication capabilities is expected to boost the market in this segment. Furthermore, increasing penetration of electric vehicles (EV) and hybrid electric vehicles (HEV) for ensuring emission control is estimated to drive embedded system consumption. Healthcare is expected to be the fastest growing application, at a CAGR of 7.1% from 2014 to 2020. Portable and handheld medical devices and equipment such as vital signs monitoring systems make extensive use of embedded systems. Consumer electronics including mobile phones, microwave ovens as well as HVAC (heating, ventilation, and air conditioning) systems use embedded hardware and software, and the segment is expected to grow faster than the global average over the next six years. Industrial applications comprise process control, energy, infrastructure, etc. Smart metering systems, as well as data acquisition and feedback control systems for automation, are expected to contribute to the global market for industrial applications. 

Regional Insights

North America was the largest regional market in 2013; it is expected to maintain its leadership position over the next six years. The Asia-Pacific market is expected to grow at the fastest CAGR of 6.7% from 2014 to 2020. This is made possible by the considerable number of trained professionals involved in software development for embedded systems in the region. In addition, the presence of fabrication plants such as the Taiwan Semiconductor Manufacturing Company (TSMC) has alleviated helped lower manufacturing costs.

The market in Asia Pacific is marked by the presence of semiconductor fabrication plants such as the Taiwan Semiconductor Manufacturing Company (TMSC); the region also comprises a significant number of skilled professionals. Companies operating in the global embedded systems market offer embedded software development as well as hardware such as microcontrollers and microprocessors. 

Competitive Insights

The global embedded systems market comprises a large number of players, divided on the basis of their product offering. Major hardware components developed include microprocessors, DSPs, and microcontrollers. Key industry participants include Renesas Electronics, Freescale Semiconductor, Intel Corporation, Samsung Electronics Corporation, Atmel and Qualcomm among others. Companies operating in the market report revenue generation from segments such as automotive, industrial, and multi-market segments such as healthcare, consumer electronics, telecommunication, etc. 

The global embedded systems market was valued at USD 140.32 billion in 2013 and is expected to reach USD 214.39 billion by 2020, growing at a CAGR of 6.3% from 2014 to 2020. 

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