Network Processing Unit Market Size, Share & Trends Analysis Report By Product (Wireless NPU, Wired NPU), By Application (Consumer Electronics, Military & Government, Communications & IT, Automotive), By Region, And Segment Forecasts, 2024 - 2030

Network Processing Unit Market Trends

The global network processing unit market size was estimated at USD 7.16 billion in 2023 and is projected to grow at a CAGR of 17.1% from 2024 to 2030. The growing need for high-performance networking solutions is driving the adoption of NPUs. As data traffic continues to escalate, Network Processing Unit (NPU) provide the necessary capabilities to handle complex networking tasks, ensuring improved performance and reliability in data transmission across various sectors. Moreover, with the rise in cyber threats, there is a heightened emphasis on security features in networking solutions. NPUs facilitate advanced security functions, such as deep packet inspection and encryption, ensuring secure data transmission across networks.

Key industry suppliers continuously advance NPU technology, introducing increasingly powerful and sophisticated NPUs. These new models incorporate cutting-edge technologies such as programmable logic, high-speed memory interfaces, and machine learning accelerators. As a result, NPUs can manage and perform a broader range of networking tasks more efficiently. Moreover, advancements in network function virtualization (NFV) and software-defined networking (SDN) are paving the way for more flexible and scalable NPU-based systems.

Product Insights

The wired NPU segment led the market accounting for 54.1% revenue share in 2023. The global growth of wired NPUs (Network Processing Units) is being fueled by a surge in data traffic and the ongoing modernization of network infrastructures. As data centers, enterprise networks, and telecom systems expand to accommodate the increasing demands of cloud computing, IoT, and streaming services, the need for advanced NPUs that can efficiently manage and process this data becomes more critical. Technological advancements, including improvements in programmable logic, high-speed memory interfaces, and machine learning capabilities, are enhancing the performance and versatility of wired NPUs. Additionally, the rollout of 5G networks and future technological developments necessitate NPUs with robust processing power to handle higher data throughput and ensure seamless connectivity.

The Wireless NPU based segment is predicted to foresee significant growth over the forecast period. The prominent growth of wireless NPUs (Network Processing Units) is driven by the rapid expansion of wireless networks and the increasing complexity of network traffic. As wireless communication technologies advance, including the widespread adoption of 5G and the development of future generations, the demand for high-performance wireless NPUs that handle increased data volumes and network functionalities is growing. These NPUs are essential for managing modern wireless networks' diverse and demanding requirements, such as high-speed data transfer, low latency, and advanced network management. Additionally, the rise of IoT devices and smart technologies further amplifies the need for sophisticated wireless NPUs that can efficiently process and route data across expansive networks. Technological innovations in areas like machine learning and real-time data processing are enhancing the capabilities of wireless NPUs, making them increasingly vital for supporting the evolving landscape of wireless communications.

Application Insights

The Communications & IT segment led the market and accounted for 29.4% of the global revenue in 2023. As businesses increasingly rely on cloud computing, IoT, and data-intensive applications, the demand for NPUs has surged, driven by the need for improved network performance and security features. NPUs support high data throughput and enable the implementation of quality of service (QoS) policies, which are essential for prioritizing critical applications and managing network congestion. Furthermore, their programmability allows for adaptability to evolving networking standards and applications, making NPUs a cornerstone of contemporary IT infrastructure. As the communications landscape continues to evolve, the role of NPUs in ensuring efficient and secure data transmission will remain crucial for businesses aiming to enhance their operational capabilities and maintain competitive advantages in a rapidly changing digital environment.

The Automotive segment is expected to grow significantly over the forecast period. The automotive applications of network processing units (NPUs) are experiencing significant growth, driven by advancements in vehicle technology and the increasing demand for connected and autonomous vehicles. NPUs play a crucial role in managing the complex data processing requirements of modern vehicles, facilitating communication between various in-vehicle systems and external networks. As vehicles become more integrated with advanced driver-assistance systems (ADAS), infotainment systems, and vehicle-to-everything (V2X) communication technologies, the need for efficient data handling and real-time processing becomes paramount. NPUs enable high-speed data processing for tasks such as sensor fusion, where data from multiple sensors (like cameras, radars, and LiDAR) is combined to create a comprehensive understanding of the vehicle's environment. This capability is essential for ensuring safety and enhancing the driving experience.

Regional Insights

North America held significant share in the market and accounted for a 31.3% share in 2023. North America, particularly the United States, is at the forefront of technological innovations in networking solutions. The region is home to many major tech companies and research institutions that are continuously developing advanced NPUs with higher processing capabilities, enabling efficient data handling and improved network performance. Moreover, North America is witnessing substantial investments in upgrading and expanding networking infrastructure to accommodate the growing demand for high-speed data transmission.

U.S. Network Processing Unit Market Trends

The U.S. network processing unit market is accounted to hold the highest market share over the forecast period; significant expansion of 5G networks in this region is augmenting the market growth. The rollout of 5G technology is a significant trend impacting the NPU market. Network processing unit are crucial for managing the increased data flow and supporting the low-latency requirements of 5G networks. The demand for network processing unit is expected to surge as telecom providers expand their 5G infrastructure.

Europe Network Processing Unit Market Trends

The adoption of Network Processing Units (NPUs) in Europe is witnessing a strong growth, which is driven by the integration of AI and machine learning technologies into networking solutions is influencing the NPU market in Europe. NPUs are increasingly being utilized to support complex computational tasks associated with AI, enhancing their capabilities and performance in handling large volumes of data. Moreover, As European organizations move towards edge computing architectures, NPUs are becoming critical components in processing data closer to the source. This trend reduces latency and bandwidth usage, making NPUs essential for real-time data processing applications.

Asia Pacific Network Processing Unit Market Trends

The Asia-Pacific Network Processing Unit market is experiencing rapid growth attributed to the adoption of digital technologies across various sectors. This trend is driving the demand for NPUs, which are essential for managing high-speed data processing and communication in digital infrastructure. Moreover, the Asia Pacific region is poised for substantial growth in the network processing unit market, driven by rapid digital transformation, the expansion of 5G networks, growing IoT adoption, investments in data centers, a focus on network security, technological advancements, and strategic collaborations. These factors collectively position Asia Pacific as a key contributor to the global NPU market, with significant opportunities for businesses and stakeholders in the coming years.

Key Network Processing Unit Company Insights

Prominent firms have used product launches and developments, followed by expansions, mergers and acquisitions, partnerships, and collaborations contracts, agreements, as their primary business strategy to increase their market share. The companies have used various techniques to enhance market penetration and boost their position in the competitive industry. For instance, in August 2023, Fortinet, a global player in cybersecurity known for integrating networking and security solutions, unveiled the FortiGate 90G. This groundbreaking Secure SD-WAN appliance and Next-Generation Firewall (NGFW) features the latest Security Processing Unit 5 (SP5) ASIC, which provides unparalleled AI-driven threat protection, scalability, and energy efficiency at a competitive price. As part of Fortinet’s Secure Networking portfolio, the FortiGate 90G enhances the company’s capacity to offer consistent security, unified management, advanced analytics, and FortiGuard AI-Powered Security Services across diverse hybrid networks.

Recent Developments

• In September 2024, Qualcomm Technologies, Inc. unveiled the latest addition to its Snapdragon X Series portfolio: the Snapdragon X Plus 8-core platform. This groundbreaking technology delivers extended multiday battery life, exceptional performance, and AI-powered Copilot+ experiences, making these advanced features accessible to a broader audience.

• In May 2024,Broadcom Inc. announced its newest range of high-performance, scalable, and low power 400G PCIe Gen 5.0 Ethernet adapters designed for the data center ecosystem. These advanced products provide an open, improved, standards-based Ethernet NIC and switching solution, addressing connectivity bottlenecks that arise as XPU bandwidth and cluster ranges expand promptly in AI data centers.

Network Processing Unit Market Report Scope

Global Network Processing Unit Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global Network Processing Unit market report based on product, application, and region.

• Product Outlook (Revenue, USD Million, 2018 - 2030)

  • Wireless NPU

  • Wired NPU

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Consumer Electronics

  • Military & Government

  • Communications & IT

  • Automotive

  • Data Centers

  • Others

• Regional Outlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa