Embedded Systems Market Analysis

Embedded Systems Market Analysis

According to the systems, the embedded systems market is classified into hardware and software. The increasing demand for smarter devices is driving integrated embedded systems in the form of hardware and software. Companies working towards the development of hardware and software solution are embracing the new paradigm of AI with the integration of smart features in the appliances used in home and other areas. For instance, Renesas QuickConnect is a cloud-based platform that allows engineers to develop software and hardware simultaneously.
 

• The hardware market of embedded systems will reach a value of USD 120 billion by 2034. The growing transition towards autonomy generates demand for high computing performance devices for various industrial applications. For instance, in November 2023, Advantech released its AIMB-723 industrial ATX motherboards with AMD RYZEN embedded processors. It supports the machine vision application with scalability to support up to 3 slot discrete GPU card.
   
• With the aim of boosting hardware efficiency and software development, companies are forming separate business units to develop the devices for data centers, industrial, cloud and automotive sectors. For instance, Intel launched a standalone Field Programmable Gate Array (FPGA) business unit in March 2024 with the intention of selling reconfigurable chips so that consumer electronics users have the liberty to accelerate specific workloads.
   
• By 2034, the Software market is expected to reach a value of 82.5 billion. With the increase in demand for new safety features in vehicles there is a high demand for software to provide a robust solution that adheres to the standards of the automotive industry. Companies are developing embedded software to provide autonomous solutions for vehicles by enhancing the safety features. According to The America Automobile Association (AAA), the two-third of U.S. drivers wants reverse automatic emergency braking, lane keep assistance and automatic emergency braking. This results in software developers providing improved embedded software solutions to vehicles.
   
• In January 2024, Vector started to offer embedded software for Electronic Control Units (ECUs) that meets the safety requirements standards of ISO 26262. The solution is suitable for autonomous driving.
   
• Financial sector demand for efficiency forms a basis for embedded software into the finance market. For instance, in December 2024, Australia’s Tyro launched embedded payment software which enables the business to accept tap-to-pay payments through any device and point-of sale systems.
   

Based on system size, the embedded systems market is divided into small-scale embedded system (8-bit), Medium-scale embedded system (16-32-bit) and large-scale embedded system (Above 32-bit). These system sizes are in need for the growing need of automation, automative innovation and the gain in popularity of IoT. All these areas need different sizes of embedded systems to cater to the specific needs.
 

• The small-scale embedded system (8-bit) market is expected to grow at a CAGR of 5.5% in the forecast period. To support the IoT devices specifically for low complexity applications such as consumer electronics, simple control systems and home automation, small scale (8-bit) embedded systems are in demand. For instance, in November 2023, Silicon labs unveiled the 8-bit Microcontroller Unit (MCU). The company’s aim of launching this option was to optimize the performance of embedded computing solutions.
   
• By 2034, the medium-scale embedded system (16-32 bit) is anticipated to grow and reach a value of USD 94.7 billion. The increasing deployment of faster and reliable solutions in the industrial and healthcare units creates space for the range of 16-to-32-bit embedded systems to grow. The growing usage of signal processing, UI control and data storage in the market provides opportunities for the 16-to-32-bit embedded system to grow.
   
• The rise in microcontrollers in industrial and automotive sectors for faster outputs depicts the growth of the medium-scale embedded systems. Organizations are introducing microcontrollers of medium size for motor applications such as in March 2024, Toshiba electronics Devices & Store Corporation added 8 new microcontrollers equipped with Cortex- M4 core. These applications suggest strong motivation for the embedded system developers to use microcontrollers for handling real time processing requirements such as controlling actuators and managing sensor data.
   
• The large-scale embedded system (above 32 bit) market is projected to grow with a CAGR of 7.2% in the forecast period.  The growing need for power efficiency and high reliability in real time computing is creating a path for the large scale (above 32 bit) embedded systems to grow. For instance, in September 2024, Microchip Technology introduced PIC64 to serve the growing need in the aerospace & defense, automotive, industrial, and communications sectors.
   
• To meet the need of expanding space market, Microchip announced its PIC64 High-Performance Spaceflight Computing (PIC-64-HPSC) MPUs. With the new space exploration mission taking place, the requirement for applications like smart vision for real time data transitioning is growing. This necessitates the need for a large embedded system in the market.
   
• With the introduction of its PIC64 portfolio, Microchip has become an embedded solutions provider actively developing a full spectrum of 8-, 16-, 32- and 64-bit microcontrollers (MCUs) and MPUs.
   
• The various sizes of embedded systems available help sector such as industrial, consumer electronics, military & defense. This ensures real-time monitoring, predictive maintenance and smart control in manufacturing processes. The appliances which have embedded systems in them enhance their functionality and consumes less energy.
   

Classified by functions, the embedded systems market is segmented into standalone system, real-time system, network system and mobile system.
 

• Standalone system market held a market size of USD 46.2 billion in 2024. The rise in automation reflects the growth of standalone embedded systems. These systems do not depend on the external systems or network for their functionality. The increasing need for modular and scalable solutions is also providing popularity for standalone systems.
   
• Real-time system market is anticipated to grow and reach a value of USD 65.9 billion by 2034. The need for real-time processing in high precision industries such as manufacturing, healthcare, and robotics represents the rise in demand for real-time embedded systems. These systems provide an advantage of delivering fast and accurate data for commercial and industrial activities. Real time systems have become important for manufacturing vehicles due to the provision of predictable data within the required timeframe.
   
• The network system market is expected to grow at a CAGR of 7.3% in the forecast period. To protect the critical security infrastructure and counter the new cyber threats, there is an increase in development of network systems which are embedded into the systems with Programmable Logic Controller (PLC). For instance, in July 2024, Nozomi Networks announced their security sensor embedded in industrial control systems. The system is embedded in Mitsubishi Electrical PLC. The Nozomi Arc embedded in it provides ways to detect and respond to cyber threats. This approach helps in maintaining the process of integrity and protection of the critical infrastructure.
   
• Mobile system market is predicted to grow and reach a value of 23.5 billion by 2034. The rise in consumer preference for portable devices which have systems to cater every application ranging from entertainment to finance is creating the demand for embedded mobile systems.
   
• With the proliferation of IoT and 5G connections the demand for mobile systems is gaining momentum. According to data from 5G America and Omida, global IoT subscription stands at 3.4 billion which is complemented by 6.7 billion smartphone subscription in 2024. Thus, giving a boost to mobile systems in the current market. With advancement in real-time computing, increased processing power, rising connectivity and expansion of IoT-enabled devices in the market, the demand for embedded systems is growing catering to the need for intelligent and power efficient solutions.
   

Based on application, the embedded systems market is segmented into automotive, consumer electronics, manufacturing, retail, media & entertainment, military & defense, Telecom and others. This application widely integrates embedded systems which enhances the existing features in the growing market.
 

• The automotive market is expected to grow at a CAGR of 6.6% in the forecast period. With the rise in automation the embedded systems are also witnessing a growing trend. Connected cars which provide enhanced experience is initiating inclination among the manufacturers to develop automatic embedded systems for cars to respond in real time situation and provide data that is accurate for decision making.
   
• The rise in sale of connected cars is pushing the boundaries for embedded systems as Hyundai Motor India Limited reported that the contribution of connected car to their retail sales constituted to 25.7% as compared with 4.7% in 2019.
   
• By 2034, the consumer electronics market is projected to grow and reach a value of USD 51.3 billion. The growing shift of consumers towards electronic devices with advanced features is creating significant demand for embedded systems in the market. Embedded systems are used to enhance the features that help smartphones, smart TVs and other household appliances to be connected to each other. According to GSM Association annual state of mobile internet connectivity report 2023, over half of the global population (approximately 54%) owns smartphone. This strongly reflects the widespread integration of smart devices and thus providing growth opportunities for embedded systems.
   
• The integration of AI in consumer appliances is also enabling the embedded systems to grow on a larger scale. For instance, in April 2024, Samsung announced AI powered home appliances with inbuilt wi-fi and internal cameras providing the end consumers with a customized experience for use in daily activities.
   
• Manufacturing machines market is estimated to grow and reach a value of USD 26.4 billion by 2034. With the rise in global production of goods in industries, manufacturers are focusing on increased manufacturing efficiency. This efficiency is taken care of by the embedded systems. Embedded systems help to sync manufacturing processes by using edge computing. According to the United Nations Industrial Development Organization, there is 1.5% year-on-year growth of global production which typically suggests the accelerated dynamics of the manufacturing sector across the globe.
   
• The retail market is predicted to grow and reach a value of USD 17 billion in 2034. With the advent of technologies in the retail sector, the embedded systems find various applications such as autonomous shopping, smart surveillance, telepresence, smart signages and other related services.
   
• By 2034, the media & entertainment market is expected to rise and reach a value of USD 28.6 billion. Embedded systems are embracing growing sectors of media & entertainment. The over-the -top (OTT) services have increased the demand of consumers watching on demand videos and thus ensuring a growth opportunity for embedded systems. Embedded software in setup boxes enables the user to view on demand shows. According to Statista, the global OTT video market worldwide is projected to reach USD 343.8 billion in 2025.
   
• The telecommunication market is projected to grow and reach a value of USD 19.7 billion by 2034. The development of software defined networks (SDN) and network functions visualization (NFV) in the telecom sector is ensuring global opportunities for the embedded systems to grow. As the telecom sector is facing challenges from cyber threats the embedded systems are deployed to strengthen network security and help in protecting sensitive information of the users.
   
• The military & defense market is anticipated to grow and reach a value of USD 10.5 billion by 2034. With the rise in military & defense budgets worldwide, the military forces are focusing on advanced embedded systems to get quick response and data transfer. There is a greater demand for fast computing systems in military & defense which can withstand tough environment. For instance, in February 2024, Vecow Co, Ltd. announced its launch of workstation-grade fan less high endurance system. With its ability to endure extreme temperature and resistance to moisture it is widely used in military grade designs.
   
• The energy market is expected to reach a value of USD 13.2 billion by 2034. With the demand to reduce energy consumption and aim for sustainability the embedded systems are offering smarter solutions that utilize less power for various applications. For instance, in October 2024, AMD launched its Epyc embedded 8004 series processors which deliver high performance with low wattage computing.
   

All these applications are progressing with the integration of new embedded systems offering fast and reliable solutions. The use of AI in manufacturing and military divisions entails the growing opportunities of systems integrators in providing smarter solutions for the challenges, reduce the downtime of production and increase the ruggedness of military devices.
 

The North America embedded systems market is expected to grow at a CAGR of 6.5% in the forecast period. The region has been always at the forefront in adopting new technologies and processes. The region supports the development of newer technologies and invest in research and development. This supports the growing trend of embedded systems in the region.
 

• The U.S. embedded systems industry is expected to reach a value of USD 51.2 billion by 2034. With the growth of U.S. automotive sector there are opportunities for the market. According to data from IFR the total installations of industrial robots rose by 12% and reached 44,303 units in 2023.
   
• According to IFR, U.S. electrical and electronics industry rose by 37% in 2023. The rise in electronics sales helped the embedded systems market to grow by developing new software solutions. For instance, in October 2024, Analog Devices, Inc. launched an embedded software development environment to speed the development of Intelligent edge. The platform unites cross-device, cross-market hardware, software and services.
   
• By 2034, Canda embedded systems market is expected to reach a market value of USD 13.4 billion. The country is embracing the dynamics of the business around the embedded systems. For instance, in September 2024, Nmbr secured USD 5.5 million to develop the payroll ecosystem for business nationwide with embedded payroll software in the country.
   

The Asia Pacific embedded systems market is projected to grow significantly, reaching USD 53.9 billion by 2034. The region is a hub for semiconductor and its development.  Embedded systems require the semiconductor chips in their hardware. According to International Federation of Robotics (IFR) Asia pacific region is leading in industrial robots installation.
 

IFR in September 2024 highlighted that the new world Robotics report recorded 553,052 industrial robots’ installation in factories around the world expediting a growth of 5% as compared to the year 2022. 73% of the newly deployed robots were installed in Asia. This reflects the region will be having increase in demand for embedded systems supported by AI for the industrial processes.
 

• In China, the embedded systems industry is projected to grow at a CAGR of 7.2% in the forecast period. China’s growth in robotics is acting as a critical aspect for the growth of embedded systems market. According to IFR China represented 51% of the total industrial robots installed globally in 2023 with 276,288 industrial robots. Such numbers reflect that the country is embracing automation in industries and thus providing a basis for the increase in development and production of AI enabled embedded systems.
   
• Embedded Operating Systems (OS) is thriving in China as companies are developing OS in the electronics market for its global users to offer interactive experiences. For instance, in December 2023, Xiaomi presented its new HyperOS which is shifting the Chinese mobile manufacturers towards connecting handsets, cars and home appliances to provide an enhanced customer experience.
   
• By 2034, India embedded systems market is predicted to reach a value of USD 11.9 billion. In the pursuit of developing next generation software defined vehicles (SDV) in India, the companies are forming centers to leverage the potential of embedded systems developers. For instance, in March 2023, BlackBerry Limited announced the new BlackBerry IoT center of excellence for scaling up the operation and meet the growing demand of mission-critical embedded software solutions in India.
   
• Government of India is supporting the industry 4.0 transition through its SAMARTH Udyog Bharat 4.0 which focuses on the awareness on automation through various programs. It also brings information to its stakeholders such as manufacturers and vendors about the industry 4.0. This provides an opportunity for manufacturers and developers of embedded systems.
   
• Japan embedded systems held a value of USD 2.2 billion in 2024. Japan had the second largest global market for industrial robots.  According to IFR the installation of robots in Japan reached to 46,106 units in 2023. Embedded systems act as a brain in robots delivering the robotic systems the ability to sense the environment and act accordingly. This is one of the prime reasons for the growth of embedded systems in the country.
   
• It’s expected that the South Korea embedded systems market will reach a value of 3.4 billion by 2034. To strengthen the cybersecurity South Korea is making strategic team ups to solidify the security landscape. For instance, in April 2024, Secure-IC, a provider of end-to-end embedded cybersecurity solutions, made collaboration with COONTEC to enhance security measures for both hardware and software domains.
   
• Australia embedded systems market is expected to grow at a CAGR of 6.8% up-to 2034. Startup companies are coming forward and providing solutions in the finance sector with embedded systems. This reflects the growing trends of embedded platforms. For instance, in December 2024, Kobble provided Australian bank with embedded financial services including fraud monitoring and compliance automation tools.
   

Europe embedded systems market was valued at USD 31.1 billion in 2024. To address the growing needs of growing complexities in the finance sector, there are needs for simplifying payment process. This is creating opportunities in the market of embedded systems. For instance, in October 2024, Worldline and OPP launched embedded payment solution in Europe. Embedded payment systems include split systems, advanced escrow services which are formed for optimization of revenue generation and improve user interaction for platforms.
 

• U.K. embedded systems market is anticipated to grow and reach a value of USD 7 billion by 2034. The country is progressing with the adoption of newer technologies for integration of embedded systems with AI, IoT or EdgeAI. The innovative UK business connect supports the innovators working on smart systems, EdgeAI and microprocessors thus reflecting the growth opportunities in the market. Moreover, the UK government is advising for the best practices in embedded device security. The aim is to secure the Operational Technology (OT) and Industrial Control System (ICS) hardware.
   
• Germany embedded systems market is projected to grow at a CAGR of 6.2% in the forecast period. Germany is a hub of automotive manufacturers and suppliers. With the rise in electric vehicles and consumers demand for connected vehicles and car infotainment systems; the embedded system market is having opportunities for growth.
   
• Germany is advancing in the market of embedded systems by updating the current software and platforms. The new version BTC Embedded Platform 23.3 has been certified by German TÜV Süd is fit for safety critical development projects.
   
• The France market for embedded systems is expected to reach a value of USD 6 billion by 2034. France has a well-developed healthcare system that is embracing the transformation digitally.  France which has the ageing population requires healthcare systems with embedded systems installed in them.
   
• Italy embedded systems market held a value of USD 3 billion in 2024. With the growing IoT, there is an increase in the embedded IoT cybersecurity. Companies are investing in the market of embedded systems to grow and provide solutions for cyberthreats.
   
• Spain embedded systems market is projected to reach a value of 4.2 billion by 2034. With the growing concept of smart cities, the embedded systems market finds a place to grow as countries like Spain focuses on smart cities integration with intelligent transportation systems, environment monitoring and public safety.
   
• Netherlands embedded systems market is anticipated to grow and reach a value of USD 2.9 billion by 2034. The country is developing embedded solutions in the automotive sectors and the medical industry.
   

The embedded systems market in Latin America is expected to grow from 2025 to 2034 and reach a value of USD 15.6 billion by the year 2034. With the growth of automotive sectors and need of safety features in the vehicles the embedded systems market is growing in the Latin America region.
 

• Brazil embedded systems market is expected to grow at a CAGR of 5.2% up-to 2034. With the rising trend of automotive electronics, embedded software is playing an important role in Advanced Driver Assistance Systems (ADAS) as these are embedded within the larger systems of vehicles to aid in driving and thus enhancing the safety features. Brazil is witnessing a trend of development in embedded software.
   
• By 2034, Mexico embedded system market is anticipated to grow and reach a value of USD 4.3 billion by 2034. As the telecom sector is expanding with the rise in adoption of 5G, the country is witnessing embedded systems growth as it forms an integral part of telecommunication equipment.
   
• Argentina embedded systems market is predicted to grow at a CAGR of 6.6% up-to 2034. The growing agricultural demands and the need of developing smart infrastructure is leading to integration of embedded systems and thus providing growth opportunities in the country.
   

The embedded systems market in MEA is expected to grow from 2025 to 2034 and reach a value of USD 12.6 billion by the year 2034. The Government across the region are investing in the smart infrastructure and digitalization as the projects such as NEOM is creating greater demands of embedded systems technologies.
 

• Saudi Arabia embedded system market is project to grow at a CAGR of 4.6% in the forecast period. To meet the initiatives of vision 2030, the country is embracing the embedded technologies. The growth of automotive electronics and electric vehicles trend in the country is shifting the focus of the market towards embedded technologies. According to Statista, Saudi Arabia accounts for almost half of the region’s car sales, with over 600,000 new vehicles registered annually.
   
• By 2034, South Africa embedded systems market will reach a value of USD 1.2 billion. South Africa is adopting embedded systems for industrial automation particularly in mining, manufacturing, and logistics. Moreover, the healthcare sector is also advancing by the deployment and integration of medical devices with the embedded systems.
   
• The UAE embedded systems market is anticipated to grow at a CAGR of 6.2% in the forecast period. The country is acknowledging the digital shift with the adopting of AI driven technologies and aims to transform the country’s cities.