Hardware security modules market set to double by 2028

The global hardware security modules market has been projected to grow from USD $1.2 billion in 2023 to USD $2.3 billion by 2028, according to a report by Research and Markets. This represents a compound annual growth rate (CAGR) of 13.5% from 2023 to 2028.

According to the analyst firm, the key drivers for this growth include a rise in data breaches and cyberattacks, the need for stringent data security compliances, and the increase in digital transactions and electronic payments that heighten the need for protecting sensitive financial data. Conversely, a significant obstacle for the growth trend appears to be the high ownership costs that come with hardware security modules.

USB-based/portable hardware security modules (HSMs) are forecasted to witness the highest growth in the market during this period primarily due to their compact size, portability features, and lower cost,  the research shows. These modules, which are capable of encryption and key protection, can be used for a variety of tasks such as digital signatures and secure key storage, coding and signing. "These modules are preferred by all the industries as they offer superior security, cost-efficiency, and ease of deployment," the report noted. Furthermore, widespread use by governments and financial institutions signifies their value in data, applications, and identities protection.

The cloud deployment segment is expected to outperform compared to the on-premise segment in terms of growth during the forecast period. Cloud-based HSMs provide users with the ability to perform cryptographic operations and absolute control over keys. They also allow for scalability by adding and removing hardware security module capacity with no up-front costs, generate their own encryption keys on the cloud, and offer flexible integration with applications.

In the application of Secure Sockets Layer (SSL) and Transport Layer Security (TLS), HSMs are predicted to grow at the highest CAGR of 15.7 per cent. The modules offer a secure boundary for cryptographic operations and communications, making them highly beneficial in securing onboard communication. They store and manage cryptographic keys used in SSL/TLS protocols, never leaving the HSM which ensures protection from unauthorised access.

The Asia Pacific region is projected to experience significant growth in the hardware security modules market between 2023 and 2028. The presence of three of the world's largest economies - China, India, and Japan, provides ample market potential. An increase in demand for hardware security modules - driven by a rise in manufacturers with diversified business units - is accounted to the region. These reasons, in addition to rapid adoption of HSMs by enterprises in the area, are fostering the growth of this particular market.

The report offers insights into key drivers, restraints, opportunities influencing market growth, alongside product development, innovation, market development, market diversification information and competitive assessments.