The embedded systems market is expected to grow from US$ 104.31 billion in 2022 to US$ 159.44 billion by 2030. The embedded systems market is estimated to register a CAGR of 5.4% during 2022–2030.
Embedded systems play a crucial role in the consumer electronics industry. They are highly used in various consumer electronics devices such as smartphones, tablets, smartwatches, printers, smart TVs, gaming consoles, home appliances, wearable devices, digital cameras, smart speakers, and home security systems. These systems offer the essential speed and accuracy to ensure the seamless working of devices. Home security systems use peripheral sensors with embedded systems to ensure the safety and security of the house. Home appliances such as microwave ovens, refrigerators, and washing machines use embedded systems to collect input from users and control the appliance according to user specifications, which is projected to drive the embedded systems market. Embedded systems use sensors to collect information about appliance functioning and modify settings accordingly.
The increasing adoption of consumer electronics among consumers is driving the embedded systems market. For instance, according to Canalys, the demand for smartwatches has grown by 3%, and for basic watches, the demand increased by 21% in 2022. Consumers across the globe adopt smartwatches to track fitness and health data. Major players in the smartwatch industry are engaging in adding features to smartwatches to attract more customers. For instance, in July 2023, Apple Inc. develops a smartwatch capable of identifying Parkinson’s disease, diabetes, and Lyme disease, which is expected to be popular among the elderly population. The embedded system processes the data generated by smartwatches to track users’ health and fitness.
In Europe, the embedded systems market is seeing substantial growth in the automotive industry. Europe has a very significant automotive industry. For decades, the industry has been an important contributor to Europe's economic growth, innovation, and prosperity, accounting for almost 7% of the region's GDP. The industry also carries significant symbol taglines such as "Made in Germany," "Italian car design," "Euro NCAP for Saver Cars," and "British racing," which have come to stand for European innovation and craftsmanship. The increasing demand for embedded systems in the automotive industry is driven by the adoption of advanced driver assistance systems (ADAS), autonomous vehicles, and other connected car technologies.
Digitalization has made a significant impact on the embedded systems market. Digitalization has positively influenced the adoption of numerous wireless communication technologies such as Bluetooth, Wi-Fi, and cellular connectivity. These wireless communication technologies enable embedded systems to connect to the internet, cloud services, and other devices for effectively transferring data. According to the European Commission, in August 2023, the region plans to invest US$ 189.4 million in cutting-edge digital technologies and research. The advancement of digital technologies supports embedded systems to leverage more powerful processors, memory, and storage. This also allows the embedded system to process and analyze data locally, which is a highly used edge-computing application for making real-time decisions, is boosting the embedded systems market growth.
In 2023, the region also established a Horizon Europe Programme to boost collaborative research in artificial intelligence, robotics, and new materials. The evolution of AI-based embedded systems helps the user optimize performance by predicting equipment failures and mitigating downtime effectively. This supports the businesses to save operating time and additional cost of equipment by reducing the need for manual intervention. Thus, it increases the lifespan of equipment by driving the embedded systems market. The AI-based embedded system helps the user to improve their efficiency. AI algorithms can optimize processes and reduce waste, leading to more efficient resource utilization and cost savings. For example, an AI-powered HVAC system can understand occupancy patterns to adjust temperature and ventilation settings, which further leads to energy savings and improved comfort for building occupants. All these factors are expected to contribute to the embedded systems market growth in Europe.
In France, the growing investment in new and emerging technologies encourage key player to develop existing or adopt IoT/AI-based embedded systems. The Government of France is promoting and making investments in start-ups to develop new technologies that streamline business operations. For instance, in June 2023, French President Emmanuel Macron, an institutional investor, initiated an investment of US$ 6.3 billion in French start-ups and scale-up companies. This investment is made to advance the technology sector in the country. The France embedded systems market is driven by the growing number of enterprises shifting from legacy software to advanced IoT and AI solutions. According to IBM data, in 2022, 31% of companies deployed AI technology, and 44% explored AI to enhance their business operations. The deployment of AI technology embedded systems offers significant benefits to the users. An AI-based embedded system can monitor potential hazards and take corrective action. For example, an AI-powered autonomous vehicle can detect and respond to hazardous situations, improving the safety of passengers and other drivers on the road.
The embedded systems market in Italy is projected to grow in the near future, due to the increasing demand and adoption of embedded systems in various industries such as industrial automation, automotive, transport, defense and space, home automation, and especially in the healthcare industry. The healthcare industry increases the adoption adopts of embedded systems for advancing medical devices and equipment functionality. Increasing investment in the healthcare sector is propelling the embedded systems market in the region. For instance, in February 2023, the Government of Italy spent US$ 132.35 billion to advance the healthcare industry.
The government also plans to invest in AI technology as an integral part of health investments under the National Recovery and Resilience Plan (PNRR), is boosting the global embedded systems market growth. The AI-based embedded system offers healthcare professionals better diagnostics and treatment tools. The system enhanced the functionality of healthcare tools and improved the user experience for patients and healthcare service providers, leading to more effective and efficient care, is fueling the embedded systems market. The AI-based embedded system supports the nursing staff to track patients' vital signs and other health parameters. These systems process and analyze the collected data to make informed decisions about patients' care and treatment plans, are likely to positively impact the growth of the embedded systems market during the forecast period.
Infineon Technologies AG, Intel Corp, NXP Semiconductors NV, Qualcomm Inc, Renesas Electronics Corp, STMicroelectronics NV, Texas Instruments Inc, Microchip Technology Inc, Advantech Co Ltd, and Marvell Technology Inc are among the key embedded systems market players profiled in the report. Several other major embedded systems market players were studied and analyzed during this market research study to get a holistic view of the market and its ecosystem. The embedded systems market report provides detailed market insights, which helps the key players strategize their growth.