Hardware Encryption Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented by Product Type (External HDD, Internal HDD, SSD, Inline Network Encryptor, USB Flash Drive), Application (Consumer Electronics, IT & Telecom, Transportation, Aerospace & Defense, Healthcare, Others), By Region, By Competition, 2020-2030F

Market Overview

The Global Hardware Encryption Market, valued at USD 300.49 Billion in 2024, is projected to experience a CAGR of 6.09% to reach USD 428.43 Billion by 2030. Hardware encryption employs dedicated physical components, such as Trusted Platform Modules or Hardware Security Modules, to perform cryptographic operations and manage keys, providing a secure root of trust independent of software. Main drivers supporting this market's expansion include the escalating global threat landscape with persistent cyberattacks, increasingly stringent data protection regulations like GDPR and HIPAA requiring robust data security measures, and the expanding adoption of cloud computing necessitating secure data-at-rest and data-in-transit solutions across diverse environments.

According to the FIDO Alliance's 2024 Online Authentication Barometer, awareness of passkeys, which frequently utilize hardware-backed security for enhanced protection, increased by 50% from 39% in 2022 to 57% in 2024, reflecting a growing recognition of robust authentication methods. A significant challenge impeding market expansion is the complexity and cost associated with integrating and managing hardware encryption solutions, particularly for organizations with limited IT resources or existing legacy infrastructures.

Key Market Drivers

The escalating landscape of cybersecurity threats and increasingly stringent data privacy regulations represent two paramount forces propelling the global hardware encryption market forward. The continuous rise in sophisticated cyberattacks and data breaches directly amplifies the demand for robust, hardware-backed security solutions. These breaches inflict significant financial and reputational damage upon organizations, driving a proactive shift towards more resilient protection mechanisms. According to IBM's Cost of a Data Breach Report 2024, September 2024, the global average cost of a data breach surged to USD 4.88 million in 2024, underscoring the severe economic consequences associated with compromised data. Simultaneously, governmental and regulatory bodies worldwide are enacting and enforcing stricter data privacy laws, compelling businesses to adopt advanced security measures to ensure compliance. The imperative to adhere to mandates such as the General Data Protection Regulation (GDPR) mandates the implementation of robust data protection practices, where hardware encryption provides an assured layer of security. According to DLA Piper's GDPR Fines and Data Breach Survey, January 2025, total fines issued under GDPR in 2024 amounted to €1.2 billion, highlighting the substantial penalties for non-compliance and reinforcing the critical need for effective encryption strategies.

These drivers collectively foster an environment where hardware encryption is no longer merely an option but a foundational requirement for securing sensitive information across diverse environments. As organizations navigate a complex threat landscape and rigorous regulatory frameworks, the inherent security advantages and verifiable integrity offered by hardware encryption solutions become indispensable. This increasing reliance reflects a broader industry movement towards more secure authentication and data protection methods. According to the FIDO Alliance, in December 2024, more than 15 billion online accounts can use passkeys for faster, safer sign-ins, signaling a growing acceptance and deployment of hardware-backed security methods on a global scale.

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Key Market Challenges

The complexity and cost associated with integrating and managing hardware encryption solutions represent a significant impediment to market expansion. Organizations, particularly those with constrained IT resources or established legacy infrastructures, encounter substantial difficulty in adopting these sophisticated security measures. The initial capital expenditure for dedicated physical components, coupled with ongoing operational expenses and the need for specialized personnel for integration and management, often proves prohibitive.

This situation leads to a slower uptake of hardware encryption, as enterprises weigh the benefits against the substantial investment and operational overhead. According to findings revealed by the Cloud Security Alliance in 2024, less than 10% of enterprises encrypted 80% or more of their cloud data, reflecting a notable lag in comprehensive data protection that can be partly attributed to the resource-intensive nature of implementing robust encryption solutions. Such low adoption rates directly restrain the overall growth of the hardware encryption market.

Key Market Trends

The pervasive integration of hardware encryption capabilities into everyday consumer devices, such as smartphones, laptops, and wearables, is driven by escalating user demand for enhanced privacy and security. According to the Semiconductor Industry Association, global semiconductor sales reached $627.6 billion in 2024, a 19.1% increase over the 2023 total of $526.8 billion, indicating a vast foundational market for components integrating such security features. This trend establishes hardware encryption as a standard expectation for the general public. For instance, Samsung Electronics announced in July 2025 new security enhancements for its upcoming Galaxy smartphones, including Knox Enhanced Encrypted Protection, which isolates applications within encrypted storage areas and is safeguarded by the on-device tamper-resistant Knox Vault hardware security framework.

The market exhibits a proactive shift towards quantum-resistant cryptography, aiming to future-proof data against potential quantum computer attacks. This trend involves developing and implementing new cryptographic algorithms resilient to both classical and quantum computing threats. The National Institute of Standards and Technology, in August 2024, published the first three Post Quantum Cryptography standards, FIPS 203, 204, and 205, specifying algorithms like CRYSTALS-Dilithium, CRYSTALS-KYBER, and SPHINCS+, thereby establishing foundational benchmarks for industry adoption. This standardization is crucial for guiding organizations toward a quantum-safe future. Microsoft, for example, released early-access post-quantum cryptography tools for Windows and Linux in May 2025, introducing NIST-standardized algorithms ML-KEM and ML-DSA for key exchanges and digital signatures, enabling testing of quantum-resistant security.

Segmental Insights

The External HDD segment is experiencing rapid growth within the Global Hardware Encryption Market, driven by increasing concerns over data security and stringent regulatory compliance requirements. Businesses and individuals increasingly require robust protection for sensitive information due to escalating cyber threats and the critical need for secure portable storage. Regulations such as the General Data Protection Regulation (GDPR), Health Insurance Portability and Accountability Act (HIPAA), and the California Consumer Privacy Act (CCPA) mandate advanced encryption for personal and confidential data, making hardware-encrypted external drives essential for adherence. Furthermore, the rise in remote work and the need for secure offline data backups alongside cloud solutions further propel the demand for these devices.

Regional Insights

Asia Pacific currently leads the Global Hardware Encryption Market due to extensive regional digitalization and an increasing number of data breaches, which collectively drive the demand for enhanced data protection across diverse sectors. The region is a prominent manufacturing hub for consumer electronics, including smartphones, and a significant provider of advanced Information and Communication Technology solutions, integrating hardware encryption into these widespread devices. Furthermore, substantial investments in emerging technologies like artificial intelligence and cloud computing necessitate robust security protocols to safeguard sensitive information. These factors, combined with growing regulatory mandates concerning data privacy and smart city initiatives, collectively accelerate the adoption of hardware encryption solutions in the region.

Recent Developments

• In June 2025, Infineon Technologies launched the TEGRION™ SLC27G, a new addition to its security controller family, featuring the advanced Integrity Guard 32 security architecture. This dual-interface and contactless controller was specifically designed for secured identification, payment, and authentication applications, emphasizing long-term security. The Integrity Guard 32 architecture offered highly efficient error detection and a self-contained 32-bit dual CPU system, engineered to meet stringent security standards. This product launch addressed the increasing global cyber threats and tightening regulatory frameworks by providing a robust hardware-backed solution within the hardware encryption market.

• In February 2025, Samsung Electronics initiated a significant advancement in mobile security by integrating post-quantum cryptography (PQC) into its Galaxy S25 series. This breakthrough research and development focused on employing advanced algorithms to safeguard cloud data against potential threats from future quantum computing. Samsung followed standards recommended by the National Institute of Standards and Technology (NIST), utilizing lattice-based mathematics to create encryption keys exceptionally difficult for quantum computers to solve. This strategic move positioned Samsung as a leader in future-proofing hardware-backed data protection, directly impacting the global hardware encryption market's evolution towards quantum-safe solutions.

• In January 2024, Seagate Technology Holdings plc introduced its new 24TB IronWolf Pro hard drives, targeting the expanding data storage needs of small to medium-sized businesses and enterprise network-attached storage environments. These drives, designed for continuous operation, incorporated Seagate's IronWolf Health Management system, which provides data protection through prevention, intervention, and recovery recommendations for compatible NAS systems. Furthermore, the IronWolf Pro drives featured Seagate Secure capabilities, offering hardware-based data security. This product launch underscored advancements in high-capacity storage solutions that also prioritize integral data encryption and integrity within the global hardware encryption market.

• In January 2024, Rambus announced a new CXL 3.1 Controller IP designed for next-generation data centers, incorporating robust hardware encryption features. This controller included a built-in, zero-latency Integrity and Data Encryption (IDE) module, specifically engineered to deliver state-of-the-art security against physical attacks on CXL and PCIe links. The integration of AES-GCM symmetric-key cryptographic block ciphers within the IDE modules was crucial for ensuring confidentiality, integrity, and replay protection for data traffic. This development represented a significant advancement in semiconductor intellectual property, directly bolstering hardware encryption capabilities for high-performance computing and AI workloads.

Key Market Players

• Western Digital Technologies, Inc.
• Samsung Electronics Co., Ltd.
• Micron Technology, Inc.
• Kingston Technology Company, Inc.
• Seagate Technology Holdings plc
• NetApp, Inc.
• Kioxia Holdings Corporation
• Kanguru Solutions
• Intel Corporation
• Toshiba Corporation

Report Scope:

In this report, the Global Hardware Encryption Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Hardware Encryption Market, By Product Type:

o   External HDD

o   Internal HDD

o   SSD

o   Inline Network Encryptor

o   USB Flash Drive

• Hardware Encryption Market, By Application:

o   Consumer Electronics

o   IT & Telecom

o   Transportation

o   Aerospace & Defense

o   Healthcare

o   Others

• Hardware Encryption Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

o   Asia Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Hardware Encryption Market.

Available Customizations:

Global Hardware Encryption Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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