The global embedded systems market will grow at a CAGR of more than 1.6 times by 2031

The proliferation of smart solutions and the Internet of Things (IoT) has led to a steady increase in interest in embedded systems. But at the same time, manufacturers of such solutions will have to face a number of serious challenges in the coming years. Here is a look at the current state of the embedded systems market, trends, prospects and challenges for its participants.

Current situation on the global embedded systems market

Experts of Coherent Market Insights estimate the volume of the global market of embedded systems in the current year at $174.2 billion. According to their forecast, by 2031 this market segment will increase more than 1.6 times - up to $283.1 billion, provided that the current compound annual growth rate of 7.2% is maintained.

North America holds the leading position in the embedded systems market, which, according to expert estimates, will account for more than 35% of the total market volume in 2024. This is due to both the consistently high demand for such solutions and government support aimed primarily at the development of innovations. In turn, the largest growth in this direction is demonstrated by the countries of the Asia-Pacific region: China, Japan, South Korea. The reasons for such dynamics are the presence of large and growing domestic markets, highly qualified engineering schools, significant investments in the production of such high-tech products, the possibility of optimising production costs, including through economies of scale, as well as incentives from government agencies (tax benefits, financing, preferential regimes for domestic products). All this has allowed the Asia-Pacific region to develop both a developed scientific and production infrastructure and a dynamically growing market.

In terms of industry leaders, it is worth noting that there are both diversified technology giants (Microsoft, Samsung,) and manufacturers of microchips, processors and other similar solutions (Qualcomm Incorporated, Texas Instruments, Microchip Technology Inc.). Moreover, it is important that there is competition between the "old" players and new growing companies, representing primarily China and India.

Drivers and challenges of the embedded systems market

In the coming years, one of the key drivers of the global embedded systems market will be the spread of "smart" solutions, both on the scale of a flat or building, and on the scale of a city or its part (district or neighbourhood). At the same time, such solutions are constantly improving: for example, in recent years, AI has been actively used to analyse data coming from smart devices.

Further growth in demand for standalone embedded systems is expected. It is predicted that by the end of 2024 their share in the total market will exceed 37% and will increase further. Such solutions are particularly in demand in the Internet of Things segment: these include smart home appliances, industrial equipment, smart home components, and medical devices.

We will focus separately on the automotive solutions segment. By the end of 2024, it is expected that its share in the total market will approach 41% and may grow even more significantly. It is no secret that modern cars are essentially a gadget on wheels, equipped with many inbuilt electronic systems: engine and transmission control, multimedia, climate control. In addition, solutions for fleet management are in demand: monitoring systems for trucks, buses, taxis and other corporate vehicles. This helps to optimise costs and ensure even loading of vehicles.

What challenges will the embedded systems market face? Of course, the most serious one is the fragmentation of this market. Currently, there are many different platforms and components, which prevents the creation of single universal solutions, and also prevents the compatibility of products from different manufacturers. In the future, such factors will negatively affect the introduction of innovations, as well as lead to an increase in the cost of product development and implementation. That is why standardisation and unification of solutions is one of the most promising tasks.

Another equally important challenge is the relatively high cost, especially of security devices. Together with the lack of unified platform solutions and market fragmentation, this limits the pace of development and penetration of embedded systems into everyday life in developing countries.

Joining ExpoElectronica 2025 - an opportunity to make a name for yourself

Given the dynamic development of embedded systems on the Russian market, there is a mutual interest of manufacturers and consumers of such solutions: the former are interested in expanding cooperation and entering new segments, while the latter are interested in obtaining the most advanced products. Industry events, the largest of which within the EAEU is ExpoElectronica, the international electronics exhibition. For over 26 years, it has been a key industry event uniting both market players and consumers.

The demand for ExpoElectronica among the industry community is emphasised by the interest of the target audience. Thus, in 2024 the exhibition was visited by 22,473 specialists from 77 constituent entities of the Russian Federation and 22 countries of the world. It is worth noting that 3,190 visitors were interested in the Embedded Systems section of the exhibition.

If your company is engaged in production or distribution of embedded systems, participation in the 27th International Electronics Exhibition ExpoElectronica (15-17 April 2025, Moscow, Crocus Expo IEC) will allow you to demonstrate your products to the target audience, expand business contacts and sales geography, find new partners and strengthen relations with existing ones.

Global Embedded Systems Market