Opportunities and Challenges in Embedded Technology Market Today

Samrat Pradhan (Correspondent) | Tuesday, 21 July 2020

According to MarketsAndMarkets report, the global embedded system market is USD 86.5 billion in 2020 and is expected to reach USD 116.2 billion by 2025, growing at a CAGR of 6.1% from 2020 to 2025.

The factors fuelling the growth for this market can be attributed to rise in the demand for electromobility solutions for hybrid vehicles and electric vehicles, portable devices such as wearables, and advanced driver-assistance systems (ADAS), among others.

The embedded market includes major Tier 1 and 2 manufacturers that includes Intel Corporation, Texas Instruments, Microchip Technology Inc., Qualcomm Corporation, Renesas Electronics, NXP Semiconductors, Cypress Semiconductor, among others. While, ehe embedded software solutions and hardware components manufactured by these aforementioned companies are being used by consumer devices, aerospace and defense, healthcare, communication, automotive and other industrial manufacturers.

Challenges

COVID-19 putting a halt in the growth of Embedded Devices
With the onset of COVID-19, it has not only impacted the operations of the industries offering various embedded components and solutions, but also affected the businesses of the companies using these products and solutions. For instance, the low demand for consumer electronic devices due to lockdown had a global impact on the semiconductor market. Also, it has been expected that the continuous fall in the global demand and export shipments for automotive vehicles will negatively impact the semiconductor market, which will eventually slow down the demand for embedded systems.

High Energy Consumption
Due to the compact design of the embedded devices, it would lead to the complexity in their design architectures when it comes to incorporating various functionalities.
Also, with the increase in the temperature of the device, the rate of energy consumption would also increase. Therefore, this would affect the overall performance of the embedded system and would directly affect the growth of the embedded system market.

Opportunities

Healthcare Industry aiding the Growth of Embedded Devices
One industry which has been seeing a positive growth even in these times of pandemic is the healthcare industry. For instance, the need for ventilators and other advanced medical equipment has seen a significant surge all across the world. Similarly, these would bring a positive impact on the embedded system market as various embedded hardware components are used in the development of medical equipment which include medical robots and advanced ventilators.

Increase in the demand for ADAS in EV and Hybrid vehicles
One segment where embedded systems are playing a major role is the automotive industry where it has been playing a significant role in redesigning the automotive industry altogether .

Embedded systems are being used in ADAS technology which are incorporated in the electric and hybrid vehicles. Owing to the growing awareness among masses about the depleting state of environment, there has been an increase in the demand for electric and hybrid vehicles, hence leading to the growth of the embedded system market.

If we look at the Bloomberg New Energy Finance report, sales of electric vehicles is estimated to reach 41 million by 2020, thereby leading to a rise in the demand for electronic components which includes embedded hardware and software used in electric vehicles.

Development of 5G based Embedded Devices
Dawn of 56 will open new opportunities for the embedded system market. ANd, if we look at the GSMA report, the 5G market is expected to contribute USD 2.2 trillion to the global economy by 2034, comprising 5.3 percent of the global GDP growth.

Hence, the development of embedded devices which are based on 5G architecture is expected to significantly grow in the coming future. For instance, embedded devices integrated with smart camera surveillance in vehicles would deliver faster response rates due to the integration of 5G technology. Thus, embedded systems which support 5G infrastructure is expected to surge the growth of the embedded system market.