The global innovation is constantly getting driven by information technology (IT), which is modifying the digital space. The latest entrant that has created a buzz across the world is the Internet of Things (IoT). It represents a vision which is extending the internet into the real world, and its growing application is directly making a mark on the embedded system market. IoT's network design and architecture are constantly accelerating embedded system architecture for bringing further variations which are all set to advance the embedded system market in the next years. Major market players are constantly intrigued by IoT and readily investing in it, and thus, embedded system market is expanding. In 2016, Microsoft and Rolls-Royce announced their collaboration to support Rolls-Royce intelligent engines and offer 'advanced operational intelligence to airlines', which would extensively heighten the demand embedded system, creating opportunities for the end-user vendors of embedded system market.
Furthermore, Rolls-Royce will integrate Microsoft Cortana Intelligence Suite and Azure IoT Suite to collect information regarding a flight's maintenance, fuel usage, and operations. These will create a demand influx on the embedded system market, as this application-specific system designed with a combination of hardware and software are designed for a specific function and fitted within a system. The need for smart manufacturing in the future across several industries like automobile, automation, electronics, healthcare, and others are adding to the development of the embedded system market. In 2018, Embedded System Market rested on revenue of $85.5 billion. The market is estimated to grow at a CAGR of 6.7%, over the forecast period of 2019-2025.
As per the reports of the International Trade Centre (ITC), the global trade value of electronic integrated circuits and parts was estimated at around $858.41 billion by the end of 2018. The trade value experienced an annual growth of 15% in 2017-2018. These statistics shows that a substantial part of this trade value is attributable to the global embedded system market growth.
Global Embedded System Market Size Dominated by APAC:
Experimentation and improvement to offer energy efficient and smarter electronic gadgets will bring many possibilities to the embedded system market vendors. Embedded systems coupled with embedded graphics and multi-core technologies are becoming the main motivators in sectors such as IT, smart city, aeronautics, automation, and others, which will bolster the expansion of the embedded system market in APAC.
· The Digital Thailand Plan to Intensify APAC Embedded System Market Revenue –
Strong business rebound and resilient household consumption are creating huge demand for technological discoveries. This has made digitalization an unavoidable component of modern life. A report of the National Statistical Office of Thailand stated that many people lacked the access or skills to use new technologies, as they didn't know about the internet. To recover from this situation, the government of Thailand has initiated the digital Thailand plan, which aims to develop the use of digital technologies in all socio-economic enterprises over a course of 20 years. Thailand government has deployed initiatives such as five-year Digital Government Development Plan and an operational plan to promote the digital economy. Furthermore, by 2018, Thailand planned to establish a digital park in the Chon Buri province. These implementations extensively need the usage of embedded system, as this integrated circuit is built at the heart of the product that is generally processed to carry out computation for real-time operations. Therefore, with the digitalization of Thailand, embedded system market of APAC will flourish in coming years.
· The Second Affiliated Hospital of the Zhejiang University School of Medicine (SAHZU) to Create an Impact on the Embedded System market –
Emerging technological innovation hubs in China has driven the research and development of Transcatheter Aortic Valve Replacement (TAVR). This treatment to treat patients with aortic stenosis has given rise to a Second Affiliated Hospital of the Zhejiang University School of Medicine (SAHZU). To further promote the application of basic research, a research area of 25,000 square meters is being made which would include many research medical equipment. Embedded system is used for electronic stethoscopes to amplify sounds, vital signs monitoring, and other medical imaging such as MRI, CT, PET, and SPECT for internal inspections. With the development of this research center, the embedded system is going to boost in the APAC region.
· Embedded System Market Growth to get propelled by India's Aim for a Smart City –
The digital space has observed radical transformations in the last few years. The government has started introducing initiatives to promote the development of smart cities in India. From intelligent transportation management in Pune, Kahn riverfront development in Indore to renovating open spaces in NDMC, building 'all abilities' children park in Vishakhapatnam and paving mart street bench in Coimbatore, the government is doing all to make it a smart cities and to expand IoT in the country. Furthermore, the Indian government aims to install 50 million smart electric meters by 2020. With implementation of India's smart city plans, the APAC embedded system market vendors will record high revenue in the upcoming years.
· Japan's Record Population Fall to Benefit APAC's Embedded System Market Players –
As per the reports of the International Monetary Fund, Japan observed a fall in population size of around 264,000 people in 2017. Some analysts hint that nearly one-third of Japanese citizens were older than 65, and this number is expected to rise to nearly 40% by 2050. Japan's domestic labor force is estimated to decrease faster than the population and will drop by some 24 million between now and 2050. These disquieting statistics hint at the expanding robot production industry of Japan. The country had exported around $1.6 billion worth of industrial robots in 2016 and is going to expand further to meet this shrinking labor force for the next years. Embedded system is frequently used in industrial machines including robots to do several needed outputs. Thus, increasing robots in Japan is going to contribute directly to the growth of the embedded system market.
Embedded System Market: Key Application
The key application of the embedded system is found in the automotive industry. Embedded hardware or software systems regulate innovative purposes in vehicles, support and serve the driver, and obtain new traits for knowledge and entertainment. An automobile consist of embedded systems in black box, adaptive cruise control, airbags, anti-lock braking system, telematics, emission control, traction control, automatic parking, and others. According to reports of Advancing Public Transport, in March 2018, automated metros reached the 1,000km milestone with the opening of the Pujiang Line in Shanghai. By 2023, the number of automated metro km across the globe is expected to triple and China will take most of the share. On the other hand, just like China declared a 100 km long highway with lanes which would only serve for autonomous and semi-autonomous vehicles (AVs) by 2020. In 2018, India has also initiated a similar project. Indian Government has created 10km long cycle track, which is 5 meters wide that would integrate BRTS, electric vehicles, and public bikes. Moreover, the global autonomous and semi-autonomous vehicles market is estimated to rise at a CAGR of 31.28%, during the forecast period 2019-2025. All these data add up to the growth of the automobile industry, across the world which would drive the global embedded system market. The implementation of an embedded system in the automotive industry is expected to grow at a CAGR of 7.4% throughout 2025.
Embedded System Market Growth Drivers
Embedded system was first widely used when microcontrollers were designed. Since then it is being immensely used in machine control utilization as well as multifarious new sectors. These systems are now provided with customizable rich characteristics and are thus gaining prominence worldwide.
· Semiconductor Industry to Help in the Upliftment of the Embedded System Market –
Embedded vision technology of the embedded system is used for metrology functions and essential inspection for the manufacturing of semiconductors. The semiconductors market collected a revenue avenue of around $420 billion to $430 billion in 2018, and is further expected to grow at a CAGR of 10% to 12%, during the forecast period 2019-2025. Hence, with the expansion of the semiconductors industry, embedded system market vendors will be profited.
· 5G Value Chain to reap off unimaginable revenues to the Embedded System Market –
Progressing requirements from consumers and tough pricing competition are currently affecting the telecommunication industry. As per the reports of Global System for Mobile Communications (GSMA), 700 million new people will subscribe to mobile by 2025, and the number of global IoT connections will triple to 25 billion by the end of 2025. As per the reports of the World Economic Forum, 5G business will provide a potential value of $100 billion globally for operators by 2026. Be it the telephone switched for the network or the cell phones, the embedded system is found in various verticals of telecommunication. The rising telecommunication market will drive the embedded market growth in the upcoming years.
· Augmented Reality (AR) and Virtual Reality (VR) Industry to Boost the Embedded System Market –
AR and VR tools, which extensively use embedded system for advanced functioning, inhibits the confinement of human physical possibilities and relishes one’s quest for all sorts of endeavors. Augmented reality market and virtual reality market rested at around $11 billion - $13 billion in 2018 and is estimated to progress at a CAGR of 35%-38%, during the forecast period 2019-2025. Henceforth, the global embedded system market is also going to flourish in the next years.
Embedded System Market: Competitive Landscape
The major market forces who are currently holding maximum shares in the embedded system market are Intel Corporation (U.S.), Infineon Technologies AG (Germany), Renesas Electronics Corporation (Japan), Texas Instruments Incorporated (U.S.), Microchip Technology Incorporated (U.S.), STMicroelectronics N.V. (Switzerland), Qualcomm Technologies Incorporated (U.S.), Cypress Semiconductor Corporation (U.S.), Analog Devices Inc. (U.S.), Broadcom Limited (U.S.), Fujitsu Limited (Japan), NXP Semiconductors N.V. (Netherlands), and Toshiba Corporation (Japan).
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