Embedded Computer Market

Embedded Computer Market Size and Share:

The global embedded computer market size was valued at USD 49.68 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 91.41 Billion by 2033, exhibiting a CAGR of 6.66% from 2025-2033. North America currently dominates the market, holding a market share of over 38.2% in 2024. The market is experiencing significant growth mainly driven by the rising demand for automation across industries, advancements in IoT technology, and the rising need for real-time data processing. Key sectors, including automotive, healthcare, and industrial automation, are also contributing positively to the market growth.

The embedded computer market is expanding due to increasing automation across industries, rising demand for edge computing, and advancements in artificial intelligence. Sectors such as industrial automation, healthcare, automotive, and aerospace are driving adoption, leveraging embedded systems for real-time processing, efficiency, and reliability. The growing need for IoT-enabled solutions and low-power computing devices is further fueling market growth. Embedded computer market share is increasing as technological advancements in processors, memory, and connectivity solutions improve system performance, enabling faster data processing and seamless integration with cloud and AI platforms. Government regulations on cybersecurity and energy efficiency are also influencing product development, encouraging manufacturers to enhance system security and power optimization.

In the United States, the embedded computer market is driven by strong investments in defense, healthcare, and industrial automation. The country’s leadership in semiconductor innovation, coupled with growing demand for high-performance computing in aerospace, automotive, and telecommunications, is accelerating market expansion. Government initiatives supporting domestic semiconductor production and R&D funding for AI and IoT applications further strengthen industry growth. For instance, in November 2024, the U.S. government announced up to USD 300 Million for advanced semiconductor packaging research in Georgia, California, and Arizona. This investment supports U.S. semiconductor innovation, strengthens computer manufacturing, and enhances advanced packaging for AI, wireless communication, and power electronics. Furthermore, rising cybersecurity concerns and stringent regulatory standards are prompting companies to develop more secure and resilient embedded computing solutions. 

Embedded Computer Market Trends:

Integration of AI And Machine Learning

The integration of AI and machine learning (ML) into embedded systems significantly enhances their functionality and efficiency, allowing for smarter applications in diverse industries. By incorporating AI and ML algorithms, embedded devices can analyze data in real time, make informed decisions, and adapt to changing conditions autonomously. This capability is particularly beneficial in sectors, such as automotive, healthcare, and industrial automation, where predictive maintenance, advanced diagnostics, and intelligent automation are critical. Furthermore, the ability to process complex data locally reduces latency and bandwidth usage, resulting in improved performance and user experience. This trend is reshaping the landscape of embedded computing. For instance, in June 2024, Connection announced its partnership with Microsoft, Qualcomm, and other leading OEM partners to introduce Copilot+ PCs, a new generation of Windows-based devices designed for AI workloads. These PCs, powered by advanced system architecture and onboard Neural Processing Units, promise a 100 more efficient AI experience as compared to previous-generation devices.

Deployment of 5G Technology

The deployment of 5G technology is revolutionizing telecommunications by requiring advanced embedded solutions to meet its demands for enhanced connectivity, low latency, and increased bandwidth. An industry report indicated that the estimated global market value of 5G technology services reached USD 83.24 billion in 2021. Embedded systems play a crucial role in managing and optimizing the performance of 5G networks, enabling seamless communication between devices. These systems are essential for processing vast amounts of data generated by connected devices, facilitating real-time applications such as smart cities, autonomous vehicles, and augmented reality. As 5G continues to expand, the need for robust, reliable embedded solutions will grow, driving innovation and enabling new use cases across various industries, ultimately transforming how we connect and communicate. According to the embedded computer market forecast, the ongoing expansion of 5G technology is expected to significantly boost the demand for embedded systems, leading to substantial market growth and the development of innovative applications across multiple sectors. For instance, in July 2024, Kontron, a global provider of IoT and Embedded Computing Technology (ECT), partnered with Amarisoft to offer off-the-shelf private 5G solutions for defense and security sectors. This collaboration integrates Kontron’s rugged Edge platform with Amarisoft’s software, ensuring reliable connectivity in challenging environments. The solution aims to reduce operational costs and simplify deployment for various industries.

Rising Shift Toward Edge Computing

An industry report indicates that the global edge computing market is anticipated to hit USD 350 billion by 2027. The shift towards edge computing is transforming data processing by enabling computation to occur closer to the source of data generation. This paradigm reduces latency and bandwidth usage, as data doesn't need to travel long distances to centralized cloud servers for analysis. Embedded systems are pivotal in this model, as they facilitate real-time data processing and decision-making at the edge. Industries, such as manufacturing, healthcare, and smart cities, benefit from faster response times and improved operational efficiency. By integrating embedded solutions with edge computing, organizations can leverage actionable insights instantly, driving innovation and enhancing the functionality of connected devices. This shift toward edge computing is driving the embedded computer market growth by increasing the demand for efficient, high-performance systems that are capable of handling real-time data processing. For instance, in February 2024, Advantech emphasized its focus on edge evolution and partnerships at the World Partner Conference. The company plans to target emerging application industries such as green energy, robotics, and EV infrastructure, collaborating with industry giants like Intel, AMD, and Microsoft Azure Open AI. Advantech's products, including the EI-52 edge intelligence system, have achieved Microsoft's "Azure Certified Device" and "Edge Managed" certifications, showcasing their advanced capabilities in edge computing and AI inference acceleration.

Embedded Computer Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global embedded computer market, along with forecast at the global, regional, and country levels from 2025-2033. The market has been categorized based on component type and end use industry.

Analysis by Component Type:

• Software
• Hardware
  • Microprocessors
  • Microcontrollers
  • Digital Signal Processors
  • Others

Hardware leads the market with around 53.6% of market share in 2024, due to its critical role in system functionality. Embedded hardware includes processors, microcontrollers, and boards designed for specific applications like industrial automation, automotive, and healthcare. The demand for more powerful and energy-efficient hardware solutions is rising as industries move toward advanced technologies, such as IoT, AI, and edge computing. Additionally, the growth of industries like aerospace and defense, where reliable and rugged embedded systems are essential, further propels the hardware demand. With technological advancements, miniaturization, and the need for robust computing in harsh environments, the hardware segment is expected to maintain its dominant position, thereby driving innovation and market expansion. These factors, including the rising demand for advanced technologies, miniaturization, and the need for reliable hardware in various industries, are creating a positive embedded computer market outlook. The hardware segment is set to remain at the forefront of innovation, ensuring continued growth and expansion across multiple sectors.

Analysis by End Use Industry:

• Automotive/Transportation
• Industrial Automation
• Information and Communication Technology
• Healthcare
• Utilities
• Others

The segment holds the largest share of the embedded computer market due to its integral role in powering modern communication and data transfer systems. Embedded computers are crucial in devices, such as routers, switches, and network infrastructure, that support internet connectivity and telecommunications. As the demand for high-speed data, 5G technology, and cloud computing grows, the need for robust embedded systems within ICT infrastructure continues to rise. Moreover, the proliferation of smart devices, IoT, and edge computing further drives the demand for reliable, energy-efficient embedded systems. For instance, in August 2024, Infosys and Nvidia announced that they have expanded their partnership to develop GenAI-powered solutions for telecom operators. Infosys has created three generative AI solutions using Nvidia technology to enhance telcos' productivity, network efficiency, and customer service. These solutions have demonstrated significant improvements in latency and accuracy, providing a promising outlook for the future of AI in the telecommunications industry. These advancements and partnerships are expected to increase embedded computer market value by enhancing the capabilities and efficiency of telecommunications infrastructure. The integration of generative AI solutions not only improves operational performance but also drives innovation in service delivery, making embedded systems more critical in supporting next-generation communication networks.

Regional Analysis:

• North America
  • United States
  • Canada
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa

In 2024, North America accounted for the largest market share of over 38.2%. The region is accounting for the largest share due to its advanced technological infrastructure and strong presence in industries, such as aerospace, defense, automotive, and healthcare. The region's focus on innovation, particularly in emerging technologies like IoT, AI, and 5G, drives the demand for embedded computers in various applications. According to the embedded computer market overview, the region is positioned for sustained growth, driven by continuous technological advancements and the increasing demand across multiple sectors. Major companies in the U.S. and Canada invest heavily in research and development (R&D), fueling advancements in hardware and software for embedded systems. Additionally, North America's well-established industrial automation and smart manufacturing sectors rely on embedded solutions for enhanced operational efficiency. With government support for technology-driven initiatives and the rapid adoption of cutting-edge technologies, North America is expected to maintain its leadership in the global embedded computer market. For instance, in August 2024, Silicon Labs delivered five keynotes at Works With 2024 and Embedded World North America, focusing on the convergence of AI and IoT. The company also hosted regional, in-person events in San Jose, Hyderabad, and Shanghai, providing insights on IoT trends and technologies. Silicon Labs' CEO and CTO discussed the transformative future of embedded systems at the inaugural Embedded World North America event in Austin, urging the industry to prepare for rapid advancements in AI and ML. These developments and initiatives are driving the embedded computer demand by highlighting the critical intersection of AI, IoT, and advanced embedded systems.

Key Regional Takeaways:
 

United States Embedded Computer Market Analysis

The U.S. dominance in high-end technology areas like the aerospace, defence, healthcare, and automotive sectors drives the market for embedded computers in the country. According to US defense data, an annual budget exceeding USD 800 Billion is allotted by the US defence industry that significantly uses embedded computers in missile guidance systems and unmanned aerial vehicles. The need for embedded computers in wearable technology, diagnostics, and medical imaging systems is driven by the healthcare industry, where the healthcare spending is expected to account for around 20% of GDP by 2030, as per reports. Furthermore, embedded computers are being used more and more in the automotive sector, which manufactures about 17 million cars a year as per reports, for autonomous driving and electric vehicle (EV) systems. The industrial automation industry has also been imperative to the rise of U.S. manufacturing output with the advancement of smart systems driven by embedded computers. Secondly, federal programs such as CHIPS Act with more than USD 50 Billion allocated in reports for funding domestic semiconductor manufacturing improve the supply chain for components of embedded computing, thereby helping in innovation and localized production.

Europe Embedded Computer Market Analysis

Developments in industrial automation, renewable energy, and the automotive sector are pushing the embedded computer market in Europe. The use of embedded computers in robots and smart manufacturing systems is encouraged by the European Union's significant focus on Industry 4.0 technology, with France and Germany leading the way. The automotive industry in Europe, producing more than 15 million automobiles a year, according to reports, is largely dependent on embedded computers in advanced driver-assistance systems (ADAS), connected cars, and electric vehicles (EVs). Another significant driver in the field is the renewable energy sector, in which embedded computers are crucial for grid integration and energy management. Near 40% of European electricity is reported to be consumed from renewable resources according to data on the European Council that calls for implementing high-end embedded technologies for dependence and efficiency in Europe. Meanwhile, the EU Digital Decade strategy that aims for 75 percent of businesses deploying cloud services, big data analytics or other digital data sources by the year 2030 also positively impacts the sale of embedded computers, according to data on European Commission. This is because of the growing edge computing and Internet of Things technology need.

Asia Pacific Embedded Computer Market Analysis

Asia-Pacific is the largest and the fastest-growing region that holds a maximum domination in consumer electronics, industrial automation, and automobile production which determines the emerging needs of the embedded computer market. The major producers of semiconductors are China, Japan, and South Korea; in fact, China accounts for more than 35% of the world's electronics output, according to Semiconductor Industry Association data. Electronic and automotive industries in the region, responsible for producing more than half of all automobiles worldwide, implement infotainment systems, autonomous driving technologies, and embedded computers within EVs. The fast industrialization and IoT adoption in countries like Southeast Asia and India also fuel the need for embedded computers in manufacturing and smart city initiatives. Moreover, the demand for embedded computer components is greatly influenced by the consumer electronics sector in the region, which ships more than 1.4 billion smartphones annually as per reports. Government programs such as India's "Digital India" and China's "Made in China 2025" promote local production and innovation of embedded systems.

Latin America Embedded Computer Market Analysis

Embedded computers market is driven by increasing adoption of the Internet of Things in manufacturing, energy, and agriculture sectors. Precision farming techniques are becoming popular in countries like Brazil and Argentina, where embedded computers are used in smart sensors and automated irrigation systems. In order to enhance productivity, the manufacturing sector in countries like Brazil and Mexico also uses robotics and embedded computers in assembly lines. Renewable energy in the region is growing fast, particularly wind and solar power, and there is an imperative role for embedded systems in managing grids and storing energy. In Latin America, where e-commerce has a growth rate of more than 20% annually according to reports, there is increased demand for embedded systems in logistics and supply chain solutions.

Middle East and Africa Embedded Computer Market Analysis

The main drivers for the embedded computer market in the Middle East and Africa (MEA) region are investments in smart infrastructure, automotive development, and renewable energy projects. Some of the notable smart city projects like NEOM that combine embedded computers and IoT technology are being led by Gulf nations such as Saudi Arabia and the United Arab Emirates. With over 500,000 units for every year according to reports, most of which are embedding technology, the motor vehicle industry in this country, much more in South Africa, expands the embedded market. Additionally, the communication device embedded market is developed by the growing telecommunications infrastructure in the region, developed further by Sub-Saharan Africa's 40% expanding mobile internet penetration rate.

Competitive Landscape:

The embedded computer market is highly competitive, driven by technological advancements and demand for efficient computing in industrial, automotive, and consumer applications. Key factors include the development of robust, compact designs, improved processing power, and energy efficiency. Embedded computer companies are focusing on integrating cutting-edge technologies like AI and IoT into embedded systems to offer tailored solutions for automation, real-time data processing, and enhanced security. The embedded computer market is also witnessing an increased demand for rugged, durable systems capable of withstanding harsh environments in industrial settings and remote locations. Companies are investing in research and development to enhance system performance while maintaining energy efficiency and compact form factors. Market players differentiate themselves through product customization, reliability, and the ability to meet stringent industry standards across various sectors, leading to innovation-led competition. For instance, in December 2024, Virtium acquired Embedded Artists AB to expand in edge computing, AI, and industrial computing. This enhances its portfolio with advanced modules, offering industrial OEMs scalable, reliable, and cost-effective solutions for embedded system development. The continuous innovation in technology, coupled with the rising demand for durable and high-performance systems, is anticipated to drive revenue growth in the embedded computer market in the near future.

The report provides a comprehensive analysis of the competitive landscape in the embedded computer market with detailed profiles of all major companies, including:

• Advantech Co., Ltd.
• Arm Limited
• Fujitsu Limited
• Intel Corporation
• International Business Machines Corporation
• Microchip Technology Inc.
• Microsoft Corporation
• Qualcomm Incorporated
• Renesas Electronics Corporation
• Texas Instruments Incorporated

Latest News and Developments:

• September 2024: AAEON and The Embedded Kit formed a strategic partnership to offer a fully integrated hardware/software bundle for industrial companies. This collaboration aims to simplify the development process by providing a comprehensive solution that accelerates time-to-market, ensures cybersecurity compliance, and offers long-term viability.
• July 2024: Velasea and Cincoze announced a strategic partnership to develop Cincoze Industrial PCs for automation and computer vision applications. The collaboration aims to create high-performing solutions for manufacturing, railway, in-vehicle, warehouse and logistics, energy, and security and surveillance industries. Velasea's expertise in OEM services will enhance Cincoze's rugged PCs designed for harsh environments. The partnership is expected to set a new standard for industrial automation and computer vision systems.

Embedded Computer Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the embedded computer market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global embedded computer market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the embedded computer industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.