Cyber-Physical System Market

Cyber-Physical System Market Outlook 2024 to 2034

The cyber-physical system (CPS) market is expected to record a market value of US$ 101.13 billion in 2024. It is a 21st-century innovation found anywhere, from everyday products to high-tech manufacturing tools. This system is a product of the Industry 4.0 revolution, which introduced the concept of smart factories in its wake. CPS’ use is also beneficial in real-time applications and optimizes performance in safety-critical applications.

The industry is forecast to expand at a CAGR of 7.8% in the ten-year time frame and reach a US$ 214.32 billion valuation by 2034.

Attributes	Key Insights
Cyber-Physical System Market Size (2024E)	US$ 101.13 billion
Industry Valuation (2034F)	US$ 214.32 billion
Value-based CAGR (2024 to 2034)	7.8%

Market Trends and Drivers Promoting the Adoption of Cyber-Physical Systems

Surging adoption of basic components of cyber-physical systems like memory units, sensors, storage devices, and monitoring devices computing units in many new sectors.

Energy and utility industries, in particular, are expected to spur substantial demand for cyber-physical systems due to their application in smart grid technology.

Cyber-physical systems have a crucial role in the development and optimization of autonomous cars and intelligent transportation systems. Increasing emphasis on raising the sales of electric vehicles is projected to fuel the demand for CPS for the creation of automated EVs.

Category-wise Cyber-Physical System Market Analysis

Embedded Security Systems is Predicted to Enjoy Wide Popularity

Embedded cyber-physical systems are slated to acquire a 38.4% share in 2024. Factors governing the rapid sales of this security type include reducing prices of networking devices and IoT sensors are boosting the adoption of in-built or embedded security systems.

Leading Security Segment	Embedded Security
Value Share (2024)	38.4%

Surging demand for cyber-physical embedded systems in EVs is further spurring the sales of cyber-physical systems in the automotive sector.

Automotive Segment is Predicted to Account for Higher Demand for Cyber-Physical Systems

The automotive sector is projected to register a 37.7% share of the total revenue generated in 2024. Additionally, the segment is anticipated to observe lucrative growth over the forecast period.

Leading End Use Vertical	Automotive
Value Share (2024)	37.7%

Rising demand for cyber-physical systems in Electronic Control Units (ECUs) in automotive is pushing the sales of cyber-physical systems. ECUs are increasingly deployed to control different mechanical subsystems like engines, brakes, steering, and suspension. This ensures maximum utilization of fuel or energy in automotives by discarding the use of surplus energy.

Global Cyber-Physical System Industry Demand Analysis by Country

Quantitative insights related to growth projections of cyber-physical systems in the top five countries point to an interesting future for industry vendors. Companies are expected to experience robust growth in the United States, China, Australia and New Zealand. The last one is on the radar of several firms due to higher growth prospects emerging in Australia and New Zealand.

Based on the proceeding table, it can be concluded that Asia Pacific, except Japan and North America, are going to be destination areas for leading providers of cyber-physical systems.

Countries	Forecast CAGR (2024 to 2034)
The United States	15.1%
Germany	3.3%
Japan	3.6%
China	14.5%
Australia and New Zealand	17%

Debut of Multidisciplinary Projects to Strengthen CPS is Fueling United States Market

The cyber-physical system market in the United States is flourishing at a 15.1% CAGR over the forecast period. Advanced infrastructure for the adoption of progressive technologies like artificial intelligence and IoT in several industries is building a conducive environment for the use of cyber-physical systems.

Significant presence of several world-renowned technology and IT companies, such as Microsoft, IBM, and others, in the United States is increasing the competitiveness of the industry.

Recently, success patterns have emerged for creating cyber-physical systems with Agile that are advancing the industry's growth. The market is expected to benefit from the launch of multidisciplinary projects to simulate, model, and analyze cyber-physical systems (CPS), to make these systems more robust and their analysis more effective and scalable. In April 2024, for instance, the Defense Award introduced the Purdue project to make cyber-physical systems stronger.

Industry 4.0 to Stir Demand for Cyber-security Systems in Germany

The demand for cyber-physical systems in Germany is increasing at a sluggish 3.3% CAGR during the forecast period. Despite the present maturity levels in Germany, the regional market is widely recognized as a prominent player in the whole of Europe.

The presence of developed infrastructure for automotive, manufacturing, energy, and utility sectors is increasing the adoption of cyber-physical systems in Germany.

Latest developments, such as the initiation of the Industry 4.0 project by the German government, are expected to improve the scope of cyber-physical systems in the country. IoT and cyber-physical systems form the technological base for this project.

Surging Risks to National Safety Elevating the Horizon of Cyber-physical Systems in China

In China, the cyber-physical system industry is projected to expand at a CAGR of 14.5% over the next ten years. The surging adoption of cyber-physical systems is fast replacing traditional industrial systems for streamlined integration of autonomous operations.

China’s leading position as a supplier and manufacturer of cyber-physical system hardware in the Asia Pacific is driven by the strong electronics manufacturing sector and low-cost labor availability.

Rising risks to national safety are further pushing cybersecurity experts and researchers to engage in an endless race to deal with digital vulnerabilities emerging in the private and public sectors.

Several Sectors in Japan to Observe Demand for Cyber-physical Systems

Demand for cyber-physical system solutions and services in Japan is expected to register a steady 3.6% CAGR during the studied period. Growing demand for cyber-physical system services in various sectors, such as smart grids, smart factories, smart healthcare, and a few other industries.

Robust presence of favorable policies, MNCs, and reputable supplier network supporting the CPS industry.

Australia and New Zealand Together are Emerging as an Opportunity Playground for Players

The cyber-physical system market in Australia and New Zealand is poised to offer a lucrative environment for players. The industry is expected to expand at a robust 17% CAGR over the stipulated period.

The continuous entry of international cyber-physical system vendors and manufacturers in these two countries is enhancing the industry’s growth prospects. Additionally, strong investment by the government to promote IR 4.0 and boost the application of other future-oriented technologies across different sectors is accelerating the use of CPS.

Competitive Analysis Of The Cyber-physical System Sector

Cyber-physical system sector is highly consolidated as few leading technology firms continue to wield their power over the global market. Several top manufacturers are heavily investing in research and development practices and product innovation to broaden the use cases of cyber-physical systems.

Research activities are also aimed at advancing core technologies like artificial intelligence (AI), the Internet of Things (IoT), and machine learning (ML). New players are attempting to accelerate their business transformation, facilitated by the latest technology, while increasing their customer base.

CPS vendors are collaborating with research institutions and solution providers to increase their industry share. This is resulting in faster development cycles, knowledge sharing, and integration of different platforms to provide comprehensive CPS solutions.

Latest Developments Uplifting the Cyber-Physical System Industry

• Dataminr, a United States-based AI company, declared in April 2023 that the Cyber-physical A2I Partner Coalition is going to be introduced at the coming RSA Conference. The coalition is aimed at creating and sharing best practices to help businesses utilize AI advancements to prepare for convergent cyber-physical threats quickly.
• DSIT, an abbreviation of the Department for Science, Innovation and Technology is offering resources for the setting up of the National Cyber-Physical Infrastructure (NCPI) ecosystem in the United Kingdom. The collaboration was made public in October 2023. It expands on the Cyber-physical Infrastructure Consultation that the United Kingdom government delivered in March 2022.

Enlisted Below are Leading Cyber-Physical System Players

• IBM Corporation
• Microsoft Corporation
• Dell EMC
• Broadcom Inc.
• Hewlett Packard Enterprise
• Schneider Electric
• SAP SE
• Honeywell International Inc.
• Hitachi Vantara
• Oracle
• Others

Market Segmentation of Cyber-Physical System

By Security:

Based on security, the industry is divided into embedded security, industrial control systems (ICS) security, robotic security, Internet of Things (IoT) security, and others

By Component:

By component, the industry is categorized into hardware, software, and services

By End Use Verticals:

Various end-use verticals that deploy cyber-physical systems are aerospace and defense, automotive, energy and utility, healthcare, manufacturing, consumer electronics, and others

By Region:

Industry analysis has been carried out in key countries of North America, Europe, Asia Pacific, Middle East and Africa, and Latin America

Frequently Asked Questions

How Much is the Cyber-physical System Industry Valued?

The industry is going to be worth US$ 101.13 billion in 2024.

What is the Projected Adoption Rate of Cyber-Physical Systems?

The current forecast projects a CAGR of 7.8% for the industry.

What is the Estimated Industry Size for 2034?

The industry to expected to reach US$ 214.32 billion by 2034.

Which End Use Verticals Hold a Significant Industry Share?

Automotive is a prominent end-use vertical in the market.

Which Countries Offer Growth Opportunities?

Australia and New Zealand are predicted to offer opportunities for investors.

Which Players in the Industry are Influential?

Dell EMC and Broadcom Inc. control significant market share.