The embedded systems market is entering one of its fastest periods of growth in decades. Demand for intelligent devices, connected infrastructure, and autonomous machines is accelerating across nearly every industry, from industrial automation to automotive electronics and agricultural machinery.
At the same time, embedded platforms are becoming more complex, more compact, and more intelligent, driven by edge-AI, sensor fusion, high-bandwidth connectivity, and strict security expectations.
A recent report from Fortune Business Insights valued the embedded systems market at $94.77 billion in 2022, predicting an expansion to $161.86 billion by 2030, growing at a 7.1% CAGR. North America alone accounted for more than $39 billion of the 2022 market.
This shift is not happening in isolation. It is being shaped by three converging forces:
- the rise of smart, connected devices,
- the growth of predictive maintenance and edge intelligence, and
- the increasing need for secure, upgradable systems.
Together, these forces are fundamentally reshaping how embedded systems are designed, developed, and deployed.
1. Smart IoT devices are driving massive embedded growth
Across industries, embedded intelligence is becoming the default expectation.
- Industrial automation depends on edge devices capable of real-time decision-making.
- Automotive systems require powerful domain controllers, electric-vehicle systems, and ADAS processors.
- Smart cities, smart grids and smart agriculture rely on distributed sensing, connectivity and robust embedded control.
- Drones, robots, and autonomous machines need high-performance processing and reliable communication links.
This demand extends to on-device machine learning and AI inference, where devices operate independently of the cloud. Instead of sending raw data off-site, modern embedded platforms filter, analyze, and act locally, improving latency, reliability, and privacy.
Meanwhile, connectivity standards are advancing rapidly. Industrial systems are already moving from 4G to 5G, with research toward 6G promising even lower latency and higher bandwidth. This enables new classes of edge devices capable of real-time coordination and remote control.
2. The rise of predictive maintenance and connected ecosystems
Predictive maintenance is now one of the most influential drivers of embedded growth. Industries with expensive equipment, manufacturing, logistics, energy, utilities, construction, agriculture are adopting embedded monitoring systems to minimize downtime and increase asset reliability.
These systems rely on:
- distributed sensor arrays
- edge processing and anomaly detection
- continuous wireless communication
- long-term data storage and analysis
Instead of “smart devices in isolation,” companies are building connected ecosystems, where multiple machines, sensors, and controllers interact autonomously. This requires embedded hardware that can run continuously for years, withstand harsh conditions, and support secure over-the-air (OTA) updates.
3. Growing device complexity in shrinking footprints
Embedded systems now range from ultra-simple microcontroller units (MCUs) to sophisticated multi-processor platforms with:
- DSPs
- FPGAs
- GPUs
- NPUs
- ASIC accelerators
- advanced connectivity modules
Automotive electronics, data centers, robotics platforms, and industrial controllers require heterogeneous compute architectures, sometimes within a footprint only marginally larger than a traditional MCU.
The industry is facing a central engineering challenge:
More performance, more functionality, more memory…
without increasing physical size.
To meet this demand, developers are shifting from discrete designs to compute modules, which provide:
- higher processing power
- more memory
- built-in AI acceleration
- scalable upgrade paths
- smaller and standardized footprints
4. The rise of compute modules and the importance of OSM
Compute modules are becoming the preferred approach for modern embedded design particularly those based on the Open Standard Module (OSM).
OSM provides:
- standardized footprints
- consistent pinouts
- solderable packages
- compatibility across multiple vendors
- simplified upgrades
OSM modules enable:
- faster product iteration
- reduced hardware risk
- simpler CPU replacement or performance upgrades
- automated manufacturing (tape-supply soldering)
- parallel hardware/software development
Engineers can begin firmware work on an OSM development kit while hardware is still in design dramatically reducing time to market.
As on-device AI becomes more common, and as embedded applications require more memory and better connectivity, the move toward module-based development will only accelerate.
5. Embedded systems will increasingly require continuous security
As embedded devices become more connected and more powerful, they also become more vulnerable. The days of “ship it and forget it” are over.
New regulations such as the European Cyber Resilience Act (CRA), introduced in 2024, place responsibility for security squarely on OEMs. Devices must support:
- regular updates
- vulnerability patching
- secure boot
- hardened firmware
- encrypted communication
- lifecycle security management
The United States is moving toward similar regulatory frameworks, and global alignment is expected.
This means embedded systems must be designed with the expectation that:
- cybersecurity updates will continue for years
- OTA updaters must be robust and safe
- suppliers must provide long-term software and security support
- hardware and firmware design must include threat modeling from day one
Security is no longer optional. It is now a central engineering requirement.
6. Looking ahead: a new era for embedded systems
The embedded market is entering a period of transformation.
Traditional sectors, industrial, automotive, medical, aerospace are returning to strong growth. At the same time, entirely new sectors are emerging, driven by:
- ubiquitous AI in edge devices
- autonomous robots and drones
- next-generation connectivity (5G/6G)
- sensor fusion and real-time analytics
- cybersecurity requirements
- high-performance modules and SoMs
This convergence will create enormous opportunities but also significant challenges. Embedded developers and OEMs will need to navigate increasing system complexity, security expectations, and rapid iteration cycles, all while delivering reliable, compact and cost-effective devices.
The companies that succeed will be those capable of uniting hardware engineering, embedded software, security architecture and long-term lifecycle support into a single coherent strategy.
At Detus, we see the embedded market entering its most innovative decade yet, and we aim to help companies build hardware and firmware systems that remain reliable, secure and scalable as this evolution accelerates.