HSM Market Growing at 10% CAGR to Hit $ 3.51Bn by 2031 as Hardware Security Models and Data Protection Mandates see Rising Adoption: Mordor Intelligence

HYDERABAD, India, Jan. 30, 2026 /PRNewswire/ -- According to Mordor Intelligence, the hardware security modules (HSM) market is experiencing accelerated expansion as enterprises prioritize cryptographic security, data protection, and regulatory compliance across digital ecosystems. The hardware security modules market size was valued at USD 1.98 billion in 2025 and is projected to grow from USD 2.18 billion in 2026 to USD 3.51 billion by 2031, registering a robust CAGR of 10.02% during the forecast period (2026–2031). 

This sustained hardware security modules market growth is driven by increasing adoption of cloud-based services, the rapid rise of digital payment infrastructure, and the expanding use of encryption technologies across industries. As cybersecurity threats evolve, organizations across BFSI, government, healthcare, and IT sectors are deploying hardware-based cryptographic solutions to safeguard sensitive data and ensure compliance with global security standards—reinforcing long-term hardware security modules market forecast momentum. 

Hardware Security Modules Market Trends Shaping Enterprise Security 

Instant Payments Driving Payment HSM Demand

The global shift toward instant payment systems is pushing payment processors to adopt faster and more resilient cryptographic infrastructure. Real-time settlement frameworks demand rapid transaction validation with no tolerance for delays, increasing reliance on dedicated payment-focused HSMs. At the same time, stronger authentication rules and compliance requirements are reinforcing the use of certified security appliances. Flexible, on-demand HSM models are gaining traction as payment volumes surge during peak transaction periods, supporting sustained adoption across high-frequency payment environments. 

Hyperscale Security Driving Regional Adoption 

Cloud hyperscale is rapidly strengthening their security stacks by embedding compliant, cloud-native key management directly into shared environments. This allows enterprises to retain full control over encryption keys while meeting local data sovereignty requirements. Growing regulatory pressure across Asia-Pacific, combined with rising digital banking adoption, is accelerating demand for managed HSM deployments. As cloud providers expand localized infrastructure and financial institutions to prioritize cryptographic independence, adoption across the region continues to gain momentum supporting sustained market expansion. 

Hardware Security Modules Market Segmentation Overview 

By Deployment Type 

• On-Premise 
• Cloud HSM 
• Hybrid HSM 

By Type 

• General Purpose HSM 
• Payment HSM 
• Cloud / Hosted HSM (HSM-as-a-Service) 
• USB / Portable HSM 
• PCIe-based HSM 
• Network-attached HSM 

By Application 

• Payment Processing 
• Key Management and KMS 
• SSL/TLS and Code Signing 
• PKI and Certificate Authorities 
• Blockchain and Cryptocurrency Custody 
• Database and Document Encryption 
• IoT / Edge Device Identity 
• Post-Quantum Cryptography Acceleration 

By End-User Vertical 

• BFSI 
• Government and Defense 
• Healthcare and Life Sciences 
• Retail and E-commerce 
• Telecommunications and IT 
• Industrial and Manufacturing 
• Energy and Utilities 
• Cloud Service Providers 
• Others 

By Geography 

• North America 
  • United States 
  • Canada 
  • Mexico 
• South America 
  • Brazil 
  • Argentina 
  • Rest of South America 
• Europe 
  • United Kingdom 
  • Germany 
  • France 
  • Italy 
  • Spain 
  • Rest of Europe 
• Asia-Pacific 
  • China 
  • Japan 
  • India 
  • South Korea 
  • ASEAN 
  • Australia 
  • New Zealand 
  • Rest of Asia-Pacific 
• Middle East and Africa 
  • Middle East 
  • GCC 
  • Turkey 
  • Israel 
  • Rest of Middle East 
• Africa 
• • South Africa 
  • Nigeria 
  • Egypt 
  • Rest of Africa 

For a full breakdown of market size, segmentation data, and competitive intelligence, access all details of the Mordor Intelligence report: https://www.mordorintelligence.com/industry-reports/hardware-security-modules-market?utm_source=prnewswire 

Hardware Security Modules Market Regional Analysis 

North America continues to see steady adoption of hardware-based cryptographic security, supported by early regulatory alignment, frequent technology refresh cycles among payment providers, and sustained public-sector modernization efforts. Financial institutions and government agencies across the region are prioritizing secure key storage as part of broader zero-trust and digital transformation initiatives, reinforcing consistent demand for advanced HSM solutions. 

Asia-Pacific is emerging as the fastest-moving region, driven by rapid cloud infrastructure expansion, rising digital banking activity, and stricter data-sovereignty requirements. Regulatory mandates around local key control, combined with growing use cases in connected devices and real-time payments, are encouraging enterprises and financial institutions to deploy region-specific HSM environments accelerating adoption across both mature and emerging markets. 

Hardware Security Modules Market Key Players 

The hardware security modules market is moderately consolidated, with leading vendors focusing on product innovation, cloud integrations, and compliance-driven solutions. Key players profiled by Mordor Intelligence include: 

• Thales Group 
• Utimaco Management Services GmbH 
• Entrust Corporation 
• IBM Corporation 
• Hewlett Packard Enterprise (HPE) 
• Eviden SA (Atos Group) 
• Futurex 
• Amazon Web Services (AWS) 
• Microsoft Azure Dedicated HSM 
• Yubico 
• And Others 

Competition within the hardware security modules industry is intensifying as vendors expand cloud-native HSM offerings and address evolving enterprise security requirements. 

Check out related reports published by Mordor Intelligence: 

RFID Market Report: The global RFID market was valued at USD 16.73 billion in 2025 and is gaining strong momentum, with the market estimated to grow to USD 18.66 billion in 2026 and further expand to USD 32.19 billion by 2031, registering a robust CAGR of 11.52% during 2026–2031. This growth is driven by rising adoption of RFID across retail, logistics, healthcare, and manufacturing for real-time tracking, inventory optimization, and supply chain visibility, along with increasing integration of RFID with IoT platforms and automation systems. 

Facial Recognition Market Growth: The facial recognition market is experiencing accelerated expansion, growing from USD 8.58 billion in 2025 to USD 9.95 billion in 2026 and projected to reach USD 20.88 billion by 2031, at a CAGR of 15.97% over the forecast period. Market growth is fueled by rising demand for contactless authentication, increasing deployment in surveillance and security systems, rapid adoption in smartphones and consumer electronics, and growing use of AI-powered biometric solutions across government, BFSI, and smart city initiatives. 

Panasonic Corporation, Thales Group, Cognitec Systems GmbH, Aware, Inc., NEC Corporation are the major companies operating in this market.  

Read more about companies active in the facial recognition market: https://www.mordorintelligence.com/industry-reports/facial-recognition-market/companies?utm_source=prnewswire 

Critical Infrastructure Protection Market Growth Outlook: The critical infrastructure protection market is estimated to reach USD 160.15 billion in 2026, up from USD 154.32 billion in 2025, and is forecast to grow to USD 192.8 billion by 2031, reflecting a steady CAGR of 3.78% during 2026–2031. Growth is supported by rising cyber and physical security threats, increased investments in national security, modernization of energy and transportation networks, and the growing need to safeguard digital and physical assets across utilities, defense, and public infrastructure sectors. 

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