Automotive Secure Element Chip Market TO Hit Valuation of US$ 2,091.82 Million By 2035 | Astute Analytica

Anchored by mandatory cybersecurity regulations, the market is pivoting toward mass adoption. Growth is fueled by software-defined vehicles requiring tamper-proof hardware to secure connectivity, digital keys, and automated driving systems against remote threats.

Chicago, Jan. 15, 2026 (GLOBE NEWSWIRE) — The global automotive secure element chip market size was valued at USD 475.89 million in 2025 and is projected to hit the market valuation of USD 2,091.82 million by 2035 at a CAGR of 15.98% during the forecast period 2026–2035.

The automotive secure element chip market is undergoing a critical transformation, evolving from a niche component sector into the foundational bedrock of the Software-Defined Vehicle (SDV) ecosystem. As vehicles transition into hyper-connected IoT nodes, hardware-based roots of trust have become non-negotiable for validating Over-The-Air (OTA) updates and securing vehicle-to-grid transactions. This surge is propelled by stringent global cybersecurity regulations, compelling OEMs to integrate tamper-proof vaults across mass-market fleets rather than just premium models.

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Geographically, the industry’s center of gravity has pivoted toward Asia’s high-volume manufacturing hubs, while Western markets drive innovation in privacy-compliant digital passports. The convergence of functional safety and cybersecurity is reshaping supply chains, with automakers increasingly bypassing Tier-1 suppliers to directly source encryption hardware. Ultimately, this market represents the digital shield protecting the financial and operational integrity of modern mobility against escalating remote threats.

Key Findings

• The Asia Pacific region commands the largest market share at 41% in 2025.
• In terms of component/chip type, the dedicated secure element chips category captured the top position with a 43.25% share in 2025.
• For vehicle type, passenger cars dominated the automotive secure element chip market, accounting for a 52% share in 2025.
• Regarding security application, the secure connectivity & telematics category topped the market with a 39.78% share in 2025.
• By technology, the hardware-only secure elements segment held the lead with a 54.89% share in 2025.
• In integration type, the embedded on-board secure elements category led the automotive secure element chip market at 61.56% share in 2025.
• Among end-users, OEMs secured the biggest portion of the market with a 67.33% share in 2025.
• For secure feature type, the encryption & authentication services segment took the forefront with a 40.22% share in 2025.
• By sales/distribution type, direct OEM contracts dominated the market, holding a 60% share in 2025

Passenger Cars Controlling 49.37% Market Share Driven by EV Plug and Charge Standards

The passenger car segment secured nearly half the automotive secure element chip market in 2025 due to the mass adoption of electric vehicles (EVs). The primary catalyst is the ISO 15118 standard. This “Plug & Charge” protocol eliminates the need for credit cards at charging stations. The car automatically identifies itself to the charger upon connection. This convenience relies entirely on robust encryption. The vehicle must store immutable digital certificates to authorize payments securely. Consequently, high-grade security chips became mandatory in mainstream EV architectures to prevent billing fraud.

Global charging initiatives accelerated growth in the automotive secure element chip market. Organizations like CharIN pushed for widespread ISO 15118 implementation across Europe and North America. Automakers such as Hyundai and Audi rolled out this feature in their 2025 volume models. They required dedicated security chips to handle the complex Public Key Infrastructure (PKI) processes. Furthermore, the Chinese market saw a surge in domestic EV production. Manufacturers like BYD integrated secure elements to support proprietary fast-charging ecosystems. The sheer volume of passenger EV production has effectively commoditized these components within the market.

Secure Connectivity and Telematics at 39.78% Market Share Anchored by V2X Authentication

Connectivity captured a massive slice of the automotive secure element chip market because of the deployment of Cellular Vehicle-to-Everything (C-V2X) technology. By 2025, smart city infrastructure began interacting directly with vehicles. Cars now communicate with traffic lights, road signs, and other vehicles to prevent accidents. This data stream requires instant authentication. A malicious actor could otherwise spoof a “ghost car” to cause chaos. Therefore, the telematics unit requires a hardware root of trust to verify every incoming and outgoing message.

Qualcomm Technologies dominated this space with their Snapdragon Digital Chassis. Their 2025 platform updates heavily emphasized the need for hardware-backed V2X security. Regional mandates also played a crucial role in the automotive secure element chip market. China’s extensive C-V2X rollout forced global suppliers to adopt rigorous authentication standards. In the West, the 5G Automotive Association (5GAA) highlighted that software-only security is insufficient for safety-critical communications. This consensus drove telematics suppliers to integrate discrete secure elements. These chips ensure that the vehicle’s communication identity cannot be cloned or hijacked.

Embedded On Board Elements Holding 61.56% Market Share Due to Manufacturing Efficiency

Embedded integration types dominated the automotive secure element chip market in 2025 because they streamline global logistics. Manufacturers no longer want to manage physical SIM cards for different regions. Embedded chips allow for “late-stage customization.” An OEM can solder a blank chip onto the circuit board during production. They can then remotely provision the network profile for the destination country later. This capability drastically reduces inventory complexity and costs.

Major semiconductor players facilitated this shift in the automotive secure element chip market. Thales reported a surge in demand for their embedded secure elements that support remote provisioning. Their solution allows carmakers to swap connectivity providers over the air without a vehicle recall. Additionally, the compact nature of Wafer Level Chip Scale Packages (WLCSP) saves critical space. Modern dashboard designs are densely packed with electronics. Engineers prioritize components that occupy the smallest footprint. Embedded elements eliminate the bulky connectors required for removable cards. This manufacturing efficiency makes embedded chips the default choice for automated assembly lines.

OEMs Commanding 67.33% Market Share to Enforce Digital Battery Passports

Original Equipment Manufacturers (OEMs) controlled the majority of the automotive secure element chip market to comply with the EU Battery Regulation. Fully enforceable in 2025, this law mandates a “Battery Passport” for all electric vehicles. This digital record tracks the battery’s origin, health, and recycled content. The data must be tied irrefutably to the physical battery pack. OEMs responded by embedding secure elements directly into the Battery Management System (BMS). This ensures the passport data cannot be tampered with by third-party repair shops.

This move also protects the OEM’s after-sales ecosystem. By securing the BMS, manufacturers prevent the installation of counterfeit or unsafe battery modules. Volvo Cars and BMW Group were early adopters of this architecture within the Catena-X automotive network. They utilized chips from the market to create a transparent, tamper-proof supply chain. The OEM effectively became the trust anchor for the vehicle’s most expensive component. This strategic control over battery data ensured their market dominance in chip procurement.

Surging Cyber Incidents Drive Automotive Secure Element Chip Market Demand

The market is witnessing unprecedented growth momentum fueled by a drastic escalation in cyber threats. Upstream Security archived a cumulative total of 1,877 automotive cyber incidents by the start of 2025. Specifically, 2024 saw 215 formally recorded incidents and the publication of 530 Common Vulnerabilities and Exposures (CVEs) related to vehicle systems. Such data highlights a volatile environment where 19 massive-scale incidents occurred in a single year. These massive attacks affected millions of assets simultaneously, proving that security is no longer optional.

Dealers and customers bore the brunt of these vulnerabilities, necessitating robust hardware security. A catastrophic ransomware attack on CDK Global in June 2024 paralyzed 15,000 North American dealerships. The industry faced an estimated direct economic loss of USD 1.02 billion during this event. Furthermore, 108 ransomware attacks targeted the wider ecosystem in 2024. Data privacy remains a critical concern as well. For instance, the Avis Rent a Car breach in August 2024 exposed the personal data of 299,006 customers. Consequently, the Automotive secure element chip market is expanding to mitigate these 214 reported data breach incidents and 409 distinct new cyber threats documented in 2024.

Global Regulations Enforce Mandatory Hardware Security Compliance Across Nations

Government mandates have become the primary catalyst propelling the Automotive secure element chip market forward. July 2024 marked the definitive deadline for UNECE R155 compliance regarding automotive Cybersecurity Management Systems (CSMS) for all new vehicle registrations. Currently, 54 countries enforce these strict homologation standards. Automakers must now adhere to 3-year audit cycles to maintain valid CSMS certification. Without this certification, selling vehicles in participating nations is impossible. Manufacturers are actively sourcing secure chips to meet these rigorous requirements before the 2029 deadline for extending cybersecurity rules to new motorcycles.

Two distinct regulations, R155 for CSMS and R156 for Software Update Management Systems (SUMS), are now fully active prerequisites for vehicle type approval. European mandates further tightened the net. July 7, 2024, was the specific enforcement date for the EU’s General Safety Regulation (GSR) II, which demands advanced safety features secured by tamper-proof chips. In the East, China officially implemented the “Vehicle-Road-Cloud Integration” pilot in 2024 to standardize domestic V2X security. These regulatory milestones ensure that the Automotive secure element chip market remains central to global automotive engineering strategies.

China Accelerates V2X Infrastructure Investment Boosting Chip Procurement Volumes

China is aggressively expanding its intelligent transport network, creating massive opportunities within the Automotive secure element chip market. In mid-2024, 20 cities were designated as pilot zones for the “Vehicle-Road-Cloud Integration” initiative. Authorities have established 17 national-level Intelligent Connected Vehicle (ICV) testing zones to date. Infrastructure development is keeping pace with these ambitious goals. By late 2024, China opened 32,000 kilometers of test roads specifically for intelligent connected vehicles.

Deployment of hardware on the ground is equally impressive. Operators deployed 8,700 Roadside Units (RSUs) across pilot regions to support C-V2X communication. Simultaneously, regulators issued 7,700 test licenses to intelligent vehicles in 2024 alone. These connected test vehicles accumulated a staggering 1.2 billion kilometers of testing mileage. Financial commitments underpin this growth. Beijing allocated 10 billion yuan in 2024 for new V2X infrastructure projects. Additionally, Wuhan approved 17 billion yuan for its own demonstration project. Such heavy investment solidifies the region’s dominance in the market.

Adoption of Digital Key Protocols Expands In Premium Vehicle Segments Across Automotive Secure Element Chip Market

Consumer convenience features are heavily reliant on the market for credential management. By mid-2025, 20 automotive brands supported the Apple Wallet digital key standard. June 2025 saw a significant surge, with 13 additional automotive manufacturers committing to support the Apple Car Key standard. The industry is rapidly standardizing around the CCC Digital Key Release 3.0 specification, which utilizes 3 distinct wireless protocols: NFC, BLE, and UWB.

New vehicle launches in 2025 confirm this trend toward secure access technologies. The 2025 model year Hyundai IONIQ 5 now features Digital Key 2 with UWB and NFC capabilities. Similarly, the 2025 Audi A5 and Q5 introduced UWB passive entry support. Premium adoption continues as the 2025 Mercedes-Benz E-Class integrates digital keys directly into the brand’s app. Furthermore, the 2025 Genesis GV80 model includes Digital Key 2 support. These integrations drive high-volume orders in the market to ensure encrypted communication between phones and cars.

Electric Vehicle Charging Networks Demand Robust Transaction Security Standards

The expansion of electric vehicle infrastructure is a critical vector for the Automotive secure element chip market. Global stock added 1.3 million public charging points in 2024. Europe leads this density, with the Netherlands operating 180,000 public charging points by late 2024. Germany followed closely with 160,000 operational points, while France recorded 155,000 points. The UK also saw growth, installing 20,000 new charge points in 2024 to reach a total of 73,699 active units.

Security is paramount as charging speeds and power levels increase. EU AFIR regulations now mandate a minimum 150 kW power output for fast-charging stations every 60km on TEN-T roads. To manage the financial transactions and grid communication for these high-power stations, the industry is deploying ISO 15118-20. This specific standard version enables secure bidirectional charging. Consequently, the Automotive secure element chip market is essential for authenticating Plug & Charge sessions, preventing energy theft, and securing the grid interface across millions of new charging points.

Financial Reports and Vulnerability Research Highlight Critical Security Valuation

Recent research underscores the financial stakes driving the Automotive secure element chip market. At the Pwn2Own Automotive 2025 contest in Tokyo, researchers exposed 49 unique zero-day vulnerabilities. Participants from 13 countries targeted 3 specific focus areas: IVI, EV Chargers, and Operating Systems. One single researcher, Cena, showcased 14 different vulnerabilities and won USD 200,000 for exposing these flaws. Such events highlight the necessity of hardware-based defense.

The cost of failure is astronomical. A single major dealership software attack in 2024 involved a ransom demand of USD 25 million. Conversely, robust security players remain financially healthy. NXP returned USD 570 million to shareholders in Q2 2024, demonstrating resilience. Future infrastructure also poses risks; EU charging pools target 600 kW output by 2027, creating high-value targets for hackers. Therefore, investment in the Automotive secure element chip market is a defensive financial strategy as much as a technical one.

Semiconductor Manufacturers Advance Process Nodes For Superior Encryption Speed

Technological innovation is reshaping the Automotive secure element chip market specifications. STMicroelectronics achieved a milestone in 2024 by certifying its new “Stellar” automotive microcontrollers on the 28nm process node. While the 40nm node remains a legacy standard, the industry is transitioning. Infineon is focusing its capacity expansion on 300mm wafer manufacturing to meet rising demand. These advancements allow for higher security standards.

Samsung’s new automotive eSE achieved the rigorous EAL6+ security certification level in 2025. Safety remains a priority, with ST’s Stellar MCUs achieving ISO 26262 ASIL D certification in early 2024. Performance gains are tangible; Samsung’s new chip demonstrated 18x faster cryptographic processing via hardware acceleration compared to software solutions. Furthermore, the S3SSE2A chip embeds 2 dedicated hardware accelerators for Post-Quantum Cryptography (PQC). These hardware specifications prove that the Automotive secure element chip market is evolving to handle complex, future-proof encryption tasks.

Remote Attacks and OTA Updates Necessitate Advanced Protection Layers

The nature of modern cyber threats forces a reliance on the Automotive secure element chip market. In 2024, 92% of automotive cyber incidents were executed remotely. Attackers no longer need physical access; 85% of attacks were classified as “long-range.” This shift places immense pressure on telematics units. Incidents involving telematics and application servers saw a jump of 43% to 66% from 2023 to 2024.

Supply chain weaknesses further complicate the landscape. VicOne’s 2025 report identified 1,564 supply chain vulnerabilities as top concerns. Additionally, analysts flagged 308 third-party integration vulnerabilities in 2024. The operational impact of these remote threats is severe, evidenced by the 3 weeks duration of the CDK dealership outage. As vehicles rely more on Over-The-Air (OTA) updates, secure elements are the only barrier against remote hijacking. Thus, the Automotive secure element chip market is vital for verifying the integrity of remote commands and software patches.

Strategic Corporate Investments Signal Massive Future Volume Growth

Leading players are making calculated moves to dominate the Automotive secure element chip market. NXP reported full-year revenue of USD 12.61 billion for 2024, with USD 3.13 billion specifically in Q2 2024. To strengthen connectivity, NXP invested USD 242.5 million to acquire Aviva Links in 2024. Additionally, the company acquired TTTech Auto in a transaction valued at USD 625 million. STMicroelectronics is also reshaping its manufacturing to achieve annual cost savings of USD 300 million to USD 360 million by 2027.

Infineon plans a substantial investment of 2.5 billion euros for 2025, primarily for its Dresden module. Although this represents a strategic 10% reduction in investment compared to the prior overheating year, the focus remains on high-value automotive components. Forecasts validate these strategies. Reports predict 30 million new V2X-enabled vehicles will enter Chinese roads annually by 2034. Moreover, 10 million vehicles across Europe, North America, and China will feature digital keys by 2030. These volumes guarantee a thriving Automotive secure element chip market.

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Automotive Secure Element Chip Market Major Players:

• Infineon Technologies
• Microchip
• NXP Semiconductors
• Panasonic
• Renesas
• Samsung
• Sony
• STMicroelectronics
• Texas
• Thales
• Other Prominent Players

Key Market Segmentation:

By Component/Chip Type

• Dedicated Secure Element (SE) Chips
• Trusted Platform Modules (TPMs)
• Embedded Hardware Security Modules
• Secure Microcontrollers (Secure MCUs)

By Vehicle Type

• Passenger Cars
• Light Commercial Vehicles (LCVs)
• Heavy Commercial Vehicles (HCVs)
• Electric Vehicles (EVs) & Hybrid Vehicles
• Autonomous Vehicles

By Security Application

• Secure Connectivity & Telematics
• Secure OTA Updates
• Digital Key & Vehicle Access
• Payment & In-Car Transactions
• V2X / V2G Communication Security
• Secure Data Storage & ECU Protection

By Technology

• Hardware-Only Secure Elements
• Hardware + Software Hybrid Secure Solutions
• Virtual Secure Elements
• Cloud-Connected Secure Element System

By Integration Type

• Embedded On-Board Secure Elements
• Removable/External Secure Elements
• Secure Ele/External Integrated Cryptography Engines

By End-User

• OEMs (Original Equipment Manufacturers)
• Tier-1 Automotive Suppliers
• Aftermarket/Retrofit Provider

By Security Feature

• Secure Boot & Firmware Integrity
• Secure Key Storage/HSM Functions
• Encryption & Authentication Services
• Anti-Tamper & Physical Protection
• Trusted Execution Environment (TEE) Support

By Sales/Distribution Channel

• Direct OEM Contracts
• Through Tier-1/Tier-2 Suppliers
• Aftermarket Distribution

By Region

• North America
• Europe
• Asia Pacific
• Middle East and Africa
• South America

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