May 29, 2024

Quantum Key Distribution Market Is Driven By Growing Cyber Threats

The quantum key distribution market allows encryption keys to be transmitted securely, with their integrity guaranteed by the laws of quantum mechanics. Quantum Keys are generated by quantum communications equipment and distributed between two endpoints that require private communications. The keys are then used to encrypt and decrypt data transmitted through conventional communications channels. The advantage of quantum key distribution is that it enables detection of third-party eavesdropping or tampering, which is not possible with classical cryptographic methods. With growing cyber threats from both nation states and criminal networks, the need for hack-proof encryption is more important than ever to protect confidential communications for applications in national security, financial transactions, digital signatures and more.

The global Quantum Key Distribution Market is estimated to be valued at US$ 2.39 Bn in 2024 and is expected to exhibit a CAGR of 12% over the forecast period 2024 to 2031, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
One of the key trends in the quantum key distribution market is the increasing investment in commercialization of the technology. While early systems were developed for research purposes, considerable funding is now flowing into startups aiming to develop quantum key distribution for real-world applications. For example, ID Quantique, a Swiss startup, has developed QKD solutions for the financial sector, encrypted email services and mobile networks. Additional funding is also coming from governments recognizing QKD’s role in national security. As commercial solutions proliferate, widespread adoption of quantum key distribution will accelerate over the forecast period to meet the growing need for hack-proof encryption across many industries.

Porter’s Analysis
Threat of new entrants: The growth of the quantum key distribution market is supported by increasing investment in quantum technology. However, high initial infrastructure setup costs pose barriers for new players.
Bargaining power of buyers: The bargaining power of buyers is high due to the presence of several players offering quantum key distribution solutions. However, the need for highly skilled professionals limits switching between vendors.
Bargaining power of suppliers: A few major players dominate the supply of components and technologies for quantum key distribution systems, giving them significant bargaining power over buyers.
Threat of new substitutes: There exists no direct substitute for quantum key distribution technology. However, alternatives such as encryption provide limited competition.
Competitive rivalry: Being an emerging market, competitive pressures are low currently. However, increasing focus on cybersecurity is expected to intensify competition among vendors.

Key Takeaways
The global Quantum Key Distribution market size is expected to witness high growth over the forecast period driven by increasing investments to develop robust cybersecurity infrastructure.

Regional analysis –

North America dominates the global quantum key distribution market currently due to large cybersecurity budgets of governments and enterprises in the region. Asia Pacific is expected to witness the fastest growth owing to government initiatives to adopt advanced technologies in countries such as China and India.

Key players –

Key players operating in the Quantum Key Distribution market are Pfizer, Inc., Bristol Myers Squibb, Sanofi S.A., F. Hoffmann-La Roche AG, Bayer AG, Novartis International AG, Merck & Co., Inc., AbbVie, GlaxoSmithKline plc, Eli Lilly and Company, Zydus Cadila, Aurobindo Pharma Ltd., Cipla Ltd., Dr. Reddy’s Laboratories Ltd., Lupin Ltd., Sun Pharmaceutical Industries Limited, Serum Institute of India Pvt. Ltd., Biocon Limited, Strides Pharma Science Limited, and Unichem Laboratories.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it