Analysis: Global Trends of Hardware Security Module

With the rapid rise of digitalization, emerging applications are springing up in all industries, changing how people communicate and increasing the efficiency of business operations. However, with the deployment of digitalization and the internet of things, hardware platforms have carried countless personal information, user behavior & transaction data, mailing addresses, etc. The key to providing users a secure and reliable environment between “dynamic and static” (dynamic data transmission and static data storage) lies within encryption and authentication services in cryptography, where users are free from the risks of data tampering, and identity impersonation, and asset theft. When it comes to data encryption and authentication, hardware security modules (HSM) cannot be overlooked.

Hardware Security Module

Today, more organizations and governments use encryption and authentication functions to protect data content and manage access rights. At the same time, more regulations require systems to have encryption and authentication functions.

These include the California Consumer Privacy Act (CCPA), the pseudonymization in the General Data Protection Regulation (GDPR), the regulations managing the storage and transmission of PIN codes and personal privacy data in the Payment Card Industry Data Security Standard (PCI DSS), and the Health Insurance Portability and Accountability Act (HIPAA) that manages the security of patient privacy.

When the data in the system is not encrypted, the attack surface is not effectively limited and hackers have a higher chance of obtaining the data. After the data is encrypted with a cryptographic key, the risk of data leakage now completely falls on the key itself, which can effectively reduce the attack surface. However, if the cryptographic key is leaked, the data in the entire system has a high chance of being decrypted and stolen. Thus, key management is integral to the cryptographic services. A hardware security module (HSM) is going to be used to safely store the keys and provide cryptographic services.

Global Market Development

In the global application field of hardware security modules, LAN-based is the most common type in the market. This is mostly used in BFSI (banking, financial services & insurance), providing high-speed digital signatures and other applications such as satisfying the authentication requirements.

However, with the fast developments of embedded systems, computing abilities have significantly increased. Calculations and applications needed from the host can now be done from other systems such as mobile devices and edge computing. These peripheral systems have brought the processing of large data streams and the execution of applications closer to users. This change also signifies exponential growth in the demand for computers, tablets, smartphones, and other end devices in the future. According to renowned global market research, USB-based hardware security modules have the most growth potential in the next decade. It also supports file encryption and storage, in addition to the “passwordless authentication” promoted by the FIDO Alliance, to protect private data stored on a computer or mobile office (Windows to GO).

The Shortcoming of the Hardware Security Module Industry

Despite having an 11% compound annual growth rate (CAGR), the hardware security modules industry is still not able to satisfy the security demands of emerging applications, small and medium enterprises (SMEs), and startups.

A lot of times, the hardware security modules of major manufacturers only need to meet the requirements of the military, political, and financial related units and match the clients’ budgets and cost structures. Taking account of specific application scenarios, the products usually have a “high unit price” and are “one-dimensional” in their functions.

The evolving trends are still not able to affect the rigid structure of the HSM industry as conventional industries are still limited by “costs” and the “knowledge of information security” when applying information security hardware. Even if costs are not a problem, “feasibility” and “flexibility” still pose as problems. Whether it be educational training or new standards or the introduction of new algorithms, there will be additional costs that will burden the industry.

From relevant market research and analysis, an industrial revolution of hardware security modules is needed so enterprises of any size can introduce hardware security services on the premise of meeting economic benefits as well as being mindful of the usability of products and subsequent maintenance costs.

Furthermore, facing the unknown amid the COVID-era, flexible and multi-faceted hardware security modules are the ones that can fastly adapt to the ever-changing threat landscape.

WiSECURE Technologies Achieves Cultural Innovation

WiSECURE Technologies is the only HSM manufacturer in Asia that produces the three form factors of PCIe, USB, and MicroSD. We (WiSECURE Technologies) take the perspective of cultural innovation instead of pursuing arms race-styled market strategy or imitate the successes of industry peers. We break down the industry norms, define the shortcomings, and concentrate resources precisely on products worth developing in.

WiSECURE has its self-developed cryptographic algorithms and professional expertise to apply hardware cryptography. Combining these with Taiwan’s well-equipped supply chain, from algorithms to hardware cryptography to developing models that can all be completed independently, the standardized cryptographic core can be introduced into different types of hardware platforms (PCIe, USB and MIicroSD) so servers, computers, tablets, mobile devices, and other embedded systems can have a complete hardware security module. Through the strategies of the product, SMEs with limited costs but needing encryption services can freely choose different types of hardware security modules according to operating costs and business models, and deploy hardware encryption services for products and their own systems.

Global Market Expansion

Vince Lin, Marketing Director of WiSECURE Technologies, stated that due to the work-from-home culture started by the pandemic in 2020, many European, American, and Southeast Asian manufacturers have been looking for online opportunities for exposure or collaboration through online platform events. Not only does this promote networking online with other companies, but this also means companies can expand international sales, educate the market, and share corporate ideas at a relatively lower cost.

As a cultural innovation leader in the HSM industry, we are not just looking for ordinary users, but those who are familiar with the current situation of the industry, those who understand the brand value of WiSECURE Technologies, and those who are willing to become the global partners of pioneers.

The following article is a translation from the original article published on the WiSECURE website.