In-Stat: Encryption on the Rise
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SCOTTSDALE, Ariz. -- With all that has happened in the last 18 months, the
need for encryption chips is picking up steam, according to In-Stat/MDR
(http://www.instat.com). The high-tech market research firm reports that,
although still in its infancy, the security IC market will be propelled
upward by the continuation of heightened security concerns, coupled with the
technology's ability to help companies operate more efficiently and lower
operating costs. As a result, the encryption chip market will grow from less
than $75 million in 2001 to over $575 million by 2006.
"There is no escape from the reality that companies need to do business over
the Web. Therefore, security is not an option, but a necessity," says Eric
Mantion, a Senior Analyst with In- Stat/MDR. "However, if companies have to
use encryption, they would prefer to do it at the lowest possible price and
well designed encryption chips can expand the capacity of a security
application at a fraction of the cost of using software over generalized
processors."
In-Stat/MDR has also found that:
- There is enormous potential for encryption chips over the next 20 years,
but many of those future demands have not yet been identified. At present,
these devices are not solely devoted to online shopping, but support a much
wider spectrum of applications, such as any sensitive online transaction,
VPNs, offsite storage services, mobile commerce, tunneled corporate WAN
connections, and eXML supply chains.
- The most significant trend that will cause encryption chips to grow
strongly over the next 5 years is the increase in integration that is
occurring. Recently, the placing of security chips in the data path for
higher-end applications, and as part of a highly integrated processor for
lower-end applications, makes the use of encryptions significantly more
efficient.
- The amount of bandwidth encrypted by security chips will enjoy more than a
doubling effect every year from 2003 to 2006. However, rather strong price
erosion - on a per kbps basis - will mitigate the revenues to roughly a 90%
growth year-on-year over that same time period.
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