Global Hardware in the Loop Market Size Analysis Report - Market Share, Forecast Trends and Outlook (2024-2032)

Hardware in the Loop Market Growth

The global market is driven by the thriving automotive and aerospace and defence industry. Hardware in the loop is a crucial component for the development of ECUs in the automotive industry. Hence, the growing adoption of ECU by the automotive industry, in order to meet various industry standards is likely to propel the demand for hardware in the loop. Over the forecast period, the growing demand for HIL technology from the electronic companies, for various applications, such as nuclear power plants, chassis systems, wind turbine generators, developing and testing of electronic grids, and photovoltaic inverters, among others, is likely to augment the growth of the market. The growth of the hardware in the loop market is further expected to be aided by the growing expansion of the major market players in the developing economies of the world.

Over the forecast period, the growing demand for the open-loop HIL in the household equipment, such as washing machine, electric bulb, electric hand drier, and bread toaster, among others, is likely to augment the market growth.

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Hardware in the Loop Market Trends

As electric vehicles continue to rise in popularity, HIL technology is crucial for testing various components, including electric drivetrains and battery management systems. This allows manufacturers to simulate real-world conditions to ensure efficiency and safety, making HIL an essential tool in automotive development and quality assurance. Autonomous driving features and advanced driver-assistance systems also rely heavily on HIL testing to validate functionalities, from sensor data processing to engine management systems, which helps reduce costly physical prototypes.

A crucial trend of hardware in the loop market is that HIL is widely used to support automation across industries, from smart grids to industrial robots. By providing a controlled testing environment, HIL helps engineers validate complex control algorithms and the interaction between hardware and software. The growth in IoT and embedded systems increases HIL demand, especially in regions modernising their infrastructure with automation technologies.

Recent Developments

As per the hardware in the loop market dynamics and trends, Rohde & Schwarz, a technology company, in collaboration with software provider IPG Automotive, has launched a comprehensive hardware-in-the-loop (HIL) testing solution for automotive radar systems. This innovative solution integrates IPG Automotive’s CarMaker simulation software with Rohde & Schwarz’s AREG800A radar object simulator and QAT100 advanced antenna array, allowing vehicle manufacturers to effectively simulate advanced driver-assistance systems (ADAS) and autonomous driving (AD) scenarios. The objective of this partnership is to transition autonomous driving testing from the proving ground to the development lab, ultimately leading to cost reductions.

Industry Outlook

The preferred power architecture for electric vehicles (EVs) is shifting to 800 V, which requires components to be rated appropriately and to be more robust than those used in 400 V systems. As per the hardware in the loop industry analysis, many original equipment manufacturers (OEMs) and system integrators in the automotive sector are investing in the development and validation of equipment, including Hardware-in-the-Loop Simulation (HILS) systems, specifically tailored for EV applications. A significant advantage for users of PXI or LXI platforms is that many existing modules will still be compatible during the transition from a 400 V to an 800 V architecture, enabling substantial reuse of the testing infrastructure. For components that need to be replaced due to the higher voltage requirements, the modularity and scalability of PXI and LXI systems make it easy to upgrade to higher-rated versions.

In 2023, military expenditures attained a record high of USD 2.44 trillion, with notable increases observed in all major regions. The United States leads as the highest spender, allocating USD 916 billion, trailed by China and Russia. This escalation in military spending is indicative of escalating global tensions and a shift in strategic priorities. The ongoing conflicts in Ukraine and the Middle East are significantly influencing defence strategies on a global scale. These factors can impact the growth of the hardware in the loop industry as it tests complex systems within controlled, simulated environments. 

Technological advancements, improved testing efficiency, a wide range of applications, and increasing demand for real-time simulation shaping the market.

• Hardware in the Loop (HIL) systems allow for real-time simulation of hardware components, providing faster and more cost-effective testing, especially for complex systems in industries like automotive and aerospace.
• By enabling safe testing of hardware components under various conditions, HIL reduces the risks associated with real-world testing, particularly for high-stakes applications like autonomous driving and aviation systems, which can boost the hardware in the loop demand. 
• The push for automation and precision in sectors like automotive, robotics, and defense drives the demand for HIL systems, as they provide reliable, high-fidelity simulations.
• Hardware in the loop testing improves testing efficiency and accuracy for complex systems.

High initial costs, complexity of integration, need for skilled professionals, and limited awareness in certain industries may pose challenges to the market players.

• High initial costs of hardware in the loop systems can be a barrier for adoption.
• Complexity of integrating hardware in the loop systems with existing setups can pose challenges.
• The need for skilled professionals to operate and maintain systems limits market penetration as well as hardware in the loop demand growth. 
• Dependency on software compatibility and updates affects system performance.
• Limited awareness and understanding of hardware in the loop benefits in certain industries hamper growth.

Development of advanced testing solutions, growth in EV industry, and regulatory support offers opportunities in the market.

• The shift toward electric vehicles (EVs) offers a significant growth opportunity for the HIL market, as it aids in the testing of electric powertrains, battery management systems, and other critical EV components.
• The increasing development of autonomous vehicles, drones, and robots requires extensive testing of safety-critical systems, which can be efficiently carried out using HIL systems, aiding the demand of hardware in the loop market.
• The continuous development of HIL systems with more accurate simulations, better real-time performance, and improved scalability could reduce costs and broaden the market's accessibility.

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Hardware in the Loop Industry Segmentations

Hardware in the loop is defined as the technique which is used in the testing of real-time embedded systems. The hardware in the loop provides a way of simulating sensors, actuators and various mechanical components.

Based on product type, the market is segmented into:

• Open Loop HIL
• Closed Loop HIL

The major industry verticals of the hardware in the loop market include:

• Defence
• Aerospace
• Automotive
• Power Electronics
• Research and Education
• Others

The regional markets for the product include:

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

Hardware in the Loop Market Share

Based on product type, the open loop HIL segment accounts for significant hardware in the loop market share and is anticipated to witness healthy growth of 6.6% in the forecast period. The open loop HIL is less complex in terms of use and provides stable operation. It is significantly cheaper than the closed loop HIL. Apart from being easy to construct and convenient to use, this segment is easy to maintain too.

In defence applications, open-loop HIL testing is used for the initial validation of simpler systems or components that do not require feedback from the testing environment, such as specific radar components or initial-stage guidance system testing.

Competitive Landscape

The report gives a detailed analysis of the following key players in the global hardware in the loop market, covering their competitive landscape, capacity, and latest developments like mergers, acquisitions, and investments, expansions of capacity, and plant turnarounds:

• Robert Bosch Engineering and Business Solutions Private Limited
• Seimens Aktiengesellschaft
• IPG Automotive GmbH
• dSPACE GmbH
• Speedgoat GmbH 
• NATIONAL INSTRUMENTS CORP.
• Others

Robert Bosch Engineering and Business Solutions Private Limited:

• The company focuses on integrating HIL systems into its broader engineering services portfolio, particularly for automotive applications. 
• The company emphasizes innovation, quality, and reliability, aiming to provide comprehensive solutions that support the development and testing of advanced automotive systems and enhance hardware in the loop market opportunities.

Siemens Aktiengesellschaft:

• Siemens is a leading player in the HIL market, with a strong presence across multiple industries, including automotive, aerospace, and industrial automation.
• Siemens focuses on leveraging its extensive experience in automation and digitalization to provide advanced HIL systems. The company integrates HIL with its broader simulation and testing solutions, aiming to offer end-to-end support for product development and system validation, particularly in complex engineering environments.

IPG Automotive GmbH:

• IPG Automotive emphasizes innovation and customization, offering tailored HIL solutions that meet the specific needs of automotive manufacturers and suppliers, which increases hardware in the loop market value. 
• The company aims to differentiate itself through cutting-edge technology and close collaboration with customers, focusing on the seamless integration of HIL systems into the development process.

dSPACE GmbH:

• dSPACE focuses on providing high-performance HIL systems that support the development and testing of complex control systems. The company emphasizes continuous innovation, reliability, and ease of use, aiming to remain at the forefront of HIL technology by addressing the evolving needs of its customers in areas such as autonomous driving and electrification.

Speedgoat GmbH:

• Speedgoat focuses on providing integrated HIL systems that work seamlessly with MATLAB and Simulink environments, catering to engineers and researchers that can increase hardware in the loop market revenue. 
• The company emphasises flexibility, performance, and customer support, aiming to provide highly customisable solutions that meet the specific needs of various industries, including automotive, aerospace, and energy. 

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Hardware in the Loop Market Regional Analysis

The industry in North America is driven by the growing investments towards the expansion of the real-time embedded systems in the United States of America and Canada. The USA market is expected to grow at a CAGR of 5.4% in the forecast period. The hardware in the loop market expansion in the region is anticipated to be augmented by the rising demand for heavy machinery and large-sized equipment, owing to the rapid urbanisation and technological advancements in the infrastructure. The market in the region is further expected to be aided by the rising government expenditure towards research and education.