Quantum cryptography involves harnessing the properties of quantum mechanics like quantum entanglement and superposition to develop cryptographic techniques that provide unconditional security. It ensures that the communication channel cannot be intercepted or tampered with and any attempt to do so would lead to detectable signal degradation. Quantum cryptography is used to develop hardware like quantum key distribution systems which allow for the generation, distribution and maintenance of encryption keys between users for secure transmission of data. It provides a key advantage over traditional public key cryptography by allowing detection of eavesdropping during transmission itself.

The global quantum cryptography market is estimated to be valued at US$125.32Mn in 2023 and is expected to exhibit a CAGR of 19% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:
One driver from the heading is increasing cyber threats. With rapid digitization and growing use of internet worldwide, the risk of cybercrimes targeting national security, critical infrastructure, financial institutions and private user data has risen exponentially. Cyberattacks cost billions to governments and businesses globally each year. Quantum cryptography provides the strongest level of security available today by leveraging the laws of quantum mechanics to detect any manipulation of transmitted information. This makes quantum cryptography an attractive option for governments and large enterprises dealing with highly sensitive data to mitigate cyber risks. However, high costs of quantum cryptography solutions limits their adoption currently to only mission critical security applications. Ongoing R&D aimed at reducing costs through semiconductor scale manufacturing is expected to drive wider commercial use of quantum cryptography over the forecast period.

SWOT Analysis
Strength: Quantum cryptography utilizes quantum mechanics to provide cryptographic security that is unparalleled. It leverages the principles of physics to ensure data is secure in ways that are impossible with classical cryptography. The laws of quantum mechanics make it impossible to intercept and readout quantum cryptographic transmissions without introducing distortions that reveal eavesdropping attempts.
Weakness: Quantum cryptography is still an emerging technology and highly complex which leads to high initial investment costs for infrastructure development and key distribution. Transmission losses over fiber also limit maximum transmission distances compared to classical cryptography.
Opportunity: With the rise of cyber threats, the need for strong security is growing rapidly across various industry verticals such as finance, defense, healthcare etc. This growing demand represents a major market opportunity for quantum cryptography solutions. Emergence of quantum networks will further boost the adoption of quantum cryptography for long term and distributed deployment of quantum secure communication networks.
Threats: Classical cryptography continues to rapidly advance and some threats like quantum computers may render current quantum cryptographic solutions insecure eventually. Delay in standards development and lack of skillsets can also hamper large scale commercialization of the technology in the near future.

Key Takeaways

The global quantum cryptography market is expected to witness high growth over the forecast period owing to rising need for cybersecurity across industry verticals. The global quantum cryptography market is estimated to be valued at US$125.32Mn in 2023 and is expected to exhibit a CAGR of 19% over the forecast period 2023 to 2030.

Adoption is quite evident in countries with established quantum programs like the US, UK, China, Germany and Japan. Within the quantum cryptography market, regional analysis depicts Asia Pacific as the fastest growing market. China has heavily funded research and development activities and is emerging as a leader in the field. Several start-ups and major tech companies in China are commercializing quantum key distribution solutions targeting financial and government sectors. North America currently dominates market share due to strong research activities by teams from Boston University, University of Toronto, University at Albany (NY) and partnerships between research institutes and technology companies.

Key players operating in the quantum cryptography market are Magiq Technologies, Inc., Quintessencelabs, Nucrypt LLC, Qutools GmbH, Qasky, Crypta Labs Ltd, Qubitekk, Inc., PQ Solutions, Infineon Technologies AG, and Id Quantique. Infineon Technologies has developed quantum random number generators targeting security applications and has partnered with several other component manufacturers to integrate quantumness in chipsets. Crypta Labs is a UK based start-up focusing on encrypted communication networks employing quantum key distribution. Magiq Technologies is a leader in photon source for quantum communications based out of California. In May 2023, Magiq secured USD25 million in funding to advance quantum cryptography product development.