The embedded systems market - France

1.2 The growing world market

The global embedded systems market is in good shape, valued at $***.* billion in **** by Market Research Future. This market is expected to grow at a CAGR (***) of *.*% over the period ****-****. embedded Systems Market Size Evolution World, ****-***** (***) estimated at *.*% CAGR Source: Market Research Future The main factors driving the growth of this market are the increase in research in this sector and the development of new technologies using embedded systems. The growth of this market is also correlated with the increase in demand for advanced driver assistance systems (***) and electromobility solutions for electric and hybrid vehicles, for example. [***]

According to experts, growth in the embedded systems market will be strongest in the communications sector, followed by automotive, consumer electronics and industrial. [***] Similarly, China will be the fastest growing country in the ****-**** period.

1.3 The French market

At the time of writing, there is insufficient data to estimate the size of the French embedded systems market. Indeed, it is a cross-cutting market that can be found in several sectors, such as aeronautics and aerospace, defense, automotive, household appliances, medical, as well as in several other industries.

However, the embedded systems market is part of the broader electronics industry, which is expected to reach **.* billion euros in ****. The electronics sector brings together many different players, including : producers of electronic components, connectors and printed circuits, designers and assemblers of electronic boards and sub-assemblies, software publishers, distributors, and also manufacturers of embedded systems.

The embedded systems industry is an asset for France, being a source of innovation for the whole industry. Investment needs are significant, and industrialization and manufacturing are major elements for the success of the industry. Other component technologies are also mastered in the region: in connector technology for example, five of the world's top ten manufacturers have R&D and manufacturing operations in France.

France can thus rely on a leading-edge industry in the field of electronic technologies and components, with high R&D intensity and significant added value. This industry works mainly on an international scale, which ...

2.1 Embedded systems in aeronautics and aerospace

In the aeronautics sector, the needs in embedded systems mainly concern the following products :

On-board computers Telecommunications Transmissions Servers and access points [***]

The needs of the sector are software and hardware. In aeronautics and aerospace, embedded technologies are used for the reliable guidance of satellite launchers, as well as for missiles or the automatic pilot in airplanes. In this sector, the embedded systems market is driven by a transatlantic project between France and Quebec, the DEEL (***) project. The latter has a budget of €** million over five years and aims to innovate in artificial intelligence in order to be able to embed these new technologies on new aircraft, spacecraft or land vehicles. This project began September **, **** in France and May **, **** in Quebec. It brings together multiple major French players such as Airbus, Thales, SNCF or multiple universities.

Aerospace construction sales index France, ****-****, index base *** in **** Source: ****

The French aeronautics and aerospace market is a growth market for the French economy. However, this market entered into difficulties in **** with the coronavirus crisis and travel restrictions. In addition, the economic climate is not good, as the value of orders placed in the French aerospace sector has been steadily declining for the past few ...

2.2 Embedded systems in the automobile

Depending on the field of application, embedded systems are subject to particular constraints and requirements. In the automobile, one of the most important constraints is real time, both for the performance of the vehicle and for the safety of the driver and passengers on board.

If a computer or an electronic object can have a few seconds of latency, this same latency could cause an accident for a car. That's why this constraint is so important in the automobile.

A real time system works according to the following scheme:

In ****, the share of electronics in the manufacturing cost of a car could go up to **% on the most equipped models marketed that year. Between **** and ****, the share of electronics jumped from ** to **% of the manufacturing cost. Thus, this evolution of on-board electronics in vehicles is a growth lever for the sector.

Share of electronics in the cost of manufacturing a vehicle World, ****-**** Source: ****

Valeo is one of the leading automotive equipment companies in the world and in France, with sales of **.*** billion euros in ****. The French market brings in *.** billion euros. In ****, the company ranked first in the list of patent applicants in France with *,*** patent applications. The company's **** revenue ...

2.3 The use in household appliances, image of an evolving technology

In addition to being used in the aerospace and automotive sectors, embedded systems technology is also present in everyday objects. These uses present huge commercial opportunities, the limits of which are still far from being reached, since consumer electronics are constantly integrating more and more technologies. For example, the sale of household appliances in France has been rising overall since ****, as we can see in the following graph. The progression of the connected industry is therefore reflected in the figures. According to GIFAM, in ****, the connected industry represented *% of the total market. Only, this share is bound to increase in view of the multiple advances in terms of connected home utensils.

Sales of household appliances in France France, ****, base value index *** in **** GIFA

Connected homes are growing rapidly in France, and with them, connected small appliances, which can be considered embedded systems, or themselves made up of embedded systems. Products of this type allow consumers to control their appliances remotely and save energy.

Breakdown of the type of appliances used by consumers France, ****, in % Source: ****

In ****, only **% of consumers own connected home appliances. However, this rate of connected appliance ownership is expected to grow rapidly in the coming years. Between **** and ...

2.4 Embedded systems in the medical field

In the medical field, devices must be reliable and safe so as not to endanger the lives of patients . For example, a badly calibrated machine could irreversibly damage a patient's cells. The machines and their operation must also be protected from cyber attacks or simply from power failures. The risks involved in this specific field are numerous, as are the precautions that engineers must take.

The presence of embedded systems is not new in the medical field. However, the progressive arrival of the Internet of Things (***) allows a greater use of embedded systems in this field which requires reliable tools. For example, the IoT is enabling the advent of more advanced wearable devices that could enable the detection, and therefore faster treatment, of dangerous chronic diseases. These devices could follow individuals in their daily lives in order to detect symptoms as soon as possible, such as glucose meters, pacemakers or connected inhalers that are already available to patients in order to take care of them.[***]The advent of these new tools comes at a time when online medical consultations are exploding, especially with the passing of the health crisis. We can then imagine for the future a medical follow-up that can ...

2.5 Embedded systems in defense

The increased use of military hardware and electronics puts pressure on specialized standards for embedded systems for military and aerospace applications. For example, embedded systems for the military and aerospace industry must be able to survive in extreme environments (***). With the military embedded systems market estimated to be worth $***.** billion in **** worldwide, there are many opportunities for embedded systems developers to contribute to military and aerospace applications.s to contribute to the latest and most advanced military and aerospace applications, as militaries are always looking for state-of-the-art equipment. [***]

In addition, in July ****, the ****-**** Military Programming Law was enacted. One of the main axes of this funding concerns the renewal of equipment for the three armies and mainly concerns armored vehicles, helicopters, submarines, transport and combat aircraft, missile, etc. This is equipment that requires onboard systems, and where national preference for suppliers is favoured. This suggests good prospects for the French market. [***]

This law provides for a financial effort of *** billion euros over the period ****-**** and programs a total of *** billion euros over the period ****-****, conducive to the development of opportunities for the embedded systems market.

Annual military budget provided for in the Military Planning Law France, **** - **** Source: ...

2.6 Embedded systems in other industries

The embedded systems, by their very broad fields of application, are a technology used in the majority of the industrial sectors in the majority of industrial sectors, not all of which could be developed in the previous parts of the application. This part aims at detailing the industrial potential in France, which impacts the market of embedded systems market.

Thus, after the French industry was very strongly impacted by the financial crisis of the late ****s, as shown by the balance of creation of industrial sites in **** (***). The number of industrial sites continued to decline until ****, before increasing for three consecutive years. In ****, the year of the health crisis, the balance of creation was -**, a decrease in much smaller proportions than following the financial crisis of ****. Thus, underlying trends such as Made in France and re-industrialization policies can explain the relative rebound of industry in France, which should not significantly reduce its demand for embedded systems. [***]

Industrial site openings and closures France, ****-****, in number of sites Source: ****

Another key indicator of potential demand for embedded systems is manufacturing industry investment in capital goods. The following graph shows the evolution of the manufacturing industry's investment in electrical, electronic and computer ...

3.1 The market value chain

Various players in the digital technology, engineering and consulting sectors are involved in the various design and construction phases of embedded systems. As software suppliers, they develop the software part of embedded systems. These include software publishers, application publishers, system publishers, network publishers, and development and language tool publishers (***). They also act as service providers to suppliers, OEMs, integrators and manufacturers, providing expertise in one or more aspects of the design, development, project management or sale of embedded systems.

These same players work in close collaboration with other sectors of activity, particularly with industries in the broadest sense. These include, in particular, producers of raw materials (***).

The diagram below shows a simplified value chain for the manufacture of embedded systems:

Source: ****

There are end users considered as B to C, but their share is extremely marginal. In fact, these are generally specialized players who design embedded systems in order to resell them to players in different sectors, so that they in turn design the final product, which is sometimes intended for the general public, as in the case of consumer electronics, for example.

3.2 Production of embedded systems

Production of embedded systems

Strong dichotomy by use

In the case of consumer goods, consumer electronics, automotive, health and industry, industrialists, manufacturers and producers of finished products will generally tend to outsource the production of embedded systems in order to reduce costs and because they lack the required skills and technologies. They will then use, depending on the market, a variety of technologies to develop their own solutions. Depending on their level of technological expertise, they will either use the services of turnkey solution providers or source their own components and software before turning to integrators.

On the contrary, in the aerospace and defense sectors, given the strategic nature of the end use, players will internalize the production of embedded systems.

Development of an embedded system

The development of an embedded system relies on a good knowledge of electronics and computing.

From a practical point of view, several steps are necessary to develop such a system

the technical documentation covering the different components used the basic electronic components (***) a microprocessor or microcontroller (***) hardware and software debugging hardware (***) time analysis equipment (***) a good command of systems engineering in order to integrate the software with the hardware, and then the embedded system with ...

3.3 The opportunities of a growing market

Embedded systems are present in a wide variety of products, from cars to household appliances, toys and measuring instruments. They represent an interesting market because they are present in many sectors and are a driver of innovation in sectors such as automotive, aerospace, but also in the medical.[***]

By applications, the market is classified into seven segments, namely:

automotive, telecommunications, healthcare, industry, consumer electronics aerospace and space defense

By way of comparison, if we consider a similar market, that of electronic components, the main outlets for this market are industry and the automotive sector, which represent almost three quarters of the market.

Market outlets for electronic components France, ****, share in % of market value Acsiel

3.4 A shortage of specialists in the face of rapidly growing demand

The embedded systems market is growing and has good prospects. Thus, the demand for new qualified profiles is strong. The graph below highlights the professions for which the demand for workers is growing the fastest. At the top of the list is Software Engineer/Developer, for which **% of the companies surveyed stated that the need for workers was growing rapidly . We find the Embedded Systems Architect profession in *rd position with **% of companies having cited it. Companies surveyed ranking the professions with the fastest growing needs. France, ****

This graph therefore shows the occupations that are in the process of being increasingly in demand. However, it also reflects the occupations that are currently under the greatest pressure, as shown in the graph below.

Percentage of companies having difficulty recruiting in the trades mentioned France, **** Source: ****

We note that if we combine the three occupations that are directly related to the field of embedded systems (***), we arrive at a total of **% of companies that are struggling to recruit in the embedded systems sector, reflecting a severe shortage of specialists.

4.1 Prices and parameters

It is difficult to get an idea of the price of embedded systems as a whole, since there are no standard products, but a wide variety of products designed to meet specific needs, all of which fit together in the finished product.

In any case, the actors of the integrated systems market must take into account several orders of constraints. The respect of these constraints and the performance of the embedded systems will determine their price.

Physical size: the physical components of embedded systems (***) must be as small and as light as possible in order not to have a negative impact on the appearance, practicality, ergonomics and performance of the product. Digital space : the embedded software must be able to run with a very small memory space (***). Energy consumption : the actual consumption and the recharging modalities are two essential factors. Computing time : decision making and execution time. Computing power: as for the memory space, the computing power must be finely calibrated according to the tasks to be carried out in order to avoid energy overcosts and the extension of the computing times. Operational safety: an embedded system is considered critical if its failure would put human lives at risk. This type ...

4.2 Innovations and supply trends

The digitalization of everyday life through the democratization of connected objects represents a considerable opportunity for embedded systems professionals. The challenge for manufacturers is to create more secure and more open embedded systems to adapt to new needs in different environments. The big challenge is to create learning embedded systems, thus increasing the share of artificial intelligence in this technology. [***]

By ****, with the entry of artificial intelligence in embedded systems, shipments for this type of product should increase from ***.* millions euros in **** to *.* billions in ****.[***]

Shipments of terminals with AI technologies France, ****-****, in millions of euros Source: ****

However, the integration of artificial intelligence poses some challenges, particularly in the optimization of algorithms, as embedded systems have limited processing, memory and communication capacity. [***]There are multiple other challenges identified for the embedded systems market. A study by OPIIEC reports on the issues identified in **** and at present, and then establishes a scale of more or less current and future trends. Thus we have:

Trends identified in **** Trends identified in **** and amplified today Current trends Future trends Diversification of uses Cybersecurity Open source hardware and pre-integrated architectures Emerging technologies (***) Internet of Things Open source software Ecological and energy transition Cloud and Big ...

5.1 Legal framework for the electronic components market

The making available on the market of a product corresponds to "any supply of a product intended to be distributed consumed or used on the Union market in the course of a commercial activity, whether in return for payment or free of charge".

The placing on the market of a product is "the first making available of a product on the market of the Union". Generally, a product is placed on the market when it is sold at the end of its manufacturing phase (***) or when it is imported into the Union. The concept of placing on the market applies to each individual product and not to a product reference or model, regardless of whether it was manufactured individually or in series.

Depending on the nature and technical characteristics of the product, different regulations may apply.

GENERAL REGULATIONS APPLICABLE TO ELECTRICAL AND ELECTRONIC EQUIPMENT

If the product operates at input or output voltages between ** to **** V in alternating current and between ** to **** V in direct current, it is subject to the decree n°****-**** of ** August ****, transposition of the new Low Voltage Directive ****/**/EU.

Electromagnetic compatibility

Electromagnetic compatibility has two aspects:

Immunity, which is the ability of an equipment to function ...

6.1 Segmentation of market players

6.2 Recent developments concerning French players

Electronics groups are trying to conquer markets with a high level of innovation, and this is particularly true in the case of artificial intelligence. STMicroelectronics is doing just that, having acquired Toulon-based Cartesiam (***) software, in May **** to strengthen its position in more advanced technologies than it currently offers. Cartesiam's proprietary NanoEdge™ AI Studio solution enables embedded system developers with no AI experience to easily develop libraries that integrate machine learning algorithms directly into a wide range of applications. [***]

Following the development of an embedded programmable logic technology, French startup Menta has just received a €*.* million loan from the European Investment Bank (***) and is preparing to raise €** million to accelerate its commercial development. [***]

• Thales
• Alstom
• Latecoere
• Arkeva
• Actia Groupe
• Safran Groupe
• Zodiac Aerospace (Groupe Safran)
• Schneider Electric
• Sopra Steria