Quantum Computing Market: Analysis By Component, By Application, By Technology, By End-user, By Region Size, and Trends with Impact of COVID-19 and Forecast up to 2027

In 2021, the global quantum computing market was valued at US$442.32 million> and is anticipated to grow to US$3295.97 million by 2027. Quantum computing is an emerging technology that leverages the laws of quantum mechanics to address problems that are too complex for traditional computers. The word "quantum" originates from the physics concept of Quantum Mechanics, which defines the physical properties of electrons and photons.

Quantum computers operate on the concept of "qubits." A qubit, also known as a quantum bit, is a fundamental unit of quantum information that is physically implemented via a two-state device. Some of the major reasons why companies are switching to quantum computing are the increasing demand for high performance computing, growing popularity of quantum mechanics in cryptography, rising use of quantum computing in drug development, etc. The quantum computing market is expected to grow at a CAGR of 39.88% over the forecast period of 2022-2027.

Market Segmentation Analysis:

• By Component: The report provides the bifurcation of the quantum computing market into three segments based on component: Hardware, Software, and Services. In 2021, the hardware segment lead the quantum computing market, whereas the services quantum computing market is expected to grow at the highest CAGR due to the rise in number of start-ups around the world and heavy investments in research and development activities related to computing technology.
• By Application: In the report, the global quantum computing market is divided into three segments based on the application: Optimization, Machine Learning, and Material Simulation. The optimization segment held the highest share in the market in 2021, whereas machine learning segment is expected to be the fastest growing segment in the forecasted period. This is mainly owing to the crucial role of quantum computing in improving capacity, runtime, and learning efficiency.
• By Technology: The report provides the segmentation of the quantum computing market on the basis of technology: Quantum Annealing, Superconducting, Trapped Ion, Quantum Dot and Others. In 2021, the superconducting segment dominated the market, owing to the faster operations of quantum computers based on superconducting qubits technology than the computers equipped with other technologies.
• By End-User: In the report, the global quantum computing market is divided into twelve segments based on the end-user: Finance & Investment, Transportation & Logistics, Aerospace, Agriculture, Automotive, Energy, Healthcare, Information Technology, Life sciences, Manufacturing, Oil, Gas, and Mining, and Others. The agriculture quantum computing market is expected to grow at the highest CAGR. Data analytics and AI-backed crop intelligence solutions represent the latest advancement that can assist farmers to make smarter decisions and take action to resolve various crop pressures before they have a chance to affect yield. A growth calculator, using quantum computing technology, enables farmers to control the speed at which plants grow to meet the optimal balance between harvest forecasts and customer demand. A quantum computer provides better machinery, soil management practices which can improve fertility. Therefore, the agriculture segment is expected to grow at the fastest rate.
• By Region: The global quantum computing market can be divided into five regions: North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The North America dominated the market in 2021, owing to the region's well-established technology development centers, increased R&D activity in developing quantum computing concepts, quantum computing applications, and quantum computers, etc. The US held the major share in the North American quantum computing market in 2021 due to early adoption of advanced technologies and an extremely competitive landscape. Asia Pacific is anticipated to lead the global quantum computing market during the forecast period, due to the growing use of emerging technologies in industrial manufacturing, continuous advancements in the IT (information technology) sector, rapid expansion of banking & finance industry, etc. In the report, the US quantum computing market is further bifurcated based on the end-user (Finance & Investment, Aerospace, Automotive, Energy, and Others).

Global Quantum Computing Market Dynamics:

• Growth Drivers: One of the most important factors impacting quantum computing market dynamics is rising investments in quantum technology. Governments have been increasingly investing into QC research and development in recent years, as policymakers start to appreciate the disruptive potential of QCs. As part of the 14th five-year plan for quantum technology (2021-2025), China has announced the most public funding to date of any country, more than double the investments by EU and eight times more than US government investments. Furthermore, the market has been growing over the past few years, due to factors such as increase in quantum computing start-ups, increasing number of strategic partnerships & collaborations, increase in demand for high performance computing, increasing use of quantum computing in drug development, etc.
• Challenges: However, the market has been confronted with some challenges specifically, high cost of quantum computing solutions, stability and error-correction issues, lack of quantum computing talent, etc. Quantum computers require specialized parts that aren’t being produced at large scales. They must constantly be at nearly absolute zero operating temperatures to increase their stability, which drives up costs. The cost of developing a large-scale quantum computer with many qubits is still prohibitively expensive. The cost of qubits can exceed tens of thousands of dollars and has to be supported by specialized electronics. The high price of quantum computers is impeding the market's expansion.
• Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such increasing adoption of cloud-based quantum computing, integration of quantum computing with IoT (internet of things), popularity of quantum mechanics in cryptography, technological advancement in quantum computing, etc. Quantum computing has started moving from the realm of computer science and research into something that enterprises might be able to use in the workplace. The emergence of quantum computing in the cloud has excited curiosity among tech buyers who are now looking at practical applications for this kind of computing. Complex technology, skillset limitations, lack of available resources, and cost deter some organizations from investing in quantum computing technology. To ease these concerns, quantum computing vendors, select cloud-service providers, and independent software vendors are offering quantum cloud-based solutions that allow organizations to experiment with this technology.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 breakout had a significant impact on the global growth of computing services. The alarming rise in COVID patients, as well as the advent of new viral strains, has prompted the adoption of work-from-home and digitization. Rapid digitization and the adoption of smart software boosted quantum technology adoption in 2020. The pandemic has emphasized society's need for faster optimization computations and more accurate numerical models, both of which quantum computers excel at.

Competitive Landscape:

The global quantum computing market is fragmented, with the presence of big tech players, to special purpose acquisition companies (SPACs) and start-ups operating worldwide.

The key players of the global quantum computing market are

• Amazon.Com, Inc. (Amazon Web Services, Inc.)
• Microsoft Corp. (Microsoft Azure)
• Alphabet Inc. (Google Cloud Platform)
• Alibaba Group (Alibaba Cloud)
• IBM
• Intel Corporation
• Nvidia Corporation
• Toshiba Corporation
• Rigetti Computing
• Quantum Computing Inc.
• D-Wave Systems Inc.
• Zapata Computing
• Xanadu Quantum Technologies Inc.
• QC Ware Corp.
• Ion Q

Some of the strategies among key players in the market for quantum computing are product launches, mergers, acquisitions, and collaborations. In June 2022, Amazon Web Services, Inc. launched the AWS Center for Quantum Networking, a new research effort that aims to push forward the science and engineering of networking quantum computers together, both for building more powerful, multiprocessor networks for computation and for creating secure quantum communication networks. Whereas, in July 2022, Nvidia Corporation announced a new platform for quantum research, QODA i.e. Quantum-Optimized Device Architecture, hoping to make QCs more accessible via the hybrid quantum-classical programming software. The new platform is a unified, open environment where users can learn to bridge the gap from classical technology to quantum processors. Nvidia aims to have the open beta by the end of 2022 and intends on launching the platform for free when it is completed.