Japan Confidential Computing Market Size, Share and Trends 2026 to 2035

What is the Japan Confidential Computing Market Size?

The Japan confidential computing market is expanding as enterprises adopt secure cloud technologies to protect sensitive data during processing and computatio. The Japan confidential computing market is experiencing rapid growth, driven by growing concerns about data breaches and cybersecurity, and growing demand for effective data protection solutions.

Market Highlights

• By component, the hardware segment held the largest market share in 2025.
• By component, the software segment is expected to grow at the fastest CAGR during the forecast period.
• By deployment mode, the on-premise segment contributed the biggest market share in 2025.
• By deployment mode, the cloud segment is expected to grow at the fastest CAGR between 2026 and 2035.
• By application, the privacy & security segment held the largest Japan confidential computing market share in 2025.
• By application, the blockchain segment is projected to grow at the fastest CAGR during the forecast period.
• By end-user, the BFSI segment held the largest market share in 2025.
• By end-user industry, the IT & telecom segment is expected to expand at a remarkable growth rate, from 2026 to 2035.

Beyond Encryption: Hardware-Secured Privacy for a Multi-Cloud World

Confidential computing is a privacy-enhancing technology (PET) that protects sensitive data while it is being processed, not just when it is stored or in transit. This is achieved by using trusted execution environments (TEEs), hardware-based security. The TEE acts as a secure space of the processor that isolates sensitive computations from the rest of the system and ensures data protection from malicious attackers. It allows working with sensitive data in the cloud while ensuring its safety from other systems and the individuals operating them. This technology allows to perform computations on encrypted data without exposing it to the host system or cloud provider.

How is AI impacting the growth of the Japan Confidential Computing Market?

As technology continues to advance, Artificial Intelligence (AI) integration represents a game-changer and is accelerating the growth of the Japan confidential computing market. Confidential AI platform enables multiple entities to collaborate and train accurate models using sensitive data and serve these models with assurance to remain protected from privileged attackers and insiders. Integrating AI with Confidential Computing (CC) increasingly focuses on a secure and privacy-driven environment. Developers can run valuable and unique AI models inside the TEE, which prevents attackers from accessing or tampering with sensitive data. The integration of AI with confidential computing enables various applications that were often restricted, owing to privacy and security concerns. ‘

Several financial institutions are widely using advanced AI models for fraud detection. This model operates in a secure and confidential environment to protect live financial data and proprietary fraud detection algorithms from leakage. Hospitals are increasingly training diagnostic AI models on patient records collaboratively while aligning with the stringent privacy laws, such as GDPR and HIPAA. Confidential computing allows organizations to train and run inference on advanced AI models within secure hardware enclaves such as AMD SEV, Intel SGX, ARM CCA, and others.

In October 2025, Fortanix Inc., announced a joint solution with NVIDIA to deliver a turnkey, on-premises platform for running secure and sovereign, agentic AI in AI Factories and highly regulated environments. With a confidential AI pipeline, composite attestation, and HSM-gated key release, enterprises can now innovate securely while knowing their sensitive data, models, and workflows are protected.

What are the Emerging Trends in the Japan Confidential Computing Market?

• The significant private and public investment in industrial infrastructure, along with the increasing presence of data security providers, is expected to promote the market during the forecast period.
• The increasing concerns related to data security have significantly increased the deployment of confidential computing across industry verticals such as banking and finance, healthcare, retail, and others, which is accelerating the growth of the confidential computing Japan confidential computing market during the forecast period.
• The increasing demand for secure environments to train and run sensitive AI workloads is expected to bolster the market's growth during the forecast period.
• The rapid pace of digitization, rising integration of GPU into confidential computing, and supportive government-led digital initiatives to combat the risk of cyber threats is expected to create significant growth opportunities for the confidential computing market during the forecast period.
• The increasing number of organizations shifting to the cloud is anticipated to accelerate the growth of the Japan confidential computing market during the forecast period. As organizations move to the cloud, confidential computing provides the trust to manage sensitive data in shared environments.
• The growing need for data processing security and the surge in industrial transactions between organizations are spurring the demand for an end-to-end data encryption software solution, contributing to the overall growth of the market.

Market Scope

Segmental Insights

Component Insights

What caused the Hardware Segment to dominate the market in 2025?

Hardware

The hardware segment held the largest Japan confidential computing market share in 2025. Hardware remains a key component in Japan's confidential computing market, as enterprises emphasize the importance of higher security. Hardware-based solutions like Hardware Security Modules (HSMs) and Trusted Execution Environments (TEEs) serve as the foundational layer for improving data security. The growth of the segment is driven by the growing demand for specialized confidential computing hardware in several end-use industries, such as BFSI, healthcare, manufacturing, IT & Telecommunication, and others. The country's strengths in hardware innovation and rising emphasis on data sovereignty require on-premise and secure hardware solutions.

Software

The software segment is expected to grow at a remarkable CAGR between 2026 and 2035. The software segment is rapidly growing as organisations across various sectors like BFSI, healthcare, IT & Telecommunication, and government are adopting confidential computing SDKs (Open Enclave, Gramine) to safeguard sensitive data during processing in cloud environments. The rising technological advancements in trusted execution environments (TEEs) and management tools are likely to make software solutions more advanced. The rising digitalization and increasing integration of AI/ML require secure cloud platforms, driving the demand for confidential computing software for handling data securely.

Deployment Mode Insights

Which sub-segment is dominated by the deployment mode in the market?

On-premise

The on-premise segment is dominating the Japan confidential computing market by holding the highest market share in 2025. On-premises infrastructure is highly preferred where data privacy and compliance are crucial. On-premise deployments remain critical for organizations such as banking, government, or healthcare sectors that deploy TEEs within their fully controlled environments, using secure servers for handling sensitive data.

Cloud

On the other hand, the cloud segment is the fastest-growing in the Japan confidential computing market, with a remarkable CAGR, owing to the growing need for cloud-based solutions for hosting and managing confidential computing environments. Cloud-based deployment model offering various benefits such as scalability, cost-effectiveness, and flexibility. Cloud-based eliminated eliminate the need for high upfront capital investment in heavy infrastructure. Moreover, the increasing investment in cloud-based solutions by the prominent market players is anticipated to drive the growth of the segment during the forecast period.

End-user industry Insights

What causes the BFSI segment to dominate the market?

BFSI

The BFSI segment is dominating the Japan confidential computing market by contributing the biggest revenue share. The growth of the segment is mainly driven by the rapid digital transformation, stringent compliance requirements, rise in the cases of sophisticated cyberattacks, and the increasing adoption of collaborative AI/ML technologies.

The rising shift towards online banking and digital wallets in the country has increased the substantial need for next-generation security solutions to prevent data breaches. Confidential computing secures sensitive data while in use, which assists financial institutions in protecting customer data and complying with strict regulatory requirements. BFSIs are increasingly adopting confidential computing for securing transactions, AML workflows, fraud analytics, and customer data protection.

IT & telecom

The IT & telecom segment is the fastest-growing in the Japan confidential computing market, owing to the growing demand for robust security measures, rapid technological advancements, and the constant surge in digital data within the IT & telecom industry. IT & telecom companies are increasingly embracing confidential computing for securing sensitive data. Confidential computing assist telecommunication industry in numerous applications, such as shifting virtualized network functions like 5G core applications to the public cloud while keeping data encrypted.

Application Insights

Why has the led privacy & security segment to dominate the market?

Privacy & security

The privacy & security segment dominates the Japan confidential computing market. The growth of the segment is primarily supported by the rising focus of organisations on protecting sensitive processing workloads with encrypted-in-use architectures. Enterprises are increasingly moving data to the cloud, which has increased the security needs to protect their sensitive data at rest, on the network, or in use in secure protected computation. Thus, the increasing needs of managing and protecting sensitive data throughout the life cycle, along with compliance with industry regulations, are driving the demand for confidential computing for computational security.

• In October 2024, Fortanix Inc. announced the introduction of expanded key insight solutions and the addition of file system encryption to Fortanix Data Security Manager (DSM) for the Japanese market. In line with Fortanix's global strategy, these advanced capabilities address the evolving data security needs of Japanese enterprises and their preparation for the era of quantum computing.

Blockchain

The blockchain segment is the fastest-growing segment in the Japan confidential computing market and it's set to grow at a notable CAGR during the forecast period. Blockchain technology and trusted execution environments (TEEs) have emerged as complementary approaches to improve security and data integrity. The segment's growth is mainly driven by the increasing demand for blockchain networks that offer better control and privacy over data and comply with strict regulatory standards. The Japanese BFSI sector is widely adopting blockchain to improve efficiency in cross-border settlements, enhance transparency, and eliminate the risk of fraud through secure and decentralized ledger technology.

Who are the Major Players in the Japan Confidential Computing Market?

The major players in the Japan confidential computing market includeFortanix Inc., NEC Corporation, NTT Data, Hitachi, Amazon Web Services (AWS), Intel, AMD , Microsoft Azure, IBM, Renesas Electronics, KDDI, Rakuten Communications Platform, Preferred Networks, SoftBank, and Sony Semiconductor Solutions

Recent Developments in the Market

• In December 2025, Fortanix Inc., a global leader in data security for an AI world, today announced its hyper-secure platform – Armet AI – can be deployed on HPE's AI solutions, combining secure infrastructure and accelerated computing for scalable, production-ready AI. Global enterprises can leverage HPE ProLiant Compute DL380a Gen12 servers and NVIDIA RTX PRO 6000 Blackwell Server Edition GPUs to build and run secure, scalable AI workloads on-premises, in the cloud and in AI factories with confidential computing-enabled security and trust over data, models, and prompts. (Source:https://www.hpcwire.com)
• In April 2025, Acompany Co., Ltd., a company promoting privacy-centric digital transformation (Privacy DX), announces the launch of AutoPrivacy AI CleanRoom, Japan's first security service leveraging hardware-based confidential computing to protect data and AI. Through this new service, Acompany aims to empower generative AI to become a trusted partner in business, accelerating operational efficiency. (Source: https://en.acompany.tech)

Segments Covered in the Report

By Component

• Service
• Hardware
• Software

By Deployment Mode

• On-premise
• Cloud

By End User

• BFSI
• IT and Telecom
• Healthcare
• Retail and E-commerce
• Manufacturing
• Government and Public Sector
• Others

By Application

• Privacy & Security
• Blockchain
• Multi-party Computing
• IoT & Edge
• Personal Computing Devices