Quantum-Enhanced Homomorphic Encryption Market Report 2025

The quantum-enhanced homomorphic encryption market size has grown exponentially in recent years. It will grow from $1.18 billion in 2024 to $1.63 billion in 2025 at a compound annual growth rate (CAGR) of 37.7%. The growth observed during the historical period is driven by increasing demand for secure data transmission, greater adoption of cloud computing, heightened regulatory emphasis on data privacy, rising cyber threats targeting sensitive information, and expanding enterprise use of encryption solutions.

The quantum-enhanced homomorphic encryption market size is expected to see exponential growth in the next few years. It will grow to $5.79 billion in 2029 at a compound annual growth rate (CAGR) of 37.4%. The projected growth during the forecast period is driven by the increasing adoption of quantum-resistant security solutions, broader use of homomorphic encryption in cloud services, enhanced integration for healthcare data protection, expanding applications in government and defense sectors, and rising demand from blockchain-based platforms. Key trends expected in this period include advancements in quantum-safe encryption algorithms, innovations in hardware acceleration for homomorphic encryption, development of hybrid classical-quantum encryption models, ongoing research in privacy-preserving computation, and the adoption of post-quantum cryptography standards.

The growing risk of data breaches is expected to drive the expansion of the quantum-enhanced homomorphic encryption market. Data breaches involve unauthorized access, disclosure, or theft of sensitive information from organizations or systems. As the volume of digital data being generated, stored, and transmitted online increases, opportunities for unauthorized access and exploitation rise. Quantum-enhanced homomorphic encryption helps prevent data breaches by allowing data to be processed securely while remaining encrypted, maintaining confidentiality even against quantum computing threats. For example, in June 2025, the Department for Science, Innovation and Technology reported that about 43% of UK businesses and 30% of charities experienced a cybersecurity breach or attack in the past year, translating to roughly 612,000 businesses and 61,000 charities affected.

The widespread adoption of digital technologies is contributing to the growth of the quantum-enhanced homomorphic encryption market. Digital transformation involves incorporating technology across all areas of a business, fundamentally changing operations and how value is delivered to customers. With rapid advancements in technology, businesses are increasingly implementing new digital tools to remain competitive and meet customer expectations. Quantum-enhanced homomorphic encryption facilitates secure data processing and analytics without compromising privacy, even in environments vulnerable to quantum computing. For instance, in October 2024, the European Investment Bank reported that 74% of EU companies were using digital technologies, a 4% increase from the previous year.

Key players in the quantum-enhanced homomorphic encryption market are developing innovative approaches such as the quantum privacy query (QPQ) protocol to improve secure data protection. The QPQ protocol allows users to query encrypted databases securely and obtain accurate results without exposing the query or compromising data privacy. In January 2025, MicroCloud Hologram Inc., a US-based software company, introduced a quantum bit rotation-based single-ternary quantum homomorphic encryption protocol. This protocol enables asynchronous operations in distributed systems, supports real-time encrypted data processing, and reduces key management complexity. Such innovations enhance data privacy and processing efficiency, particularly in sectors handling large volumes of sensitive information. However, adoption remains limited due to hardware constraints and the need for standardization.

Major players in the quantum-enhanced homomorphic encryption market are NVIDIA Corporation, Google LLC, Microsoft Corporation, International Business Machines Corporation, Amazon Web Services Inc., Intel Corporation, Thales Group, Zama Inc., D-Wave Systems Inc., Quantinuum Limited, QnuLabs Pvt. Ltd., Rigetti Computing, SandboxAQ Inc., Duality Technologies Inc., Post-Quantum Security Ltd., PQShield Ltd., Decentriq AG, Ravel Technologies Inc., Enveil Inc., and Chain Reaction Labs Inc.

North America was the largest region in the quantum-enhanced homomorphic encryption market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in quantum-enhanced homomorphic encryption report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the quantum-enhanced homomorphic encryption market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The rapid escalation of U.S. tariffs and the resulting trade tensions in spring 2025 are significantly impacting the information technology sector, particularly in hardware manufacturing, data infrastructure, and software deployment. Higher duties on imported semiconductors, circuit boards, and networking equipment have raised production and operational costs for tech firms, cloud service providers, and data centers. Companies relying on globally sourced components for laptops, servers, and consumer electronics are facing longer lead times and increased pricing pressures. In parallel, tariffs on specialized software tools and retaliatory measures from key international markets have disrupted global IT supply chains and reduced overseas demand for U.S.-developed technologies. To navigate these challenges, the sector is accelerating investments in domestic chip fabrication, diversifying supplier bases, and adopting AI-driven automation to enhance operational resilience and cost efficiency.

Quantum-enhanced homomorphic encryption is a sophisticated cryptographic method that utilizes quantum computing capabilities to perform complex calculations on encrypted data without decrypting it, ensuring that the data remains secure throughout processing. This technology is applied in areas such as privacy-preserving data analysis, secure cloud computing, and confidential machine learning, where sensitive information must be handled without exposure.

The core components of quantum-enhanced homomorphic encryption include software, hardware, and services. Software consists of programs, instructions, and data that allow computers or digital devices to execute specific tasks. Deployment options include on-premises and cloud-based setups, while the technology serves enterprises of various sizes, from small and medium businesses to large organizations. Its applications span multiple sectors, including banking and finance, healthcare, government, defense, IT and telecommunications, retail, and more.

The quantum-enhanced homomorphic encryption market research report is one of a series of new reports that provides quantum-enhanced homomorphic encryption market statistics, including the quantum-enhanced homomorphic encryption industry global market size, regional shares, competitors with the quantum-enhanced homomorphic encryption market share, detailed quantum-enhanced homomorphic encryption market segments, market trends, and opportunities, and any further data you may need to thrive in the quantum-enhanced homomorphic encryption industry. This quantum-enhanced homomorphic encryption market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The quantum-enhanced homomorphic encryption market consists of revenues earned by entities by providing services such as cloud computing services, privacy-preserving healthcare analytics, machine learning as a service, confidential government data processing, and e-commerce personalization. The market value includes the value of related goods sold by the service provider or included within the service offering. The quantum-enhanced homomorphic encryption market also includes sales of trusted execution environments devices, quantum co-processors, secure data storage appliances, and quantum-safe network routers. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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