Will the next valuable electronics companies be open source?

This article originally appeared in the March'25 magazine issue of Electronic Specifier Design – see ES's Magazine Archives for more featured publications.

Written by Mateja Lampe Rupnik, CEO, Red Pitaya

If open source software has driven innovation in every industry, why should hardware be any different? The shift toward open hardware is already underway. Companies that embrace this shift will define the next wave of industrial innovation. Those that don’t will face the same fate as others before them – products that become obsolete too fast, rising production costs, and an inability to keep up with changing market demands.

Take VanMoof as an example. The Dutch e-bike company once promised to revolutionise urban mobility but locked its products into a proprietary system that only it could service. When the company declared bankruptcy, owners of these expensive e-bikes were left stranded. Now, under new ownership, VanMoof is outsourcing repairs to third parties. The takeaway is clear – openness is not a weakness. It is a long-term strategy for resilience.

The same lesson applies to electronics. Statista predicts the global electronics market will reach $536.30 billion in 2025, growing at a CAGR of 7.35% through 2029, with three billion users worldwide. Despite this growth, supply chain disruptions, rising costs, and regulatory pressures are forcing companies to rethink their approach. Open source hardware provides an alternative. Instead of relying on proprietary, hard-to-source components, companies can build electronics that are adaptable, repairable, and supported by a global community of engineers.

The shift is already happening. Open source electronics platforms are proving that innovation doesn’t have to be locked behind closed doors. Raspberry Pi’s recent IPO highlights that open-source business models are not just commercially viable but also attractive to investors in public markets. Raspberry Pi has reshaped computing, giving engineers, students, and businesses access to powerful, low-cost development tools. Red Pitaya has built an accessible, software-defined alternative to expensive, closed instrumentation – embracing open approaches where it makes sense. Both companies, together with Arduino, are making a strong shift from DIY and academic-focused products into industrial applications, where demand for flexible, open approaches to hardware is rapidly expanding.

Fairphone is taking a different approach to consumer electronics by designing modular smartphones with replaceable components. Unlike Apple and other major brands that limit independent repairs and software updates, Fairphone enables users to swap out batteries, cameras, and other parts, extending the device's lifespan. A similar shift is emerging in the automotive sector, where Rivian and Lucid Motors are prioritising repairability and customisation in contrast to Tesla’s closed ecosystem. Meanwhile, new right-to-repair laws in the US and EU are adding further pressure, forcing manufacturers to reconsider their approach.

In theory, this challenges the industry’s reliance on planned obsolescence. But do these companies have the scale, production efficiency, and brand dominance to truly challenge industry giants? While their models align with growing consumer demand for repairable and upgradeable products, their ability to disrupt Tesla or Apple is low–for now. Will they remain niche alternatives, or could regulatory changes and shifting market expectations eventually push the entire industry toward more open, serviceable designs?

The beauty of open source lies in its collaborative nature. By sharing schematics, software, and application notes, open source platforms foster a community of innovators who continuously improve and adapt the technology. This collective approach accelerates development cycles and drives industry-wide improvements, allowing even small teams to achieve breakthroughs that were once the exclusive domain of large, well-funded research institutions.

One common argument against open source hardware is security. Critics claim that making designs publicly available exposes products to vulnerabilities. But in reality, open source security works differently. When code and hardware designs are openly shared, they are continuously inspected, tested, and improved by a global community of developers, engineers, and researchers. This ‘many eyes’ approach allows flaws to be identified and fixed faster than in proprietary systems, where vulnerabilities can remain hidden for years. As Bruce Schneier, a leading security expert, puts it, security is not about secrecy, it’s about transparency. Open source hardware follows this principle – its openness is not a weakness but a strength that fosters resilience, reliability, and trust.

This transparency is why even the world’s most advanced institutions and companies rely on open-access, adaptable hardware. Red Pitaya’s STEMlab has been used worldwide – by NASA, CERN, MIT, Bosch, Siemens, and many others. Engineers have customised it for RF testing, industrial automation, LiDAR sensing, and beyond. Now, with Gen2 to be announced at the Embedded Conference in March, Red Pitaya is expanding its reach even further into industrial applications.

The semiconductor industry is also undergoing a shift toward more open, flexible, and modular hardware. Projected to reach $68.44 billion in revenue in Europe by 2025 (Statista), the industry’s growth is being fuelled by the increasing demand for customisable components that can adapt to evolving technological needs. For years, developers were locked into proprietary CPU architectures like Arm, limiting flexibility and creating dependency on expensive licensing models. But RISC-V, an open source instruction set architecture, is changing that. By eliminating vendor lock-in and allowing companies to design custom chips without licensing fees, RISC-V is driving a wave of innovation across industries – from AI accelerators to embedded computing. With companies like Qualcomm, Western Digital, or Alibaba Cloud integrating RISC-V into their products, open hardware is becoming a core part of the semiconductor industry's evolution.

AI is facing the same open vs. closed debate. While OpenAI’s ChatGPT remains proprietary, Meta has taken a different approach with its open source LLaMA models. The recent turmoil in the AI industry only underscores this tension. NVIDIA’s stock took a hit after DeepSeek-V2 demonstrated that powerful AI models could be developed with significantly less processing power, disrupting assumptions about who holds the edge in AI. This case proves that open source initiatives have the potential to challenge even the biggest giants, though who will ultimately lead the AI revolution remains to be seen. The question now is whether AI should follow the path of open source software and hardware, enabling broader innovation and scrutiny, or whether closed models will dominate.

In a world of rapid technological change, businesses need hardware that can evolve alongside new demands. The traditional model of fixed-function electronics, locked into rigid supply chains, is no longer viable. Open source hardware offers a solution – allowing companies to build adaptable, upgradeable products that remain relevant rather than becoming obsolete. By removing dependence on proprietary ecosystems, businesses can innovate faster and respond more effectively to market shifts.

The electronics industry is reaching an inflection point. Proprietary systems dominate today, and they offer advantages – particularly in user experience, standardisation, and seamless ecosystems. But the trade-offs are becoming harder to ignore. Companies that double down on closed ecosystems will continue to face higher costs, supply chain risks, and increasing pressure from consumers and regulators. Meanwhile, those that embrace open source design, repairability, and modularity are creating a different kind of value – one that prioritises longevity, adaptability, and innovation at scale. The question is not whether open source hardware will become dominant overnight, but rather how much of the industry will be forced to adopt its principles to stay competitive.