Defense Electronics Market Size, Share & Industry Growth Analysis Report by Vertical (Navigation, Communication, and Display (Avionics, Vetronics, Integrated Bridge Systems), C4ISR, Electronic Warfare, Radars, Optronics), Platform (Airborne, Marine, Land, Space) and Region - Global Growth Driver and Industry Forecast to 2028
[386 Pages Report] The Defense Electronics Market is estimated to be USD 220.3 billion in 2023 and is projected to reach USD 289.0 billion by 2028, at a Compound Annual Growth Rate (CAGR) of 5.6% from 2023 to 2028. The Defense Electronics Industry is driven by factors such as strengthening of joint forces by investing in defence electronic systems and increasing need for AI and IoT devices in military operations.
Defense Electronics Market Forecast to 2028
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Defense electronics Market Dynamics:
Drivers: Growing Adoption of Integrated Defense Electronics Technologies
Ground units can dominate the modern battlefield due to new technological advancements, new weapon systems, and enhancements to existing weapon systems. In a time of constrained resources, the military primarily uses digital communications to enhance the informational components of existing weapon systems to maximize integration and sharing of information while denying a prospective adversary equivalent capability. Weapon systems must be converted from analog speech, video, and data transfers to digital coding to increase the amount of real-time information accessible to field commanders. A network connects weapon systems, aerial platforms, surveillance, and communication systems in the digitization of battlefield systems, enabling the exchange of massive volumes of data. Communication systems exchange information between the fighting, combat support, and combat service support functional areas of the battlefield.
Technological developments in military systems and equipment have resulted in significant improvements in defense electronics systems. The use of integrated defense electronics products provides multiple advantages, such as real-time decision-making, remote operations, and reprogramming of systems for defense against new and emerging threats. Defense electronics products, including integrated electronic warfare systems, enable communication with multiple other military defense systems, resulting in better-coordinated operations. Sensors and avionics can also be integrated with electronic warfare systems without undergoing technical changes. This reduces the system integration cost and ensures rapid deployment of the systems on various platforms.
Military aircraft need to be equipped with sophisticated electronic warfare integrated suites, such as anti-jamming devices since electronic jammers can cause the radar or electrical equipment of aircraft to malfunction. Since traditional countermeasure techniques are ineffective and obsolete, militaries are upgrading their aircraft with technologically advanced countermeasure techniques, such as anti-jammers, radar warning receivers (RWRs), laser warning receivers (LWRs), countermeasure dispenser systems (CMDS), and interference mitigation systems. Such benefits associated with the incorporation of integrated defense electronics products in the defense and military sectors contribute to the growth of the defense electronics market.
Restraints: Effect on Execution of Critical Defense Missions Due to Lack if Proper Communication Technology
Defense electronic products include electronic warfare systems, avionics, optronics, communication systems and command & control systems, which collect and transfer high volumes of sensitive data from handheld, electro-optic, and radar. Communicating and distributing such high volumes of data affects processing speeds in real time and could result in delays in decision making, thus threatening the execution of critical defense missions. Sophisticated communication technology infrastructure based on big data and efficient data centers is required to make real-time communication more effective. Such infrastructure requires a substantial investment, which is a major restraint for the defense electronics market.
The current network infrastructure for military forces in various countries across the globe seems to lack the capability to transfer such high amounts of data in real time. A more sophisticated infrastructure is required to facilitate effective real-time communication. Such infrastructure requires high capital investment and will substantially restrict the growth of the defense electronics market. While the implementation of the 5G technology can help, the cost of setting up a communication network and essential infrastructure is considerably high in several countries worldwide.
Opportunities: Increasing Need for AI and IoT Devices in Military Operations
AI and IoT have emerged as complementary technologies that find significant applications in the defense electronics industry for military exercises and critical missions. The constantly expanding network infrastructure and the increasing usage of electronic military devices in the defense sector worldwide will invariably require AI for categorizing, processing, fusing, and analyzing the big data generated. The data produced from defense electronic devices are heterogeneous in nature and require artificial intelligence for analysis. When merged with IoT, AI systems would be especially useful in regulating defense electronic products, including electronic warfare and military devices, by analyzing their transmitted data and controlling their operations to match user requirements. They can also coordinate and synchronize defense electronic products with other devices used in combat operations and efficiently modify their outputs.
AI-based projects deployed in the US defense forces include the Squad X Experimentation Program of Defense Advanced Research Projects Agency (DARPA), the OFFSET program, and Project Maven. Future and modern battlespace environments shaped by innovative technology will involve the growing use of defense electronic products and an integrated approach toward warfighting by combining land, air, space, and naval forces. Such environments will substantially require the implementation of AI and IoT technologies, which will support the growth of the defense electronics market over the projected timeframe. According to an article published in Shepard (UK) in November 2022, Future advancements could depend on cognitive electronic warfare (EW), which uses machine learning and AI to make decisions in microseconds to deal with combat circumstances.
In 2022, a Congressional Research Service publication on the Joint All-Domain Command and Control (JADC2) initiative claimed that crucial decisions in future conflicts must be made in hours, minutes, or seconds rather than over days. This will involve examining the operating environment and giving orders. The JADC2 program is a significant DoD endeavor to gather data streams from thousands of battlefield vehicles, environmental sensors, and other intelligent devices from every military branch. AI and ML provide pertinent data and enable speedy decision-making at the front lines.
Challenges: Increasing Cyberattacks on Trade Secrets and Defense-Related Data
Cyberattacks work best when combined with electronic warfare (EW), disinformation operations, antisatellite attacks, and precision-guided weapons in confrontations involving modern armies. The goal is to produce an operational advantage by deteriorating informational advantage, intangible assets (such as data), communications, intelligence assets, and weapon systems. The most harmful acts would combine cyberattacks and precision-guided bombs to disable or destroy crucial targets. Cyber operations can also be used to undermine decision making by defenders and stir up civil unrest by interfering with government, energy, transportation, and financial services.
Current cybersecurity solutions may fall short in terms of tackling advanced ransomware and spyware threats. Such incidents may affect the defense capabilities of different countries. The defense agencies of various countries across the globe constantly face the threat of cyberattacks. In July 2022, the Belgian government declared that three Chinese hacker gangs, a component of the well-known Chinese APT actors, had attacked Belgian military defense forces and civil services. Trade secrets and intelligence data were stolen by attackers supported by the Chinese government. In June 2022, Soft Cell (UK) released a brand-new remote access trojan (RAT) malware.
The Russia-Ukraine crisis, which started in February 2022, comprised physical combat that caused thousands of people to flee their homes and killed several civilians. According to FortiGuard Labs (US), new viper malware was used to attack Ukrainian targets, and the company found it installed on at least several hundred PCs there. Several Ukrainian organizations have also been the target of sophisticated operations that used the malware strands KillDisk and HermeticWiper, which seem to wipe data off of machines. It was discovered that bogus evacuation plan emails were used to spread Remote Manipulator System (RMS), a tool for remotely controlling devices in Ukraine. A wave of distributed denial-of-service (DDoS) attacks also hit Ukraine. These include interference with the networks of the Ministry of Defense and the military forces.
Industry players are launching new cyber security platforms and solutions to support the growth of the defense electronics market. AI-based cybersecurity solutions can independently gather data from various sources, analyze it, correlate it to the signals indicating cyberattacks, and take relevant actions. However, these solutions are under development, and cyberattacks continue to pose a threat to defense forces. While the innovative solutions and platforms provided by industry players will help reduce and tackle cyberattacks on military databases and devices in the future, the growing number of cyberattacks poses a major challenge to military agencies worldwide.
Defense Electronics Market Ecosystem
Prominent companies in this market include well-established, financially stable providers of defense electronics components. These companies have been operating in the market for several years and offer a diverse product portfolio, state-of-the-art technologies, and strong global sales and marketing networks. Prominent companies in this market include Elbit Systems Ltd. (Israel), Safran SA (France), Cobham Limited (UK), L3 Harris Technologies Inc. (US) and Raytheon Technologies Corporation (US).
Based on Vertical, the Optronics Segment is Projected to Grow at a Second Highest CAGR in the Defense Electronics Market During the Forecast Period.
Based on vertical, the defense electronics market has been segmented into navigation, communication, and display; C4ISR; electronic warfare; radar; optronics. The need to improve aims and intensify sights during operations is driving the optronics segment of defense electronics market.
Based on Platform, the Space Segment is Projected to Grow at a Second Highest CAGR in the Defense Electronics Market During the Forecast Period.
Based on platform, the defense electronics market has been segmented into airborne, marine, land and space. The space segment is expected to grow at a second highest CAGR during the forecast period. The increasing need for fast and secure data transfer and need for assistance in weather monitoring, surveillance & reconnaissance, navigation and communication is driving this segment of the market.
Asia Pacific is Expected to Account for the Highest CAGR in the Forecasted Period and Second Largest Share in 2023.
Asia Pacific is estimated to account for the highest CAGR in forecasted period and second largest share in 2023. The countries in Asia pacific region offer significant opportunities for defense electronics manufacturers as this region has been investing in development of modern technologies and procurement of new platforms. The increased demand for modern technologies and electronic warfare in countries such as Japan, India and China are driving the growth of this region.
Defense Electronics Market by Region
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Key Market Players
Players such as Hensoldt (Germany), Curtiss-Wright Corporation (US), Rafael Advanced Defense Systems Ltd. (Israel), Aselsan AS (Turkey) and Indra Sistemas SA (Spain). The report covers various industry trends and new technological innovations in the defense electronics market for the period, 2020-2028.
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Segment |
Subsegment |
Market size available for years |
2020–2028 |
Base year considered |
2022 |
Forecast period |
2023-2028 |
Forecast units |
Value (USD Billion) |
Segments covered |
By Vertical, Platform |
Geographies covered |
North America, Europe, Asia Pacific, Middle East and RoW |
Companies covered |
Lockheed Martin Corporation (US), Northrop Grumman Corporation (US), Raytheon Technologies Corporation (US), Thales Group (France), and BAE Systems plc (UK) and others. Total 25 Market Players |
Defense Electronics Market Highlights
The study categorizes the Defense Electronics market based on Vertical, Platform and region.
Segment |
Subsegment |
By Vertical |
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By Platform |
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By Region |
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Recent Developments
- In April 2023, The US Navy has given a contract to CAES, a top supplier of mission-critical advanced RF technology, for the AN/ALQ-99 Low Band Consolidation (LBC) transmitter's initial pre-production stage. The AN/ALQ-99 Low Band Transmitter has been modified to become the LBC.
- In March 2023, Raytheon Technologies received a contract from the Space Development Agency to design, develop and deliver a seven-vehicle missile tracking satellite constellation for missile warning and tracking.
- In March 2023, The Swedish Defence Materiel Administration has awarded a contract to Elbit Systems Sweden AB, a subsidiary of Elbit Systems Ltd., to provide the Swedish Army with Technological High Mobility Shelters (THMS). The deal contains opportunities for additional extensions, and it will be carried out over a three-year period.
- In February 2023, The US Marine Corps awarded Northrop Grumman Corporation the initial production and operations contract for the Next Generation Handheld Targeting System (NGHTS). The NGHTS is a portable targeting system that offers high-precision targeting and can function in locations without GPS.
- In February 2023, A Memorandum of Understanding was inked by Thales Group and Bharat Dynamics Limited (BDL), a government-owned company, to establish manufacturing facilities for precision-strike 70mm laser guided rockets (FZ275 LGR) in India. This arrangement will allow BDL to provide a Made in India solution for the Indian Government's current Advanced Light Helicopters (WSI) and Light Combat Helicopter fleet.
Frequently Asked Questions (FAQ):
What is the Current Size of the Defense Electronics Market?
The Defense Electronics Market is projected to grow from an estimated $ 166.7 billion in 2023 to $ 213.2 billion by 2028, at a CAGR of 5.1% from 2023 to 2028.
Who Are the Winners in the Defense Electronics Market?
Raytheon Technologies Corporation (US), Lockheed Martin Corporation (US), Thales Group (France), Northrop Grumman Corporation (US), and BAE Systems plc (UK)are some of the winners in the market.
What Are Some of the Opportunities in the Defense Electronics Market?
Development of new-generation air and missile defense systems and incorporation of satellite-based geospatial analytical and GIS tools are few of the opportunities of the defense electronics market.
What Are Some of the Technological Advancements in the Market?
5G networking for faster data transfer, quantum technologies, advanced materials, and cloud computing among others.
What Are the Factors Driving the Growth of the Market?
Need for enhanced integrated situational awareness to support decision making and growing adoption of integrated defense electronics technologies are some of the key factors driving the growth in the market.
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This research study on the defense electronics market involved the extensive use of secondary sources, directories, and databases, such as Hoovers, Bloomberg BusinessWeek, and Factiva, to identify and collect information relevant to the market. The primary sources included industry experts, service providers, manufacturers, solution providers, technology developers, alliances, and organizations related to all segments of the value chain in this industry. In-depth interviews with various primary respondents, including key industry participants, industry consultants, and C-level executives, were conducted to obtain and verify critical qualitative and quantitative information pertaining to the degaussing system market and to assess its growth prospects.
Secondary Research
The ranking analysis of companies in the defense electronics market was determined using secondary data from paid and unpaid sources and analyzing product portfolios of major companies operating in the market. These companies were rated based on the performance and diversification of their products. Primary sources further validated these data points.
Secondary sources referred for this research study on the defense electronics market included government sources such as the US Department of Defense (DoD); defense budgets; military modernization program documents; corporate filings, such as annual reports, investor presentations, and financial statements; and trade, business, and professional associations. The secondary data was collected and analyzed to arrive at the overall size of the defense electronics market, which was further validated by primary respondents.
Primary Research
Extensive primary research was conducted after obtaining information about the current scenario of the defense electronics market through secondary research. Several primary interviews were conducted through questionnaires, emails, and telephonic interviews with market experts from the demand and supply sides across North America, Europe, Asia Pacific, Middle East, and Rest of the World.
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Market Size Estimation
Top-down and bottom-up approaches were used to estimate and validate the size of the defense electronics market. The research methodology used to evaluate the market size also includes the following:
- Key players in the market were identified through secondary research, and their market values were determined through primary and secondary research. These included a study of annual and financial reports of top market players and extensive interviews with leaders, including CEOs, directors, and marketing executives.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
- All possible parameters that affect the markets covered in this research study were considered, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data. This data was consolidated, added with detailed inputs, and analyzed and presented in this report.
Bottom Up Approach
The bottom-up approach was employed to arrive at the overall size of the defense electronics market by estimating the revenue of key players and their market shares. Calculations based on the revenue of key players identified in the market were used to determine the size of the defense electronics market.
Top Down Approach
In the top-down approach, the overall market size was used to estimate the size of individual segments through percentage splits from secondary and primary research. The immediate parent market size was used to implement the top-down approach for evaluating specific market segments. The bottom-up approach was also implemented to validate the market segment revenues obtained.
Market shares were estimated for each company to verify the revenue shares used in the bottom-up approach. With the data triangulation procedure and data validation through primaries, the overall size of the parent market and each segment was determined and confirmed in this study.
Market Definition
The term defense electronics refers to electronic parts and systems that are created for technological superiority for the defense of a country. To assist mission accomplishment and reduce deaths, systems made from defense electronics offer strong, high-performance electronic detection, electronic protection, and electronic attack capabilities. Defense contractors create greater capability microprocessors, transceivers, power management, photonics, and other component functions to attain cutting-edge capabilities. Some of these parts are designed specifically for use in harsh temperature and vibration conditions in military settings. Various military platforms, such as large and small aircraft, ships, submarines, satellites, handheld gadgets, and land vehicles, can be equipped with these cutting-edge systems.
Key Stakeholders
- Defense Electronics Manufacturers
- Defense Electroic Software Providers
- Technology Support Providers
- System Integrators
- Defense Electronic Componenet Suppliers
Objectives of the Report
- To define, describe, segment, and forecast the size of the defense electronics market based on platform, vertical, and region
- To forecast the size of different segments of the market with respect to various regions, including North America, Europe, Asia Pacific, Middle East, and Rest of the World along with key countries in each of these regions
- To identify and analyze key drivers, opportunities, restraints, and challenges influencing the growth of the defense electronics market
- To identify technology trends currently prevailing in the defense electronics market
- To provide an overview of the tariff and regulatory landscape with respect to the defense electronics regulations across regions
- To analyze micromarkets1 with respect to individual growth trends, prospects, and their contribution to the overall market
- To analyze opportunities in the market for stakeholders by identifying key market trends
- To profile key market players and comprehensively analyze their market shares and core competencies2
- To analyze the degree of competition in the market by identifying key growth strategies, such as new product launches, contracts, partnerships, collaborations, expansions, and agreements, adopted by leading market players
- To identify detailed financial positions, key products, and unique selling points of leading companies in the market
- To provide a detailed competitive landscape of the defense electronics market, along with a ranking analysis, market share analysis, and revenue analysis of key players
Available Customizations
MarketsandMarkets offers the following customizations for this market report:
- Additional country-level analysis of the Defense Electronics market
- Profiling of additional market players (up to 5)
Product Analysis
- Product matrix, which provides a detailed comparison of the product portfolio of each company in the Defense Electronics market
Growth opportunities and latent adjacency in Defense Electronics Market