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Global Defense Electronics Market to Worth US$ 231.30 Billion by 2031: Astute Analytica
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New Delhi, April 17, 2023 (GLOBE NEWSWIRE) — Global defense electronics market reached a value of $138.15 billion in 2022 and is anticipated to achieve a valuation of US$ 231.30 billion by 2031 up from US$ 138.15 billion in 2022, growing at a compound annual growth rate (CAGR) of 6.07% between 2023 and 2031.
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The global market is expected to experience robust growth in the coming years, driven by increasing demand for advanced military technology and rapid technological innovation. Geopolitical tensions and rising defense spending, particularly in emerging markets such as India, China, and Brazil, are expected to drive demand for sophisticated defense electronics systems. Additionally, the increasing adoption of unmanned systems, such as UAVs and UGVs, is expected to fuel growth in the market as companies invest in research and development to create new and innovative defense electronics systems.
The defense electronics market comprises companies that design, develop, manufacture, and market electronic systems and components used in military applications. These products find application in communications, command & control systems, radar & sonar systems, navigation systems, electronic warfare & countermeasures (EW&C), intelligent transportation systems (ITS), and simulation & training. They are used in various platforms such as aircrafts, missiles, satellites, submarines, ships, armored vehicles, and land vehicles.
The market is highly innovative, constantly developing new technologies to meet the changing needs of the military. The sector is also highly competitive, with companies striving to win contracts from the government. The industry has been facing challenges in recent years due to budget cuts and the withdrawal of troops from combat zones.
However, the defense electronics market is subject to stringent regulatory requirements, which can act as a major restraint on growth. Compliance with international regulations can be complex and time-consuming, requiring companies to invest significant resources in compliance programs and export control measures.
Segmental Analysis and Key Findings in Global Defense Electronics Market
By Component: The hardware segment is expected to dominate the defense electronics market with more than 76% revenue share in 2022, due to the critical role of hardware components such as sensors and communication systems in defense electronics systems. The increasing adoption of unmanned systems and the need for advanced sensors and communication systems are expected to drive growth in this segment.
By Equipment Type: The avionics segment is projected to dominate the market with over 36% revenue share in 2022. This is because avionics systems, such as flight control systems, navigation systems, and communication systems, are critical for the functioning of military aircraft and UAVs. The increasing adoption of UAVs and the need for advanced avionics systems to support these platforms are expected to drive growth in this segment.
By Usage: The air segment is expected to dominate the defense electronics market with 37% revenue share in 2022. This is due to the critical role of air-based defense electronics systems such as aircraft, helicopters, and UAVs in military operations, including reconnaissance, surveillance, and strike operations. The increasing adoption of UAVs and the need for advanced air-based defense electronics systems to support these platforms are expected to drive growth in this segment.
By Application: The C2/BM (command and control/ballistic missile defense) segment is expected to remain the second largest segment of the market with over 16% revenue share in 2022. C2/BM systems are critical for military operations, including command and control, as well as ballistic missile defense. The increasing adoption of unmanned systems and the need for advanced C2/BM systems to support these platforms are expected to drive growth in this segment.
Electronic Warfare: The Fast-Growing and Lucrative Segment in the Global Defense Electronics Market
Electronic warfare equipment refers to a range of electronic devices and systems that are used to disrupt or disable enemy communication, radar, and weapons systems. This includes electronic countermeasures (ECM), electronic support measures (ESM), and electronic attack (EA) systems. These systems are critical for achieving information dominance in modern warfare and are well-suited for asymmetric warfare.
The demand for electronic warfare systems is high due to the increasing adoption of unmanned systems in military applications. Unmanned systems rely heavily on advanced electronic systems and communication systems, driving demand for new and innovative products in these areas. Additionally, the growing importance of information dominance is driving demand for electronic warfare systems that can disrupt or disable enemy systems, giving militaries a tactical advantage on the battlefield.
The US is the largest electronic warfare equipment producing country in the global defense electronics market, with strong presence of companies like Raytheon, Lockheed Martin, and Northrop Grumman leading the way. The US has a strong defense industry and invests heavily in research and development to create new and advanced defense electronics systems, including electronic warfare equipment.
Looking ahead, the electronic warfare segment is projected to continue its rapid growth, driven by the increasing adoption of unmanned systems, the growing importance of information dominance, and the focus on asymmetric warfare. The segment is projected to generate a revenue of $37 billion by 2031, making it one of the most lucrative segments in the global market.
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Rising Tensions and Modernization Initiatives Drive Explosive Growth in Asia Pacific’s Defense Electronics Market
As per Astute Analytica’s research, the Asia Pacific region is expected to generate more than 17% of the revenue of the global market. The region’s increasing geopolitical tensions and the need to modernize defense systems are key factors driving growth in this market.
Several key economies in the Asia Pacific region are investing heavily in defense electronics to strengthen their military capabilities. China has been ramping up its defense spending significantly in recent years, with a budget of USD 209 billion in 2020, up from USD 174 billion in 2017. Similarly, India increased its defense budget by 7.81% in 2021, reaching a total of USD 66.9 billion. Other countries in the region, such as Japan and South Korea, are also investing heavily in defense electronics to remain at the forefront of military technology.
The Asia Pacific defense electronics market also home to several ongoing conflicts between countries. For example, tensions between China and Taiwan, India and Pakistan, and North Korea and South Korea continue to escalate, driving demand for advanced defense electronics systems. These countries are investing heavily in new defense technologies, including unmanned systems, electronic warfare systems, and advanced communication systems, to gain a strategic advantage in these conflicts.
The region has a large number of defense personnel, with countries like China and India having the largest standing armies in the world. The increasing demand for defense electronics systems in the region is driven by the need to modernize these military forces and equip them with the latest technologies.
The recent trend of Japan starting to allocate budget for defense-on-defense electronics is also impacting the market. Japan has traditionally had a pacifist constitution and has limited its military spending. However, in recent years, Japan has started to increase its defense budget and has allocated funds for the development of advanced defense electronics systems. This has created opportunities for companies in the defense electronics market to expand their operations in Japan and contribute to the growth of the market in the region.
Some of the Top Market Players Are:
- BAE Systems plc
- Bharat Electronics Limited
- Boeing
- General Dynamics
- Hensoldt AG
- Honeywell International Inc.
- Indra Sistemas SA
- L3Harris Technologies Inc
- Leonardo S.p.A.
- Lockheed Martin
- Northrop Grumman Corporation
- Raytheon
- Thales Group
- Other Prominent Players
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About Astute Analytica
Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.
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