Defense Electronic Market

Defense Electronic Market Outlook for 2024 to 2034

The Defense Electronic Market size is estimated to garner a valuation of USD 178 billion in 2024. The adoption of defense electronic is likely to rise at a CAGR of 5.8% through 2034.

Heightened geopolitical tensions and security threats drive the demand for advanced defense electronics. Countries seek to enhance their military capabilities, leading to increased investments in cutting-edge electronic warfare systems, communication devices, and surveillance equipment.

The defense electronic industry is projected to reach USD 311.5 billion by 2034. Many countries are undertaking military modernization initiatives to upgrade their defense capabilities with state-of-the-art electronic systems.

This includes the procurement of advanced radar systems, missile defense systems, unmanned aerial vehicles (UAVs), and electronic countermeasure (ECM) systems.

Demand Analysis of the Defense Electronic

• The overall increase in defense spending by governments globally contributes to the demand for defense electronics. Countries allocate significant budgets for defense procurement programs, including electronic warfare systems, surveillance technologies, and command and control systems, driving market growth.
• Governments are investing in modernizing their defense forces, which includes upgrading existing equipment and incorporating advanced electronic systems. This drives the demand for state-of-the-art defense electronics such as radars, communication systems, electronic warfare systems, and surveillance equipment.
• Defense electronics often have dual-use applications, serving both military and civilian purposes. Companies leverage advancements made in the commercial electronics sector and adapt them for defense applications, driving innovation and cost-effectiveness.

Attributes	Details
Defense Electronic Market Value for 2024	USD 178 billion
Defense Electronic Market Value for 2034	USD 311.5 billion
Defense Electronic Market Forecast CAGR for 2024 to 2034	5.8%

Historical Performance and Future Growth of the Defense Electronic Market

Historical CAGR	7.5%
Forecast CAGR	5.8%

The historical performance of the defense electronic market has been characterized by a steady CAGR of 7.5%, reflecting strong demand for advanced electronic systems and equipment in the defense sector. However, the forecasted CAGR of 5.8% indicates a slight decrease in growth rate compared to previous years.

• The defense electronic market has witnessed significant technological advancements, leading to a saturation point where incremental innovations yield diminishing returns.
• Many governments and defense agencies are facing budget constraints and fiscal pressures, leading to reduced defense spending in some regions. This has directly impacted the demand for defense electronic systems and equipment, resulting in a lower growth rate for the market.

Key Trends Influencing the Defense Electronic Market

Shift Towards Digitization and Network-Centric Warfare

Defense electronics are evolving towards digitization and network-centric warfare paradigms, where interconnected systems facilitate real-time data sharing and decision-making on the battlefield.

This trend drives the adoption of advanced sensors, communication systems, and command-and-control technologies to enhance situational awareness and operational effectiveness.

Increased Emphasis on Cybersecurity

With the growing threat of cyberattacks, there is a heightened focus on cybersecurity measures within defense electronic systems. This includes the integration of robust encryption algorithms, intrusion detection systems, and secure communication protocols to safeguard sensitive data and prevent unauthorized access to military networks and assets.

Demand for Autonomous and Unmanned Systems

The demand for autonomous and unmanned systems in defense operations is driving innovation in defense electronics. These systems leverage technologies such as artificial intelligence, machine learning, and autonomous navigation to perform various tasks autonomously, ranging from surveillance and reconnaissance to logistics and combat missions.

Integration of Multi-Domain Capabilities

Modern defense electronic systems are designed to operate across multiple domains, including land, sea, air, space, and cyberspace. This integration of multi-domain capabilities enables seamless coordination and interoperability among different branches of the military, enhancing overall operational efficiency and mission success.

Category-wise Insights

This section provides detailed insights into specific categories in the defense electronic industry. The navigation, communication, and display vertical segment emerge as a top contender, witnessing sustained growth at a slightly decreased rate.

Similarly, the airborne platform segment shows promising growth prospects, indicating a rise in demand for defense electronic systems in aerial applications.

Navigation, Communication, and Display Turns into a Top Vertical Segment in 2024

Top Vertical	Navigation, Communication, and Display
CAGR % 2019 to 2023	7.3%
CAGR % 2024 to 2034	5.6%

The navigation, communication, and display segment is anticipated to record a rise in demand with a CAGR of 5.6% through 2034.

• Advancements in navigation systems, secure communication technologies, and high-resolution displays are crucial for enhanced situational awareness and decision-making on the battlefield.
• Integration with C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance) systems fosters real-time information sharing and coordinated operations.
• NCD plays a pivotal role in enabling the effective operation of autonomous vehicles, drones, and other unmanned systems.
• Growing threats necessitate robust cybersecurity measures within NCD systems to ensure data integrity and system resilience.

Airborne to Take a Lead in Platforms Segment in 2024

Top Platforms	Airborne
CAGR % 2019 to 2023	7.1%
CAGR % 2024 to 2034	5.4%

The airborne segment to register a steady CAGR of 5.4% through 2034.

• Continued reliance on air superiority for various missions, from intelligence gathering to combat operations, drives demand for sophisticated airborne electronics.
• Integration of advanced sensors, radar systems, and electronic warfare capabilities enhances situational awareness and combat effectiveness.
• The increasing use of UAVs for surveillance, reconnaissance, and attack missions fuels the demand for miniaturized and reliable electronics.
• Emerging technologies like hypersonic missiles and directed energy weapons create new frontiers for airborne electronic systems development.

Country-wise Insights

The section analyzes the defense electronic market across key countries, including the United States, United Kingdom, China, Japan, and South Korea. The analysis delves into the specific factors driving the demand, adoption, and sales of defense electronics in these countries.

Countries	CAGR
United States	6.0%
United Kingdom	7.0%
China	6.4%
Japan	7.3%
South Korea	8.0%

Defense Electronic Industry in the United States

The defense electronic industry in the United States is anticipated to rise at a CAGR of 6.0% through 2034.

• One of the highest defense budget fuels in the United States is investment in advanced electronics for modernization and technological edge.
• Emphasis on C4ISR and interoperability drives demand for integrated communication and data analysis systems.
• Growing reliance on drones and autonomous vehicles necessitates miniaturized and reliable electronics.
• Heightened concerns over cyber threats lead to increased investment in secure communication and data protection solutions.
• Growing importance of space-based operations fuels the demand for advanced satellite communication and surveillance systems.

Defense Electronic Industry in the United Kingdom

The defense electronic industry in the United Kingdom is projected to rise at a CAGR of 7.0% through 2034.

• Focus on upgrading aging defense equipment creates opportunities for new electronic systems and technology integration.
• Potential shifts in defense priorities and partnerships could drive demand for specific electronic capabilities.
• Continued development and upgrades for this key fighter jet generate demand for advanced avionics and communication systems.
• Partnerships with international allies on cyber defense initiatives create collaboration opportunities.
• Growing use of UAVs for various missions boosts demand for related electronic solutions.

Defense Electronic Industry in China

China’s defense electronic industry is likely to witness expansion at a CAGR of 6.4% through 2034.

• Significant investments in developing indigenous defense technologies fuel growth in the domestic electronics industry.
• Emphasis on reducing reliance on foreign technologies creates opportunities for local players.
• Investments in naval capabilities drive demand for advanced shipborne electronics and communication systems.
• Development of space exploration and hypersonic weapons programs necessitate advanced electronic components.
• Increasing awareness of cyber threats leads to investments in domestic cybersecurity solutions.

Defense Electronic Industry in Japan

Japan's defense electronic industry is projected to rise at a CAGR of 7.3% through 2034.

• Growing concerns about regional security threats stimulate demand for advanced defense electronics.
• Government initiatives promote the development and adoption of indigenous defense technologies.
• Collaboration with international partners on cyber defense strengthens capabilities.
• Growing presence in the international defense market creates export opportunities for Japan’s defense electronics.

Defense Electronic Industry in South Korea

The defense electronic industry in South Korea is anticipated to witness expansion at a CAGR of 8.0% through 2034.

• Strong emphasis on developing a self-sufficient defense industry creates opportunities for local players.
• Growing awareness of cyber threats leads to investments in robust cybersecurity solutions.
• Development of indigenous UAVs and other unmanned systems fuels the demand for related electronics.
• South Korea aims to become a major defense exporter, creating opportunities for its defense electronics industry.

Competition Outlook of the Defense Electronic Industry

Companies in the defense electronic industry are continuously investing in research and development to innovate and develop state-of-the-art electronic systems, including radar systems, communication equipment, and electronic warfare systems, to maintain a competitive edge.

Key players are implementing aggressive market expansion strategies to broaden their global footprint and penetrate emerging markets.

With the increasing digitization of defense systems, cybersecurity has become a critical concern for governments and defense organizations. Leading companies in the defense electronic industry are investing heavily in cybersecurity solutions to protect sensitive data, networks, and communication systems from cyber threats and attacks.

The defense electronic industry is focused on building resilient supply chains to mitigate risks associated with disruptions, geopolitical tensions, and supply chain vulnerabilities. Companies are diversifying their supplier base, investing in redundancy measures, and adopting digital technologies to enhance supply chain visibility and agility.

Leading companies are investing in AI-driven solutions for intelligence analysis, autonomous vehicles, and predictive maintenance, driving innovation and efficiency in the defense sector.

Recent Developments in the Defense Electronic Industry

• BAE Systems has partnered with Elbit Systems of America, Curtiss-Wright Corporation, and QinetiQ Inc. for the United States Army’s Optionally Manned Fighting Vehicle (OMFV) design program. Together, they aim to produce an innovative, purpose-built, next-generation combat vehicle that meets the United States Army’s requirements for agility, lethality, and survivability.
• Curtiss-Wright Corporation is collaborating with BAE Systems on the OMFV project, contributing to the MOSA design and providing vital electronics and control systems for combat vehicles.
• Elbit Systems of America, a subsidiary of Elbit Systems Ltd., is a key partner in the OMFV project. They are providing their versatile 50mm Unmanned Turret (UT50), which recently demonstrated successful live fire capabilities at the Aberdeen Test Center.
• General Dynamics Ordnance and Tactical Systems is a step closer to being awarded a sole-source contract for upgrading the Active Protection Systems (APS) of the United States Army’s Bradley Fighting Vehicles.

Key Companies in the Market

• Cobham Limited
• Bae Systems
• Curtiss-Wright Corporation
• Elbit Systems Ltd
• General Dynamics Corporation

Key Segments

By Vertical:

• Navigation, Communication, and Display
• C4ISR
• Electronic Warefare
• Radars
• Optronics

By Platforms:

• Airborne
• Marine
• Land
• Space

By Region:

• North America
• Latin America
• Europe
• East Asia
• South Asia
• Oceania
• Middle East and Africa

Frequently Asked Questions

What is the Market Potential for Defense Electronic?

The defense electronic market is projected to expand at a CAGR of 5.8% between 2024 and 2034.

Which Vertical Segment Dominates the Defense Electronic Market?

The navigation, communication, and display segment dominates the defense electronic industry.

Who are the Top Three Defense Electronic Manufacturers?

The top 3 defense electronic manufacturers are Cobham Limited, Bae Systems, and Curtiss-Wright Corporation.

What is the Defense Electronic Market Growth Outlook for 2034?

The defense electronic market is anticipated to surpass USD 311.5 billion by 2034.

Which Key Trend Drives the Demand for Defense Electronic?

The integration of advanced sensor technologies is a key trend driving the demand for defense electronics.

Why Does the Airborne Segment Hold a Dominant Share in the Defense Electronic Industry?

Due to the increasing deployment of aerial platforms for surveillance and combat operations.