Electro Optical System Market

Electro Optical System Market Snapshot (2023 to 2033)

The global electro optical system market is anticipated to be worth USD 12,064.2 million in 2023, expected to reach USD 18,794.6 million by 2033. From 2023 to 2033, the market is projected to exhibit a CAGR of 4.5%. However, the CAGR was valued at 2.4% from 2018 to 2022. Increasing demand for safety and security and the growing need for a developed defense system is expected to benefit the market during the forecast period.

Data Points	Key Statistics
Base Year Value (2022)	USD 11,724.2 million
Projected Market Value (2023)	USD 12,064.2 million
Anticipated Forecast Value (2033)	USD 18,794.6 million
Estimated Growth Rate (2023 to 2033)	4.5%

The defense segment is expected to acquire substantial traction. The increased need for technologically superior security and surveillance systems as a result of escalating insurgency incidents can be contributed to the segment's expansion. Another aspect driving the segment's expansion is rising military spending throughout the world.

In July 2022, officials from the United States Defence Logistics Agency Land and Maritime segment in Aberdeen, Md, announced a contract for MX-11769 image-intensifier tubes with the L3Harris Integrated Vision Solutions segment in Tempe, Ariz., and the Elbit Systems of America Night Vision segment in Roanoke, Va. The electro-optical image-intensifier tube has a continuous life of 12,000 hours.

The image intensifier is a third-generation 18-millimeter for the AN/PVS-14 night-vision monocular and many weapon sights. It is also a component of the United States Army Enhance Night Vision Goggle-Binocular (ENVG-B). Such market advancements are expected to increase market size throughout the forecast period.

Electro Optical System Demand Analysis (2018 to 2022) Vs. (2023 to 2033) Outlook

The global demand for electro optical systems recorded a CAGR of 2.4% during the historical period, reaching around USD 10,642.3 million in 2018, according to a report from Future Market Insights (FMI). The growing concern for safety and security, as well as the requirement for sophisticated military systems and equipment, are the key drivers driving the global expansion of the electro optical system market.

With an increase in different forms of assaults, images in decision-making processes are becoming increasingly important, encouraging the usage of electro-optics technologies to counter the expanding security risks better and speed up the decision-making process. As a result, the armed services must develop a modern electro optical system capable of dealing with security concerns.

Furthermore, electro optical systems are utilized for non-destructive testing in the aerospace industry, and border protection organizations use these systems to monitor an incursion attempt. As terrorist activities increase across various locations, there is an enormous requirement for enhanced surveillance systems and the necessity to avoid terrorist organization penetration efforts, driving the market ahead.

Which are Some Prominent Drivers of Electro Optical System Market?

Increased Purchase of Sophisticated UAVS with Integrated Electro-Optical Systems

Increasing procurement of advanced unmanned aerial vehicles (UAVs) with integrated electro-optical systems is expected to play a significant role in driving the market during the forecast period. The application of unmanned vehicles is expanding for various commercial and military purposes such as navigation, surveillance, policing, photography, and agricultural monitoring.

Also, ongoing developments in electro-optic systems are projected to offer remunerative opportunities to the market. For instance, they have enabled 24-hour situational awareness, guidance for defense gunnery, automated object detection, and 360-degree rotation, among others. Such factors are expected to benefit the industry growth during the forecast period.

Additionally, acquisitions among players are expected to strengthen the industry's growth in the assessment period. For instance, in March 2019, FLIR Systems Inc. announced that it had completed its previously announced acquisition of Endeavor Robotic Holdings, Inc., a pioneer of battle-tested, tactical unmanned ground vehicles (UGVs) for the global military, public safety, and infrastructure markets, from Arlington Capital Partners. Thus, the market is projected to grow notably in the assessment period.

What are the Challenges Faced by the Electro Optical System Market?

Short Lifespan is likely to hinder the Market Growth

The electro-optical system has a lifespan of 15-20 years, depending on how it is used in real time. Military equipment is only updated once the system's life cycle has ended. During the projected period, this is likely to be a substantial restraint on the market.

However, several advantages provided by the equipment, such as poor visibility, low light cameras, and others, are expected to drive market expansion in the approaching years.

Region-wise Insights

Why is North America Expected to Dominate The Global Electro-Optical System Market?

Rising Use of Technologically Superior UAVs Creating Opportunities for Electro Optical System Manufacturers

North America is likely to lead the market over the projection period, according to the report. In 2022, the region recorded a market share of 29.3% of the worldwide market.

The rising use of technologically superior UAVs can be ascribed to the market's dominance. Furthermore, the deployment of advanced UAVs for surveillance is expected to benefit the regional market throughout the projection period. Furthermore, the United States Army is expected to be the largest equipment buyer in the region.

For example, the United States Army granted L3 Technologies a contract in July 2020 to provide an upgraded next-generation WESCAM MX 10D electro-optical, laser designator, and infrared system to enhance Tactical Unmanned Air System Shadow UAV (RQ-7Bv2). As a result, the regional market is expected to grow considerably throughout the forecast period.

What Role Does Europe Play in the Global Electro Optical System Market?

European Government's Expanding Measures Favouring Market Growth

During the projection period, Europe is expected to be the second-leading market. The region accounted for around 23.1% of overall revenue in 2022. The European government's expanding measures are expected to drive regional market development.

In July 2019, NASA, for example, sent electro-optical test devices for future European Euclid dark energy space research. The Euclid space mission of the European Space Agency (ESA) is scheduled to launch in 2022. These measures are expected to boost the regional market in the near future.

What is Asia Pacific's Position in the Global Electro Optical System Market?

Expansion of the Armed Forces Fuelling Rapid Adoption

According to the report, Asia Pacific may be the fastest-growing regional market throughout the projection period. The rapid rise of the armed forces industry may be linked to the region's growth. Increasing the engagement of regional companies is also expected to be a driving force in the regional market.

For example, Elbit Systems Ltd. stated in May 2022 that it had been given a contract for USD 69 million to offer Electronic Warfare (EQ) capabilities to a government in the Asia Pacific. As a result of such factors, the regional market is expected to expand considerably throughout the assessment period.

Category-wise Insights

What is the Chief Application Platform in the Electro Optical System in Residential Sectors?

Air Electro Optical System to Have a Massive Demand

The market is further divided into air electro optical systems, land electro optical systems, and sea electro optical systems. In 2022, the air electro optical system may dominate the worldwide market, with a revenue share of roughly two-fourths of the market. The rising need for defense systems for enhanced security and surveillance systems is driving segment expansion.

Furthermore, the growing use of these systems in UAV applications is expected to boost sector expansion throughout the projection period. On the other hand, the land electro optical system is expected to develop at the fastest CAGR over the projection period.

Start-ups for Electro Optical System Market

Some market's developing players are EXSEED SPACE, Skyroot Aerospace, Pixxel, EARTH2ORBIT (E2O), Boom Supersonic, Blue Origin, Lilium, Dhruva Space, LeoLabs, Relativity Space, and DJI.

• Dhruva Space, an Indian firm, received USD 27 68.306 billion in October 2021 from Mumbai Angels Network, Indian Angel Network, Blue Ashva, and other notable investors. Dhruva Space plans to use the cash to expand its present product line in the Space, Launch, and Ground Sector. As a result, startups may play an important role in the market's development over the forecast period.
• Lockheed Martin successfully deployed the 500th Electro-Optical Targeting System (EOTS) in June 2019. The EOTS is the first sensor in the world to integrate forward-looking infrared and infrared search and track functionality, giving F-35 pilots the ability to target accurately from the air and the ground.
• In March 2019, FLIR Systems, Inc. announced that it had successfully acquired Endeavour Robotic Holdings, Inc. from Arlington Capital Partners. Endeavour Robotic Holdings, Inc. is a leading manufacturer of tactical unmanned ground vehicles (UGVs) for the global military, public safety, and critical infrastructure markets.

Market Competition

Intro, Lockheed Martin, L3 Communication Holdings, BAE Systems Plc, Northrop Grumman, and DRS Technologies are key participants in the worldwide electro-optic system market. The following are recent developments in the global electro optical system market:

• In April 2022, L3 Harris Technologies announced a prospective USD 500 million contract to develop and manufacture a wide-field-of-view electro-optical system to protect surface warships against new adversary anti-ship cruise missiles.
• In September 2020, Lockheed Martin Corporation, located in Maryland, United States, stated that it had delivered the 700th Electro-Optical Targeting System for the F-35 Lightning II.

Report Scope

Report Attribute	Details
Market Value in 2023	USD 12,064.2 million
Market Value in 2033	USD 18,794.6 million
Growth Rate	CAGR of 4.5% from 2023 to 2033
Base Year for Estimation	2022
Historical Data	2018 to 2022
Forecast Period	2023 to 2033
Quantitative Units	Revenue in USD million and CAGR from 2023 to 2033
Report Coverage	Revenue Forecast, Volume Forecast, Company Ranking, Competitive Landscape, Growth Factors, Trends, and Pricing Analysis
Segments Covered	Systems, Application Platform, Region
Regions Covered	North America; Latin America; Europe; Asia Pacific; The Middle East and Africa
Key Countries Profiled	United States, Canada, Mexico, Brazil, Mexico, Germany, United Kingdom, France, Spain, Italy, China, Japan, South Korea, India, Malaysia, Singapore, Australia, New Zealand, GCC, South Africa, Israel
Key Companies Profiled	Intro; Lockheed Martin; Raytheon Company; Textron Systems Corporation; L3 Communication Holdings; BAE Systems Plc.; Northrop Grumman; DRS Technologies; Thales S.A; Safran S.A; Rheinmetall AG
Customization	Available Upon Request

Key Segments Profiled in the Electro Optical System Industry Survey

Electro Optical System Market by Systems :

• Imaging Electro Optical System
• Non-Imaging Electro Optical System

Electro Optical System Market by Application Platform :

• Air Electro Optical System
• Land Electro Optical System
• Sea Electro Optical System

Electro Optical System Market by Region :

• North America
• Latin America
• Europe
• Asia Pacific
• The Middle East & Africa

Frequently Asked Questions

How Big is the Electro Optical System Market?

The market is valued at USD 12,264.2 million in 2023.

Who are the Key Electro Optical System Market Players?

Lockheed Martin, Thales, and FLIR Systems are key market players.

Which Industry is the Key Consumer of the Electro Optical System Market?

The primary consumer is the defense industry.

How Big Will the Electro Optical System Market by 2033?

The market is estimated to reach USD 18,794.6 million by 2033.

What is the Growth Forecast for the Electro Optical System Market?

The market is forecast to register a CAGR of 4.5% through 2033.