Defense Electronics Market Size

Market Size Snapshot

Note – Market size depicts the revenue generated over the financial year

The market for defense electronics is expected to grow steadily, with a current market of $115 billion in 2024 and a forecast of $155 billion in 2035. The compound annual growth rate (CAGR) from 2025 to 2035 is 2.44%. The market is driven by the increase in military budgets of various countries, driven by the tensions between countries and the need for advanced military capabilities. In addition, the integration of advanced technologies such as artificial intelligence, cyber security and advanced communication systems will continue to drive the demand for advanced defense electronics. The main players in the defense electronics market, such as Raytheon, Northrop Grumman and Lockheed Martin, are investing in research and development to enhance their product offerings. The strategic alliances with technology companies and the launch of advanced EW solutions are crucial to maintaining a competitive advantage. The defense electronics market will continue to grow steadily as governments continue to invest in modernization and technological superiority in the defense sector.

Regional Market Size

Regional Deep Dive

The Defense Electronics Market is characterized by rapid technological development and increasing defense budgets across regions. North America, especially the United States, is characterized by a high degree of modernization and the integration of new, advanced technology such as artificial intelligence and cyber defense into defense systems. Europe is characterized by an increase in the number of common defense projects between the individual members of the European Union, while the Asia-Pacific region is characterized by high military spending due to regional tensions. The Middle East and Africa are characterized by increasing defense spending due to increasing geopolitical tensions, while Latin America is characterized by a gradual increase in defense budgets to enhance national security. Each region is characterized by its own political, economic, and cultural conditions that influence the market for defense electronics.

Europe

• The European Union has launched the European Defence Fund (EDF), which allocates significant funding for collaborative defense projects, fostering innovation in defense electronics among member states.
• Countries like Germany and France are enhancing their defense capabilities through joint projects, such as the Future Combat Air System (FCAS), which emphasizes the integration of advanced electronics in next-generation aircraft.

Asia Pacific

• China's military modernization efforts, particularly in developing advanced electronic warfare systems and unmanned aerial vehicles (UAVs), are reshaping the defense electronics landscape in the region.
• India's 'Make in India' initiative is encouraging domestic production of defense electronics, with companies like Bharat Electronics Limited (BEL) leading the charge in developing indigenous defense technologies.

Latin America

• Brazil is increasing its defense budget to modernize its military capabilities, focusing on acquiring advanced defense electronics to enhance national security and regional stability.
• Countries like Colombia are collaborating with international defense firms to develop local capabilities in defense electronics, driven by the need to address internal security challenges.

North America

• The United States Department of Defense has initiated the JADC2 program to integrate the various military branches through the use of advanced electronics and data sharing. This has a strong impact on the defense electronics market.
• Major companies like Raytheon Technologies and Lockheed Martin are investing heavily in R&D for next-generation defense systems, focusing on innovations such as hypersonic weapons and advanced radar systems, which are expected to drive market growth.

Middle East And Africa

• The UAE has invested in advanced defense technologies, including drone systems and cybersecurity, as part of its Vision 2021 initiative, which is expected to enhance the regional defense electronics market.
• Saudi Arabia's Vision 2030 plan includes significant investments in local defense manufacturing, aiming to reduce reliance on foreign suppliers and boost the domestic defense electronics industry.

Did You Know?

“The global defense electronics market is expected to see a significant shift towards unmanned systems, with projections indicating that by 2025, over 30% of military operations will involve unmanned platforms.” — Market Research Future

Segmental Market Size

The defense-electronics market is currently growing steadily. This growth is a result of the growing military budgets and the need for new military equipment. Rising tensions in the world arena, and the need for increased surveillance and communication systems, have also contributed to this growth. Regulatory authorities are also putting pressure on the defense industry to modernize its equipment. The technological developments in the field of artificial intelligence and cyber-security have also influenced the market. The market is currently in the mature phase of implementation, with notable examples being the integration of artificial intelligence in unmanned aerial vehicles by the US Department of Defense, and the initiatives of the European Union in the field of secure communication. The main applications are in the fields of radar, electronic warfare and secure communication, and the main suppliers are Raytheon and Lockheed Martin. The developments in Asia and the Pacific, the rise in defense spending, and the drive for sustainable defense technology are driving this growth. The innovations in the field of software-defined radio and advanced sensors are redefining the operational capabilities of this market.

Future Outlook

The defense electronics market is expected to grow steadily from 2024 to 2035, with a compound annual growth rate of 2.44%, from $115.07 billion to $150 billion. The main growth drivers are the increasing demand for advanced military electronic systems, mainly for better situational awareness, improved communications and the integration of artificial intelligence and machine learning. As countries modernize their military equipment, the share of sophisticated military systems is expected to rise significantly, reaching an estimated 30 percent of the military budget for electronics by 2035, compared to an estimated 25 percent in 2024. Technological drivers influencing the market are the development of radar and sensors, the integration of electronic warfare systems and cyber security solutions. The growing importance of unmanned systems and unmanned vehicles is also expected to spur demand for new military electronics. Moreover, the growing focus on national security and geopolitical tensions are expected to increase the government's investment in modernization programs and create favorable conditions for the market. Emerging trends such as open architecture systems and the use of commercial off-the-shelf (COTS) components will further improve the agility and cost-effectiveness of military electronics, further boosting the market's growth.