Market Trends of Air-based Military Electro-optical And Infrared Systems Industry
Hyper-spectral Segment is Projected to Showcase Highest Growth During the Forecast Period
More advanced airborne electro-optics and infrared systems are needed more than ever, owing to the rise in conflicts, terrorism, border clashes, etc. The growth of this segment is expected to increase due to rising military expenditure and various modernization efforts by major global powers. For instance, in 2023, the global military expenditure reached USD 2,443 billion; this was a growth of 6.8% from the year 2022. Additionally, various governments and OEMs across the world are investing in the procurement and development of advanced aircraft with hyperspectral imaging systems to address the surveillance, reconnaissance, and airborne early warning needs of their air forces. For instance, in April 2023, RTX Corporation unveiled its next-generation electro-optical intelligent-sensing system called RAIVEN. The RAIVEN system uses artificial intelligence, hyperspectral imaging, light detection, and ranging technologies to allow military pilots to detect threats faster and more accurately.
Furthermore, several companies are developing advanced hyperspectral imaging technology for drones, specifically in ISR applications. This is because drones are considered more stealthy than military aircraft for performing ISR missions successfully. For instance, in March 2023, Australian company Arkeus unveiled its Hyperspectral Optical Radar (HSOR), a real-time autonomous wide-area hyperspectral sensor for ISR applications for drones and manned aircraft. This technology was developed under a contract from the Australian DoD. Such developments are expected to drive the demand for this segment during the forecast period.
Asia-Pacific to Exhibit the Highest Growth Rate During the Forecast Period
Asia-Pacific is marked by the presence of countries such as China, Japan, South Korea, India, etc., that have some of the most significant defense budgets in the world. China and India are significantly increasing their defense spending on developing, upgrading, and modernizing their aircraft fleet. The military stand-offs between neighboring nations, tensions at the South China Sea, and the growing nuclear threats in the region have led to the increasing procurement of aerial systems by several countries in Asia-Pacific. For instance, in November 2023, the Indian MoD approved defense acquisition projects worth INR 2.23 lakh crore (USD 26 billion), including procuring 97 Tejas light combat aircraft and 156 Prachand combat helicopters. The delivery of these aircraft is expected to start in 2024.
In addition, these countries are also investing in developing advanced EO/IR systems to cater to the demand driven by modern warfare. For instance, in February 2023, Bharat Electronics Limited (BEL) displayed its short wave infra-red (SWIR) REV III multisensor optical payload for the Dhruv Mk III light helicopter at the Aero India 2023. The Dhruv Mk III was inducted into the Indian Army in mid-2022. The optical payload can be used for multispectral electro-optical intelligence, surveillance, target acquisition, and reconnaissance. Similarly, in August 2023, the US government agreed to supply infrared search and track systems for Taiwan’s fleet of F-16 Falcon Jets under the Foreign Military Sales agreement of USD 500 million. Such developments are propelling the growth of the air-based military electro-optical and infrared systems market in the Asia-Pacific region.
