Military Electro-optical and Infrared Systems Market Size
| Study Period | 2019 - 2029 |
| Market Size (2024) | USD 8.91 Billion |
| Market Size (2029) | USD 10.23 Billion |
| CAGR (2024 - 2029) | 2.80 % |
| Fastest Growing Market | Asia Pacific |
| Largest Market | North America |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Military Electro-optical and Infrared Systems Market Analysis
The Military Electro-optical And Infrared Systems Market size is estimated at USD 8.91 billion in 2024, and is expected to reach USD 10.23 billion by 2029, growing at a CAGR of 2.80% during the forecast period (2024-2029).
- The outbreak of the COVID-19 pandemic and the subsequent shutdowns affected the defense manufacturing sector and the pace of military R&D activities in several countries. The negative impacts of the pandemic were visible in the global defense supply chains, as several programs relied upon a unique global network of part suppliers.
- The market studied is likely to grow steadily during the latter half of the forecast period due to the growing demand for enhanced ISR capabilities for various manned and unmanned systems. These systems make use of electro-optical/infrared (EO/IR) sensors. Countries are progressively adopting these systems to increase their situational awareness.
- However, various design challenges, technological constraints, supply chain risks, the evolving global crisis, and unprecedented factors are projected to restrain the market growth during the forecast period.
Military Electro-optical and Infrared Systems Market Trends
The Sea-based Segment is Expected to Experience the Highest Growth During the Forecast Period
- The sea-based segment of the market is anticipated to register the highest CAGR during the forecast period. The growth of territorial conflicts and border issues increased the risk for maritime assets of militaries, which led to increasing emphasis on surveillance, threat detection, and target identification at sea. As modern combats emphasize these capabilities, armed forces mostly focus on incorporating and integrating sophisticated and advanced sensor systems into their naval vessels.
- Navy vessels need to obtain motion imagery from electro-optical/infrared (EO/IR) sensors that provide day-night and long-range eyes on the target, which improves their ability to identify targets, perform threat assessment, assess intent by the rules of engagement, and support weapon engagement through automatic tracking and fire control solutions through line-of-sight. Thus, the need for better sensor systems that are highly reliable and accurate for maritime patrol to improve sea-based situational awareness has increased.
- In addition, as the naval vessels are isolated from the terrain, it becomes important for them to possess advanced threat detection and countermeasure systems for their long-time survival from impending threats. This is driving the growth of research and development in these sea-based EO/IR sensors currently. Several nations are upgrading their naval EO/IR sensor systems. For instance,
- In March 2022, the Japan Maritime Self-Defense Force (JMSDF) commissioned a new stealth frigate into service. One notable feature is an advanced integrated combat information center developed by Mitsubishi Heavy Industries. This system has a large circular screen where operators may view all navigation, propulsion, tracking, and fire control data. The same system provides the crew 360 degrees of visibility through cameras, enabling them to see the areas around the ship without any blind spots. The remaining essential systems include an APY-2 active electronically scanned array (AESA) X-band radar, fixed and towed sonars, and an OAX-3 EO/IR sensor. Mitsubishi Electric supplied the radar and the EO/IR sensor.
- In June 2022, US Navy selected a team led by L3Harris Technologies to deliver a Shipboard Panoramic Electro-Optic/Infrared (SPEIR) system for enhancing fleet protection. The initial value of the contract is USD 205 million, with a ceiling value of USD 593 million if all the options are exercised until March 2031.
- The SPEIR program marks a generational leap in using 360-degree electro-optic and infrared (EO/IR) imagery and situational awareness, as well as improved EO/IR sensors - from a weapon support sensor to a completely passive mission solution capability. Such developments are expected to bolster the sea-based segment prospects in the future.
North America Held Highest Shares in the Market
- North America held the largest share, primarily due to high demand from the US armed forces for EO/IR systems. The enhanced capabilities of adversaries on the battlefield forced the US to increase its investment in technologically advanced weapon systems. Furthermore, the growing involvement of the US armed forces in various global conflicts significantly contributed to the increased procurement of advanced ISR and other systems that enhance the situational awareness of the military.
- In July 2022, the US House of Representatives recently approved the nation's USD 840 billion defense budget for the next fiscal year, which begins on October 1, 2023, for enhancing the mission readiness of various armed forces of the country. This will increase the Pentagon budget by USD 37 billion, focusing on providing funds to Ukraine's military, competing with China, and addressing the issues of Afghanistan's military withdrawal. Meanwhile, in April 2022, the US House of Representatives approved legislation that loosened the criteria for defense equipment lend-lease agreements with war-torn Ukraine and other countries in Eastern Europe, paving the path for more US weapons to enter the region.
- In February 2022, the US Army announced its plans for a next-generation laser target locator. The Defence Blog website reported that a branch of the Army's acquisition agency is reaching out to the industry to determine vendors' ability to produce and deliver a self-contained Laser Target Locator Module III (LTLM III) that meets updated performance requirements. The PdM SPTD is considering a competitively awarded contract in the first quarter of the fiscal year 2023 and is seeking information from interested companies on their demonstrated ability to meet the requirements for the new locator module within the stated timeline.
- In August 2021, L3Harris Technologies announced that it had received a five-year, USD 96 million IDIQ contract from the US Special Operations Command to procure WESCAM MX electro-optical, infrared, and laser designator sensor suites and services. The sensor systems are expected to provide multi-spectral imaging and designation capabilities for various aircraft within the US Army Special Operations Aviation Command inventory. Similar orders for new electro-optical sensors and the upgrading of various military systems with advanced EO/IR sensors are anticipated to propel the market growth in the region during the forecast period.
Military Electro-optical and Infrared Systems Industry Overview
The military electro-optical & infrared systems market is semi-consolidated in nature, with the presence of few players holding significant shares in the market. Some prominent players in the market are Leonardo S.p.A, BAE Systems plc, THALES, Ultra Electronics Holding, and Lockheed Martin Corporation. Prominent market players have multifaceted product portfolios. Additionally, they try to modify and enhance their current capabilities through continuous research and development and introduce sophisticated features to deliver value-added electro-optical/infrared (EO/IR) solutions to end users. This also helps them introduce low-differentiated products at competitive pricing.
Most of the integration programs are long-term; hence, several IDIQ contracts are currently underway, signifying design modification and production of sophisticated EO/IR sensors per end-user specifications. Since the end-user requirements are diverse, it encourages strategic collaboration between market players.
The development of new integration platforms drives the demand for the integration of sophisticated EO/IR sensors and systems, which, in turn, may create a positive outlook for the market during the forecast period.
Military Electro-optical and Infrared Systems Market Leaders
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Lockheed Martin Corporation
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BAE Systems plc
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Ultra Electronics Holdings
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THALES
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Leonardo S.p.A
*Disclaimer: Major Players sorted in no particular order
Military Electro-optical and Infrared Systems Market News
- October 2023: The US Defense Advanced Research Projects Agency (DARPA) released a broad agency announcement for the Intensity-Squeezed Photonic Integration for Revolutionary Detectors (INSPIRED) project. The goal is to develop small size, weight, and power consumption (SWaP) optical sensors with sensitivity below the quantum-shot noise limit by using so-called squeezed light.
- June 2022: Excelitas Technologies Corp., a leading industrial technology manufacturer focusing on innovative photonic solutions, showcased its latest thermal imaging and camera technologies for military applications at the Close Combat Symposium. The exhibited DRAGON-S12 Non-Cooled Thermal Attachment Sniper Sight featured a 60Hz uncooled thermal sensor coupled with a near-silent aperture, providing exceptional sensitivity and uniformity. The PHOENIX-S product, designed for demanding ground-based sniper missions, demonstrated field-proven capabilities for early detection, recognition, and identification of targets at longer ranges, even in extremely poor light conditions. Its attachment configuration enables easy integration into a variety of firearm systems and optical riflescopes with a magnification of up to 25x.
- May 2022: Israel Aerospace Industries (IAI) secured a contract to supply its MiniPOP electro-optical/infrared (EO/IR) systems for the Philippine Navy's patrol vessels. As per company specifications and Janes C4ISR & Mission Systems: Air, the MiniPOP is an EO/IR system that can integrate four sensors into a single optical payload. It features a gyrostabilized single line-replaceable unit (LRU) housing a medium-wave infrared (MWIR) thermal imager with an XBn detector, a high-definition complementary metal oxide semiconductor (HD-CMOS) day color camera with continuous zoom, a laser rangefinder, and an IR laser pointer.
Military Electro Optical and Infrared Systems Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Restraints
4.4 Porter's Five Forces Analysis
4.4.1 Bargaining Power of Buyers/Consumers
4.4.2 Bargaining Power of Suppliers
4.4.3 Threat of New Entrants
4.4.4 Threat of Substitute Products
4.4.5 Intensity of Competitive Rivalry
5. MARKET SEGMENTATION
5.1 Platform
5.1.1 Air-based
5.1.2 Land-based
5.1.3 Sea-based
5.2 Geography
5.2.1 North America
5.2.1.1 United States
5.2.1.2 Canada
5.2.2 Europe
5.2.2.1 Germany
5.2.2.2 United Kingdom
5.2.2.3 France
5.2.2.4 Italy
5.2.2.5 Spain
5.2.2.6 Russia
5.2.2.7 Rest of Europe
5.2.3 Asia-Pacific
5.2.3.1 China
5.2.3.2 Japan
5.2.3.3 India
5.2.3.4 Australia
5.2.3.5 South Korea
5.2.3.6 Rest of Asia-Pacific
5.2.4 Latin America
5.2.4.1 Mexico
5.2.4.2 Brazil
5.2.4.3 Rest of Latin America
5.2.5 Middle East and Africa
5.2.5.1 United Arab Emirates
5.2.5.2 Saudi Arabia
5.2.5.3 South Africa
5.2.5.4 Rest of Middle East and Africa
6. COMPETITIVE LANDSCAPE
6.1 Vendor Market Share
6.2 Company Profiles
6.2.1 BAE Systems plc
6.2.2 Elbit Systems Ltd.
6.2.3 Teledyne FLIR LLC
6.2.4 Israel Aerospace Industries Ltd.
6.2.5 L3Harris Technologies Inc.
6.2.6 Leonardo S.p.A
6.2.7 Lockheed Martin Corporation
6.2.8 Raytheon Technologies Corporation
6.2.9 Rheinmetall AG
6.2.10 Saab AB
6.2.11 THALES
6.2.12 Ultra Electronics Holdings
6.3 Other Players
6.3.1 Danbury Mission Technologies
6.3.2 System Controls
6.3.3 Zygo Corporation
6.3.4 Navitar
6.3.5 Optikos
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
Military Electro-optical and Infrared Systems Industry Segmentation
Electro-optical and infrared systems, referred to as EO/IR systems, cover various distinct technologies based on targets and their missions. These sensors include visible spectrum and infrared sensors, due to which electro-optical/infrared (EO/IR) systems provide total situational awareness during both day and night, even in low light conditions. EO/IR sensors can be deployed in many ways. They are usually mounted on aircraft or vehicles used at sea or are hand-carried and can identify targets, track moving targets, and assess threats from a distance. Their applications include but are not limited to, airborne security, combat, patrol, surveillance, reconnaissance, and search and rescue operations.
The market has been segmented by platform and geography. By platform, the market is segmented into land-based, air-based, and sea-based. The report also covers the market sizes and forecasts for the military electro-optical and infrared systems market in major countries across different regions. For each segment, the market size is provided in terms of value (USD).
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Military Electro Optical and Infrared Systems Market Research FAQs
How big is the Military Electro-optical and Infrared Systems Market?
The Military Electro-optical and Infrared Systems Market size is expected to reach USD 8.91 billion in 2024 and grow at a CAGR of 2.80% to reach USD 10.23 billion by 2029.
What is the current Military Electro-optical and Infrared Systems Market size?
In 2024, the Military Electro-optical and Infrared Systems Market size is expected to reach USD 8.91 billion.
Who are the key players in Military Electro-optical and Infrared Systems Market?
Lockheed Martin Corporation, BAE Systems plc, Ultra Electronics Holdings, THALES and Leonardo S.p.A are the major companies operating in the Military Electro-optical and Infrared Systems Market.
Which is the fastest growing region in Military Electro-optical and Infrared Systems Market?
Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2024-2029).
Which region has the biggest share in Military Electro-optical and Infrared Systems Market?
In 2024, the North America accounts for the largest market share in Military Electro-optical and Infrared Systems Market.
What years does this Military Electro-optical and Infrared Systems Market cover, and what was the market size in 2023?
In 2023, the Military Electro-optical and Infrared Systems Market size was estimated at USD 8.66 billion. The report covers the Military Electro-optical and Infrared Systems Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the Military Electro-optical and Infrared Systems Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
Military Electro Optical and Infrared Systems Industry Report
The Military Electro-Optical and Infrared Systems Market report provides a comprehensive market analysis, focusing on market size and growth rate. The industry analysis includes detailed insights into market trends, market segmentation, and the market value of various platforms such as air-based, land-based, and sea-based systems. The report also offers an industry overview, highlighting the market leaders and their strategies.
The market forecast outlines the expected market growth and market outlook, supported by industry statistics and market data. The report example and report PDF provide a snapshot of the industry research, presenting an industry outlook and industry trends. The industry reports cover the geographical segmentation of the market, including regions like North America, Europe, Asia-Pacific, Latin America, and the Middle-East and Africa.
Furthermore, the market review delves into the market predictions and market segmentation, offering a market overview and industry information. The industry size and industry sales are analyzed to give a clear picture of the market dynamics. Research companies have contributed to this industry research, ensuring the accuracy and reliability of the industry information.
In summary, the report is a valuable resource for understanding the market trends, market leaders, and market growth in the military electro-optical and infrared systems sector. It provides a detailed market forecast and market outlook, making it essential reading for stakeholders looking to understand the market value and market predictions for the coming years. The industry statistics and industry research presented in the report offer a thorough market review, making it a crucial tool for anyone involved in the industry.
