Defense Electronics Market: Increasing Technological Advancements to Drive the Market Growth

Defense Electronics Market size was valued at USD 189.93 Billion in 2022 and is expected to grow at a CAGR of5.3 percent from 2023 to 2029 to reach USD 272.64 Billion.
Defense Electronics Market Overview
Defense Electronics refers to electronic components and systems designed for technological superiority in national defense. As per the research, the market has experienced significant growth due to several factors such as the increasing advancements in communication systems that offer improved data transmission, encryption, and anti-jamming capabilities. In the Defense Electronics Industry, Lockheed Martin Corporation is one of the largest players. The Defense Electronics Market report includes a detailed analysis of the market size, share with the region-wise and segment-wise market dynamics including growth drivers, major restraints, new opportunities and upcoming challenges.To know about the Research Methodology :- Request Free Sample Report
Defense Electronics Market Dynamics
Increasing Defense Budgets across the World

The allocation of funds to defense spending impacts directly the development of defense electronics technologies. Building and maintaining national security requires large budgets. Governments are increasingly investing in research and development related to defense electronics, which has enabled the exploration of new technologies, innovative solutions and cutting-edge capabilities. These are developing the defense electronics sector by including the acquisition of sophisticated radar systems, unmanned platforms, communication networks, cybersecurity solutions and electronic warfare equipment. Cyber threats are continuously evolving for which defense budgets are playing an important role in financing cybersecurity initiatives. In the past few years, higher defense spending has fostered a healthy and dynamic defense electronics market by attracting investments, encouraging innovation and supporting skilled workforce development.

Increasing Artificial Intelligence (AI) Investment Activities

Militaries across the world are increasingly treating AI as a technology that is central to their long-term strategies and planning. One of the most significant paths of integration of emerging technologies such as AI-enabled technology into defense systems and platforms is through the largest defense companies. With tech giants like Amazon and Google at the forefront of AI innovation, major defense companies are pressed to step up their innovation-related activities to keep pace with the larger commercial market. The AI investment activities in the defense electronics market typically focus on autonomous systems, cybersecurity, data analysis and intelligence, training and simulation, predictive maintenance and communication and networking.

AI's role in cybersecurity is important as it helps identify and counter cyber threats, detect anomalies and protect defense infrastructure from attacks.AI algorithms efficiently analyze massive amounts of data to extract valuable insights, helping defense agencies make informed decisions and anticipate potential threats. These are the main factors due to which the demand for AI in the defense electronics sector is increasing resulting to an increase in AI investment activities.

China and Russia are making significant investments in AI for national security purposes while the Department of Defense (DOD) is investing billions of dollars to develop and integrate AI into defense systems. In recent years, DOD increased investments, reflecting the growing importance of AI. For example, the latest budget request included USD 130.1 billion for R&D in recognition of the need to sharpen readiness in advanced technology including artificial intelligence.

Effects of Geopolitical Uncertainties on the Defense Electronics Industry

Geopolitical uncertainties directly affect defense spending, international trade and technology transfer. They strain international collaboration defense projects. Diverging national interests and concerns over the sharing of technology creates various challenges for multinational defense initiatives. The trade disputes and political sanctions can disrupt the global supply chain for defense electronics components and materials. The reliance on suppliers that are involved in geopolitical conflicts leads to potential supply shortages and higher shortages.
Defense Electronics Market Regional Insights
The North American Defense Electronics Market dominated the global market in 2022 and is expected to grow at a high rate during the forecast period. The US Defense Electronics Market held the major share in the region. The country and its allies operate in an increasingly complex security environment and defense technology is highly advancing in response. The Defense Information Systems Agency and the Department of Defense Information Network are finding ways to repurpose cutting-edge technology such as artificial intelligence, development, security and operations; and zero-trust assets to protect the Defense Department's global network.

The Asia Pacific Defense Electronics Market is experiencing significant growth and transformation in the past few years. Many countries in the region are increasingly investing in modernizing their armed forces, which includes upgrading their defense electronics systems with the latest technologies, such as advanced radars, communication systems, electronic warfare capabilities, and surveillance and reconnaissance equipment. In the region, countries are transitioning towards network-centric warfare, where information sharing and communication between different military platforms are critical. Thus, the increasing demand for efficient and secure communication networks is driving market growth.

Europe has a diverse Defense Electronics Market with contributions from both established defense companies and innovative startups. The proliferation of commercial drones has raised security concerns, which has led to the development of counter-unmanned aerial vehicle (UAV) systems in the regional market. The counties in the region are highly investing in electronic warfare systems, including electronic countermeasures and electronic attack technologies.
Defense Electronics Market Segment Analysis 
Based on Vertical: The market is divided into Navigation, Communication, Display, C4ISR, Electronic Warfare, Radar and Optronics. The Communication segment held the largest Defense Electronics Market share in 2022. This is because communication systems are essential for facilitating real-time information exchange between military personnel and units, which includes radio communication, satellite communication, and secure data networks. The Radar segment is expected to grow rapidly during the forecast period. The segment also held a major share of the global market as it is crucial for raising awareness about the situation and self-defense.

Based on Platform: The market is divided into Airborne, Marine, Land and Space. The Airborne segment held the largest share of the global market in 2022. The avionics systems are important components of the segment, which includes flight control systems for aircraft control, navigation, communications and tracking. The increasing demand for advanced avionics is majorly driving the growth of the market.
Defense Electronics Market Competitive Landscape
This section of the report provides a detailed analysis of the defense electronics key competitors and information provided by the competitors. The investments by key competitors in research and development with their revenue, sales, production capacities and company overview are all included in the report. SWOT analysis was used to provide the strengths and weaknesses of the key players in the defense electronics industry.

On 8 June 2023, Mitsubishi Electric Corporation introduced its gallium nitride (GaN) power amplifier that achieves a frequency range of 3400MHz using a single amplifier, which can be used for 4G, 5G and beyond 5G/6G communication systems operating at different frequencies in a single base station.The amplifier is expected to enable the radio unit to be shared for different communication systems and lead to more power-efficient base stations.In May 2023, General Dynamics Electric Boat, a business unit of General Dynamics was awarded USD 1.076 billion contract modification from the U.S. Navy to provide long-lead-time material and advanced construction for Virginia-class fast-attack submarines.In March 2022, LeonardoS.p.A planned to invest 1 billion euros in Italy over five years to develop new products, modernize its factories and strengthen its supply chain in defense electronics.
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Defense Electronics Market


Report Coverage
Details


Base Year:
2022
Forecast Period:
2023-2029


Historical Data:
2018 to 2022
Market Size in 2022:
US $ 189.93 Bn.


Forecast Period 2023 to 2029 CAGR:
5.3%
Market Size in 2029:
US $ 272.64 Bn.


 Segments Covered:
by Vertical
Navigation
Communication
Display
C4ISR
Electronic Warfare
Radar
Optronics


by Component
Hardware
Software


by System
Airborne
Marine
Land
Space



Defense Electronics Market, by Region
North America (United States, Canada and Mexico)
Europe (UK, France, Germany, Italy, Spain, Sweden, Austria and Rest of Europe)
Asia Pacific (China, South Korea, Japan, India, Australia, Indonesia, Malaysia, Vietnam, Taiwan, Bangladesh, Pakistan and Rest of APAC)
Middle East and Africa (South Africa, GCC, Egypt, Nigeria and Rest of ME&A)
South America (Brazil, Argentina Rest of South America)
Defense Electronics Key Players
1. Lockheed Martin Corporation(US)
2. Northrop Grumman Corporation (US)
3. Raytheon Technologies Corporation (US)
4. Thales Group (France)
5. BAE Systems plc (UK)
6. General Dynamics Corporation (US)usd 39407 mil
7. Saab AB (Sweden)
8. L3Harris Technologies, Inc. (US)
9. Leonardo S.p.A. (Italy)
10. Rheinmetall AG (Germany)
11. Elbit Systems Ltd. (Israel)
12. Hensoldt AG (Germany)
13. Hanwha Corporation (South Korea)
14. Mitsubishi Electric Corporation (Japan)
15. IndraSistemas S.A. (Spain)
16. Israel Aerospace Industries Ltd. (Israel)
17. Rafael Advanced Defense Systems Ltd. (Israel)
18. CACI International Inc. (US)
19. QinetiQ Group plc (UK)

Frequently Asked Questions

1] What is the expected CAGR of the Global Defense Electronics Market during the forecast period?
Ans. During the forecast period, the Global Defense Electronics Market is expected to grow at a CAGR of 5.3 percent.

2] What was the Defense Electronics Market Size in 2022?
Ans.USD189.93Bn was the Defense Electronics Market size in 2022.

3] What is the expected Defense Electronics Market size by 2029?
Ans. USD 272.64 Bn is the expected Defense Electronics Market size by 2029.

4] What are the major Defense Electronics Market segments?
Ans. The market is divided by Component, Vertical and Platform.

5] Which regional Defense Electronics Market share is expected to grow at a high rate during the forecast period?
Ans. The Defense Electronics Market share of Asia Pacific is expected to grow at a high rate during the forecast period.