Military Electro-optical And Infrared Systems Market Size, Share & Trends Analysis Report By Platform, By Application, By Imaging Technology, By Colling Technology, By Sensor Technology, By Component, By Region, And Segment Forecasts, 2024 - 2030

Market Size & Trends

The global military electro-optical and infrared systems market size was estimated at USD 8.25 billion in 2023 and is projected to grow at a CAGR of 4.2% from 2024 to 2030. The increasing need for advanced surveillance and reconnaissance capabilities drives market growth. As global tensions rise and asymmetric warfare becomes more prevalent, military forces require enhanced situational awareness to effectively monitor and respond to potential threats.

The growing focus on precision targeting and intelligence gathering has further fueled the adoption of EO/IR systems across various platforms, including aircraft, naval vessels, and ground vehicles. The ability of these systems to operate in diverse environmental conditions, including low visibility and night-time scenarios, makes them indispensable for modern military operations.

The market is growing with advancements in military electro-optical and infrared (EOIR) systems, making them more efficient, reliable, and versatile. Innovations such as high-resolution imaging sensors, advanced signal processing, and integration of artificial intelligence (AI) have enhanced the performance of these systems. The development of multi-spectral and hyperspectral imaging technologies allows for better target identification and discrimination, even in cluttered environments. Furthermore, the miniaturization of components has led to the creation of compact and lightweight systems that can be easily integrated into a variety of platforms, thereby expanding their operational scope.

Governments worldwide have been actively promoting the acquisition and development of Military EO and IR Systems as part of their defense modernization programs. Many nations are increasing their defense budgets and prioritizing the procurement of advanced surveillance and targeting systems to enhance their military capabilities. Initiatives such as funding for research and development, partnerships with private defense contractors, and streamlined procurement processes have been instrumental in driving the sales of EO/IR systems. In addition, government-led programs to improve border security, counterterrorism, and homeland defense are further contributing to the growing demand for these systems.

Manufacturers of military EO and IR systems are increasingly focusing on developing next-generation solutions that cater to the evolving needs of modern warfare. Companies are investing heavily in research and development to create systems with enhanced performance characteristics, such as higher resolution, longer range, and improved data processing capabilities. There is also a growing emphasis on developing systems that can be easily integrated with other defense technologies, such as unmanned systems and network-centric warfare platforms. By offering customizable and modular EO/IR solutions, manufacturers are positioning themselves to meet the specific requirements of different military customers.

The market offers several key opportunities for growth, particularly in the areas of emerging technologies and new applications. The increasing adoption of unmanned aerial vehicles (UAVs) and drones for surveillance and reconnaissance missions presents a significant opportunity for the integration of EO and IR systems. In addition, the growing focus on space-based EO and IR systems for missile defense and early warning systems opens up new avenues for market expansion. As militaries around the world seek to enhance their capabilities in electronic warfare and cyber defense, there is also potential for EO and IR systems to play a critical role in these domains, further driving market growth.

Platform Insights

Based on platform, the airborne segment led the market with the largest revenue share of 62.74% in 2023, due to increasing reliance on advanced airborne surveillance and targeting systems. These systems are crucial for enhancing the capabilities of modern aircraft, including fighter jets, drones, and reconnaissance planes, allowing for superior situational awareness and precision in both offensive and defensive operations. The growing focus on modernizing air force fleets across various nations, coupled with the rising demand for enhanced reconnaissance and targeting capabilities, has further solidified the Air Base system's dominant position in the EO and IR market. As defense budgets continue to prioritize aerial superiority and technological advancements, the airborne system is expected to maintain its strong market share, supported by ongoing innovations and upgrades.

The land segment is estimated to record at the fastest CAGR of 5.0% during the forecast period, fueled by the increasing need for advanced ground-based surveillance, targeting, and reconnaissance solutions. As military forces worldwide seek to enhance their operational effectiveness in diverse terrains and combat scenarios, the demand for robust, reliable, and highly accurate EO and IR systems for land-based platforms such as tanks, armored vehicles, and ground troops has surged. This growth is further driven by the integration of cutting-edge technologies like AI and machine learning, which are improving the functionality and efficiency of these systems. In addition, the rise in asymmetric warfare and the need for real-time intelligence on the battlefield are compelling military forces to invest heavily in land-based EO and IR systems, propelling the segment's expansion in the market. 

Application Insights

Based on application, the surveillance and reconnaissance segment led the market with the largest revenue share of 46.54% in 2023. This dominance is driven by the increasing demand for advanced situational awareness and intelligence gathering in modern warfare. EO and IR systems are crucial for surveillance and reconnaissance missions as they provide real-time data, high-resolution imagery, and enhanced night vision capabilities, which are essential for identifying and tracking potential threats. The growing need for border security, monitoring of critical infrastructure, and the rise in asymmetric warfare tactics have further propelled the demand for these systems. As military forces globally prioritize upgrading their surveillance and reconnaissance capabilities, this segment is expected to maintain its substantial market share in the coming years.

The target acquisition and designation segment is expected to grow at the fastest CAGR from 2024 to 2030. This surge is fueled by the increasing emphasis on precision strike capabilities and the need for accurate target identification in complex combat environments. EO and IR systems used in target acquisition and designation provide military forces with the ability to detect, identify, and track targets with high precision, even in challenging conditions such as low visibility or adverse weather. The integration of advanced technologies, such as laser designators and automated targeting systems, has significantly enhanced the effectiveness and reliability of these systems. As modern warfare increasingly relies on precision-guided munitions and the need for minimal collateral damage, the demand for sophisticated target acquisition and designation systems is expected to continue its rapid expansion.

Imaging Technology Insights

Based on imaging technology, the electro-optical (EO) systems segment led the market with the largest revenue share of 45.30% in 2023, due to their pivotal role in modern warfare and defense strategies. These systems are highly valued for their ability to provide real-time imaging and targeting solutions, which are crucial in various military operations, including surveillance, reconnaissance, and precision strikes. The versatility and efficiency of EO systems, coupled with advancements in sensor technology, have significantly contributed to their widespread adoption. In addition, the integration of EO systems with other defense technologies has further enhanced their capabilities, making them indispensable in both offensive and defensive military applications. This high share of EO systems in the market reflects their essential role in enhancing situational awareness, improving target acquisition accuracy, and ensuring the overall effectiveness of military missions.

The infrared (IR) systems segment has witnessed tremendous growth in recent years, driven by the increasing demand for advanced thermal imaging and night vision capabilities. IR systems are critical for detecting and identifying objects in low-visibility conditions, such as darkness, smoke, or fog, making them indispensable in various military operations. The growth of this segment is also fueled by technological advancements that have led to the development of more sensitive and accurate IR sensors, as well as the miniaturization of these systems, enabling their integration into a wide range of military platforms, from ground vehicles to unmanned aerial vehicles (UAVs). Furthermore, the rising global focus on enhancing border security and surveillance has spurred the demand for IR systems, further accelerating their adoption in the defense sector. As a result, the IR systems segment is poised to continue its rapid expansion, playing a crucial role in modern military strategies and operations.

Cooling Technology Insight

Based on cooling technology, the cooled segment holds significant share in the market with the market share of 54.3% in 2023, due to its superior performance in long-range and high-temperature detection. Cooled EO/IR systems use cryogenically cooled sensors, which enhance their sensitivity and accuracy. These systems can detect minute temperature differences, making them highly effective in military applications such as target acquisition, surveillance, and reconnaissance. Besides, in modern military operations, precision and reliability are crucial, and cooled EO/IR systems provide both. The growing demand for advanced targeting and surveillance systems that can operate in challenging environments, including high heat and long-distance detection, has contributed to the dominance of this segment.

The uncooled segment in the military EO/IR Systems market is experiencing rapid growth, driven by its cost-effectiveness and ease of integration. Uncooled EO/IR sensors operate at ambient temperatures, eliminating the need for complex cooling mechanisms. This simplifies their design and reduces maintenance requirements, making them a popular choice for a wide range of military applications. Moreover, uncooled EO/IR systems are increasingly being adopted for use in drones, infantry systems, and portable surveillance devices. The expanding use of unmanned systems and the need for lightweight, versatile EO/IR equipment has further fueled the demand for uncooled sensors. These systems are particularly suited for short- to medium-range surveillance, making them highly effective for tactical operations and situational awareness in combat zones.

Sensor Technology Insight

Based on sensor technology, the staring segment led the market with the revenue share of 59.5% in 2023, due to its ability to provide continuous, wide-area surveillance. Staring EO/IR systems use stationary sensors that constantly monitor a specific area, enabling real-time situational awareness without the need for scanning. This makes them suitable for applications such as border security, perimeter defense, and battlefield surveillance. Additionally, military forces rely on staring systems for their ability to detect and track multiple targets simultaneously. The high resolution and accuracy of these systems provide a strategic advantage in both defensive and offensive operations. They are widely used in ground-based and airborne platforms, including fixed-wing aircraft, helicopters, and ground surveillance systems.

The scanning segment in the military EO/IR Systems market is expected to witness substantial growth due to its ability to cover large areas with precision. Scanning EO/IR systems operate by systematically sweeping a sensor across a field of view, allowing for detailed and comprehensive surveillance. These systems are highly effective in tracking moving targets, making them essential in dynamic combat environments. Moreover, the growing use of scanning systems in aerial and naval platforms, where large areas need to be monitored, is a key factor driving this segment's growth. For instance, scanning EO/IR sensors are often deployed on aircraft and naval vessels for surveillance over vast terrains and open waters. Their ability to detect threats at long distances makes them crucial for maritime patrols and airborne reconnaissance missions.

Component Insight

Based on component, the sensor segment led the market with the largest revenue share of 26.4% in 2023, driven by the increasing demand for high-performance detection and imaging capabilities. EO/IR sensors are the core components of these systems, responsible for capturing visual and infrared data that is critical for military surveillance, targeting, and reconnaissance missions. The rising need for real-time data and enhanced situational awareness has led to a surge in sensor development. Additionally, military forces are increasingly investing in advanced sensor technologies that can operate in diverse environmental conditions, including low-light, fog, and high-heat scenarios. These sensors are integrated into a variety of platforms, including drones, aircraft, and ground vehicles, to provide comprehensive battlefield intelligence. The ability of EO/IR sensors to function effectively in both day and night conditions further adds to their widespread adoption.

The control system segment in the Military EO/IR Systems market is anticipated to witness tremendous growth during the forecast period, due to the increasing complexity and automation of military operations. Control systems manage the operation of EO/IR sensors, ensuring accurate data collection and processing. With the rise of unmanned platforms and automated defense systems, the demand for advanced control systems has surged. As modern military platforms become more interconnected, the need for integrated control systems that can manage multiple EO/IR sensors simultaneously is growing. These systems are critical for coordinating surveillance, targeting, and reconnaissance missions across various platforms. Control systems are also essential for optimizing sensor performance, enabling real-time adjustments and data analysis.

Regional Insights

North America dominated the military electro-optical and infrared (EOIR) systems market with the largest revenue share of 36.85% in 2023, owing to advancements in technology and increasing defense budgets. The region's focus on enhancing national security and maintaining technological superiority has spurred significant investment in advanced electro-optical and infrared systems. Innovations in sensor technology, along with the growing need for precision targeting and enhanced surveillance capabilities, are key factors contributing to this expansion. Furthermore, ongoing modernization programs and the strategic importance of maintaining an advanced defense infrastructure are expected to fuel the market growth further.

U.S. Military Electro-optical And Infrared Systems Market Trends

The military electro-optical and infrared systems market in U.S. is anticipated to witness at a significant CAGR during the forecast period, driven by the country's commitment to maintaining technological dominance and superior defense capabilities. The U.S. defense sector is heavily investing in next-generation systems that offer enhanced imaging, targeting, and surveillance functionalities. This growth is further supported by the increasing demand for advanced reconnaissance and situational awareness tools in various military operations. In addition, the U.S. military's focus on integrating these advanced systems into existing platforms and developing new, high-performance systems underscores the market's expansion and its strategic importance to national security.

Europe Military Electro-optical And Infrared Systems Market Trends

The military electro-optical and infrared systems market in Europe is expected to grow at a substantial CAGR during the forecast period, fueled by heightened security concerns and the need for advanced defense technologies. European nations are investing in modernizing their military capabilities to address evolving threats and improve operational effectiveness. The increased adoption of cutting-edge electro-optical and infrared technologies is driven by the need for enhanced surveillance, reconnaissance, and precision targeting. Furthermore, collaborative defense initiatives and joint programs among European countries are accelerating the development and deployment of advanced systems, contributing to the overall market expansion in the region.

Asia Pacific Military Electro-optical And Infrared Systems Market Trends

The military electro-optical and infrared systems market in Asia Pacific accounted for a significant share of the global market, owing to the region's increasing defense budgets, territorial disputes, and the need for advanced military capabilities. Countries including China, India, Japan, and South Korea are leading the charge in acquiring and developing sophisticated EO/IR systems to bolster their defense forces. The growing focus on maritime security and the rising geopolitical tensions in the region have further fueled the demand for EO/IR systems in Asia Pacific. In addition, the region's emphasis on indigenization and the development of homegrown defense technologies is contributing to the market's prominence. The presence of major defense manufacturers and the growing trend of defense exports from this region are also key factors behind its high market share.

Key Military Electro-optical And Infrared Systems Company Insights

The market is witnessing significant growth, driven by leading players' innovative initiatives. Companies like Raytheon Technologies, Lockheed Martin, and Northrop Grumman, investing heavily. Companies are focusing on developing new products, partnerships and collaborations, to achieve a competitive edge over their competitors. The following are some instances of such initiatives-in research and development to enhance the capabilities of Electro-Optical and Infrared Systems.

Besides, the companies are focusing on developing new products, partnerships, and collaborations to achieve a competitive edge over their competitors. For instance, in April 2023, Teledyne FLIR introduced an array of 24 models in its Boston+ longwave infrared (LWIR) thermal product line. The company plans to enhance the market's growth by increasing the applications for EO/IR systems in unmanned aircraft systems.

Recent Developments

• In June 2024, Sierra-Olympia Technologies, Inc. partnered with DRS EOIS to distribute the advanced HexaBlu high definition HOT midwave infrared sensor core. This latest solution is based on the DRS mature High Density Vertically Integrated Photodiode (HDVIP) technology and delivers peerless uniformity, sensitivity, and sensor modulation transfer function in a low SWaP package

• August 2024, L3Harris Technologies, through a collaborative effort, assisted Tulsa, Oklahoma, in securing recognition and funding from the U.S. Department of Commerce’s Economic Development Administration. This initiative highlights their commitment to fostering regional technology growth and promotes innovation within the EO and IR market, contributing to overall market expansion

• August 2024, L3Harris Technologies expanded its capabilities in autonomous air defense with the successful demonstration of cutting-edge technology. This expansion highlights their ongoing commitment to advancing military technology in the EO and IR domain, further driving the market's growth by enhancing defense system capabilities 

Military Electro-optical And Infrared Systems Market Report Scope 

 Global Military Electro-optical And Infrared Systems Market Report Segmentation

This report forecasts revenue growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2030. For this study, Grand View Research has segmented the global military electro-optical and infrared systems market report based on platform, application, imaging technology, cooling technology, sensor technology, component, and region:

• Platform Outlook (Revenue, USD Million, 2018 - 2030)

  • Airborne

  • Land

  • Naval

• Application Outlook (Revenue, USD Million, 2018 - 2030)

  • Surveillance and Reconnaissance

  • Target Acquisition and Designation

  • Weapon Sighting and Fire Control

  • Navigation and Guidance

• Imaging Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Electro-optical (EO) Systems

  • Infrared (IR) Systems

  • Hyper-Spectral and Multi-Spectral Systems

• Cooling Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Cooled

  • Uncooled

• Sensor Technology Outlook (Revenue, USD Million, 2018 - 2030)

  • Staring

  • Scanning

• Component Outlook (Revenue, USD Million, 2018 - 2030)

  • Human Machine Interface

  • Stabilization Units

  • Control System

  • Sensor

  • Optics

  • Processors

• RegionalOutlook (Revenue, USD Million, 2018 - 2030)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • Japan

    • India

    • South Korea

    • Australia

  • Latin America

    • Brazil

  • Middle East and Africa (MEA)

    • Kingdom of Saudi Arabia

    • UAE

    • South Africa