Military modernisation to drive demand for electro-optical systems
The global electro-optical systems market size is set to reach $18 billion, expanding at 4.1% CAGR from 2022 to 2032, as per industry analysis by Fact.MR, a market research and competitive intelligence provider.
Electro-optics is a subfield of electronics and material physics that deals with devices, components, and systems that rely on the transmission and interaction of light with diverse materials. The technology is designed to interact with the electromagnetic and electrical states of materials.
Electro-optical systems are largely utilised by law enforcement and military agencies to improve situational awareness of environments during the day, night, and even in low-light situations. Electro-optical systems, which include electro-optical and infrared sensors, can provide precise optical data, both during the day and at night. Increasing usage of electro-optical systems in fire control systems, homeland security (airborne), situational awareness, search and rescue operations, target acquisition, and intelligence, surveillance, and reconnaissance (ISR) is driving the growth of the global market.
Moreover, the growing usage of advanced sensor-based systems in the military space is pushing the demand for electro-optical systems. Furthermore, the global electro-optical systems market is being driven by increased deployment in unmanned vehicles and for battle-space awareness, as well as increased use by armed forces to cope with security threats more effectively.
The rising focus of several countries on modernising their military forces and upgrading to new products is raising the demand for electro-optical systems. These systems are also utilised for non-destructive testing in the aerospace industry and by border protection authorities to detect incursions. Additionally, rising emphasis on miniaturisation will aid in the development of portable, sophisticated, and small electro-optical systems for intelligence, surveillance, and reconnaissance (ISR) and situational awareness applications around the world.
Key takeaways from market study
- The global electro-optical systems market is valued at $12 billion in 2022
- Worldwide demand for electro-optical systems is projected to increase at a CAGR of 4.1% from 2022 to 2032
- The global is anticipated to reach $18 billion by the end of 2032
- North America accounted for 34% share of the global electro-optical systems market in 2021, while Europe captured 22% market share
“The electro-optical systems market is expected to expand steadily due to the rising demand for safety and security and a growing requirement for robust defence systems. Moreover, increasing usage of electro-optical systems in unmanned vehicles is projected to boost global market expansion,” says a Fact.MR analyst.
Key manufacturers of electro-optical systems are implementing inorganic and organic growth strategies such as huge investments in R&D, constant systems innovation, mergers and acquisitions, and long-term systems contracts with the government.
These manufacturers are:
- L-3Harris Technologies Inc. reported in December 2021 that it had secured a contract from Armasuisse, the Swiss government body for defence procurement. As per this contract, the firm has agreed to supply the Swiss Armed Forces with around 100 WESCAM MX-RSTA EO/IR systems to assist the latter's TASYS tactical reconnaissance system.
- Amentum Services, Inc. revealed in December 2021 that it had received a five-year, $88 million contract from the U.S. Department of Defence (DoD) to supply Navy EO/IR Tech R&D Services.