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Electro Optical Systems Market

Electro Optical Systems Market Size, Share, Trends, Growth Analysis, By Platform (Airborne, Ground, Naval), By System Type (Imaging, Non-Imaging), By Application (Military, Commercial) & Region - Global Market Insights 2022 to 2032

Electro Optical Systems Market Outlook (2022-2032)

The global electro optical systems market is valued at US$ 12 billion in 2022 and is expected to exhibit a CAGR of 4.1% and reach US$ 18 billion by the end of 2032.

An electro optical system is an electronic device that combines electro optical and infrared sensors to deliver correct optical information, both during the day and at night. An electro optical sensor is capable of converting light into an electric signal. Furthermore, the infrared sensor can identify any object in its vicinity by producing or detecting infrared radiation.

As a result, electro-optical systems are primarily used to improve target identification, monitor targets in various weather conditions, and assess threats from a given distance. These systems can be installed on aircraft, vehicles, helmets, ships, and military weapons, or even used as a hand-held detecting device.

Electro optical systems are utilized to enhance the abilities of military and commercial applications due to their long-range imaging capabilities and high image stabilization. These systems are widely utilized, particularly in the defense sector, for a variety of applications such as fire control systems, situational awareness, search and rescue, airborne homeland security, and intelligence, surveillance, and reconnaissance (ISR). Growing demand for sophisticated defense systems and equipment is expected to drive the sales of electro optical systems.

With a spike in the number of various kinds of attacks, images in decision-making processes are becoming particularly prominent, supporting the use of electro optic technologies to effectively combat the rising security threats and quicken the decision-making process. These aspects are projected to boost the demand for electro optical systems.

Moreover, electro optical systems are used in the aerospace industry for non-destructive testing. Furthermore, border protection authorities make considerable use of these systems to track an invasion effort. As terrorist operations increase across numerous ountries, there is a huge demand for improved monitoring systems and the need to prevent terrorist organizations' incursion efforts.

Some of the major tasks of the armed forces are intelligence, surveillance, and target acquisition, which are supported by electro optical systems. These systems include multispectral day and night imaging sensors, infrared targeting pods, and laser rangefinders (LRF). Such features have contributed to the growing demand for electro optical systems in the defense and military sectors.

Furthermore, continuing advancements in electro optical systems, such as guidance for defense gunnery, 24-hour situational awareness, 360-degree rotation, and automated object detection, are anticipated to provide lucrative opportunities in the electro optical systems market.

Report Attributes

Details

Electro Optical Systems Market Size (2022)

US$ 12 Billion

Projected Market Value (2032)

US$ 18 Billion

Global Market Growth Rate (2022-2032)

4.1% CAGR

North America Market Share (2021)

34%

Europe Market Share (2021)

22%

Key Companies Profiled

  • L3Harris Technologies, Inc
  • BAE Systems PLC
  • Elbit Systems Ltd
  • FLIR Systems, Inc
  • Collins Aerospace
  • Lockheed Martin Corporation
  • General Dynamics Mission Systems, Inc
  • Instro Precision Limited
  • Israel Aerospace Industries
  • Leonardo DRS
  • Safran S.A
  • Rheinmetall AG
  • Textron Systems
  • Saab AB
  • Thales Group

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Why is Demand for Electro Optical Systems Escalating?

“Rapidly Rising Demand for Modern Unmanned Aerial Vehicles (UAVs)”

Advancing manufacturing technologies are accelerating the development of unmanned vehicles for air, land, and sea platforms. Unmanned vehicles are increasingly being used for commercial and military purposes such as policing, surveillance, product delivery, agricultural monitoring, and navigation, among others.

With advancements in remote operations, the defense sector is experiencing a rapid acceptance of unmanned vehicles for military use. Current unmanned vehicles include cameras and integrated sensors that give many wavelength information for precise monitoring and detection.

Electro optical systems are fitted on the majority of unmanned aerial vehicles (UAVs) to obtain reliable information and a noise-free image of a target present at a mid-range or long-range wavelength. UAVs are also employed for situational awareness, intelligence, surveillance, and reconnaissance applications.

Furthermore, global defense spending is growing in response to rising security challenges. As a result, the development of modern UAVs with integrated noise-free, long-range image-sensing electro optical systems is increasing to tackle rising security challenges.

“Increasing Miniaturization of Electro Optical Systems”

Numerous industry verticals such as consumer electronics, aerospace and defense, medical, and automotive are increasingly using micro-sized system components to fulfill the rising demand for portable electronic devices.

As a result, manufacturers are focused on the deployment of miniaturized equipment to suit the expanding demand. These small-sized devices can provide better performance and great dependability, making them an excellent choice for military and commercial aircraft applications.

Furthermore, the aerospace sector has strict criteria for the weight and size of aircraft components. As a result, the aviation sector is increasing its demand for smaller equipment.

Consequently, manufacturers are concentrating their efforts on the design and creation of miniaturized electro optical systems to reduce payloads and increase system performance. These miniature electro optical systems aid in the creation of lightweight laser designators while also boosting military operations efficiency and troop safety.

“Start-ups to Contribute Significantly to Sales Growth of Electro Optical Systems “

The market for electro optical systems is likely to benefit from the advent of numerous startups like Boom Supersonic, EXSEED SPACE, Skyroot Aerospace, Blue Origin, and Dhruva Space. These startups are expected to contribute significantly to the sales growth of electro optical systems.

  • Dhruva Space, an Indian company, received US$ 27, 58.306 billion in October 2021 from Mumbai Angels Network, Blue Ashva, Indian Angel Network, and other major investors. Dhruva Space intends to use the funds to extend its current product portfolio.

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Country-wise Insights

Why is the United States a Leading Market for Electro Optical Systems?

North America captured 34% of the global sales of electro optical systems in 2021. The United States is expected to lead North America during the forecast period.

The growing adoption of technologically superior UAVs is projected to bolster the sales for electro optical systems in the United States.

How is Germany Driving the European Electro Optical Systems Market?

Europe accounted for 22% of the worldwide market in 2021. The demand for electro optical systems in Germany is anticipated to rise during the forecast period.

Germany plays an important role in the European market due to substantial investments made in R&D to develop resilient, lightweight, and cost-effective electro optical systems for mission-critical operations.

Why is Demand for Electro Optical Systems Snowballing in Japan and South Korea?

The sales of electro optical systems in Asia Pacific are expected to skyrocket due to developing territorial issues and substantial rises in military expenditure.

Moreover, demand for electro optical systems is snowballing in Japan and South Korea. These countries' armed forces are widely using electro optical systems due to their benefits, such as enabling fast-paced decision-making through effective picture solutions, information collection, and targeting solutions.

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Category-wise Insights

What’s Driving Demand for Electro Optical Systems in the Military Sector?

Application-wise, the electro-optical/infrared (EO/IR) systems market is split into military and commercial.

The growing need for technologically improved security and surveillance systems is one of the main factors pushing the demand for electro optical systems in the military sector.

Electro optical systems have several advantages. For example, low-light cameras are employed in cases of limited visibility because they provide superior performance with less power consumption and greater output. Furthermore, laser range finders are employed both during the day and at night and in practically all environmental circumstances, such as smoke, haze, rain, and fog.

Moreover, electro optical systems include features such as guidance for defense gunnery, 360-degree rotation, and automated object recognition. These systems can distinguish targets both during the day and at night and in low and high contrast settings.

Demand for electro optical systems is likely to grow during the forecast period due to rising military spending worldwide, with armed forces adopting various gadgets such as electro optical systems and creating new technologies in this industry.

Competitive Landscape

The global market for electro optical systems is very competitive due to the presence of several significant competitors competing in both the domestic and international markets. The market is moderately concentrated, with a few key firms controlling a sizable portion. Key players in the electro optical systems market are pursuing tactics such as mergers and acquisitions and product and technology innovation.

  • L3 Harris Technologies received a US$ 500 million contract in April 2022 to develop and produce a wide-field-of-view electro-optical system to safeguard surface warships from new adversary anti-ship cruise missiles.
  • Elbit Systems Ltd. announced in February 2021 that it had obtained about US$ 82.0 million contract from BAE Systems Hägglunds AB to provide electro-optical commander sights and active protection systems to the Royal Netherlands Army.
  • Leonardo DRS, a subsidiary of Leonardo S.p.A., stated in January 2021 that it had obtained a multi-year contract from the US Army to provide mission equipment sets. This contract was granted through the initial maneuver-short-range air defense (IM-SHORAD) program. The mission equipment packages will include an electro-optical/infrared (EO/IR) sighting system, a 30-millimeter M230LF gun, electronic warfare systems, radar, stinger missiles, and Hellfire rockets.

Key Segments in Electro Optical Systems Industry Research

  • By Platform:

    • Airborne
    • Ground
    • Naval
  • By Type:

    • Imaging
    • Non-Imaging
  • By Application:

    • Military
    • Commercial
  • By Region:

    • North America
    • Latin America
    • Europe
    • APAC
    • MEA

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The global electro optical systems market is valued at US$ 12 billion in 2022.

Global demand for electro optical systems is predicted to increase at a CAGR of 4.1% from 2022 to 2032.

Sales of electro optical systems are expected to reach US$ 18 billion by 2032.

North America accounted for the largest market share of 34% in 2021.

Europe accounted for 22% share of the worldwide electro optical systems market in 2021.

L3Harris Technologies, Inc, BAE Systems PLC, Elbit Systems Ltd, FLIR Systems, Inc, Collins Aerospace, Lockheed Martin Corporation, General Dynamics Mission Systems, Inc, Instro Precision Limited, Israel Aerospace Industries, Leonardo DRS, Safran S.A, Rhei

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