United States Defense Electronics Market 2025: Industry Developments, Future Growth, Share & Industry Insights | Lockheed Martin, Northrop Grumman, Raytheon Technologies, BAE Systems, L3Harris Technologies

Global Defense Electronics Market reached US$ 173.98 billion in 2024 and is expected to reach US$ 254.51 billion by 2032, growing with a CAGR of 4.87% during the forecast period 2025-2032.

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M&A & Corporate Moves:

✅ AeroVironment to acquire BlueHalo (~US$4.1 B) consolidating autonomous defense, EW / counter-UAS capabilities.

✅ Honeywell is acquiring CAES Systems for US$1.9 B bolstering its RF, antenna and communications-electronics defense business.

✅ ELTA North America (radar/sensor firm) acquired Belgium's ScioTeq (avionics displays, C4ISR) in a June 2025 deal.

✅ In Europe, Quantum Systems (drone & sensor) has made multiple acquisitions in 2025 including battery-systems and UAV firms to strengthen its defense hardware pipeline.

✅ Rheinmetall increased its stake in Blackned, emphasizing cyber, software, and digital architecture in its defense electronics portfolio.

Major Product / Technology Launches & Programs:

✅ SPY-6(V) Radar (RTX / Raytheon):

The U.S. Navy awarded Raytheon a US$536 million contract in June 2025 for system integration, testing, and software upgrades of its SPY-6 radar family.

Another US$646 million contract was granted shortly later for hardware production and sustainment of the AN/SPY-6(V) radar.

The AN/SPY-6(V)4 variant successfully completed its first live maritime test in August 2025 off Hawaii, validating tracking performance in open-water and clutter conditions.

✅ Thales Mini EW Payload for Drones:

Thales unveiled a very lightweight (under 5 kg) electronic warfare payload designed for small drones, capable of detecting and geolocating radio emissions.

✅ France / European SIGINT / EW Upgrade:

Thales and Airbus are collaborating under a contract from France's Defence Procurement Agency (DGA) to build a tactical SIGINT / ESM system, improving direction-finding, signals monitoring, and spectrum analysis for French forces.

Market Geographical Share:

North America dominates the defense electronics landscape, driven by strong U.S. defense budgets, early adoption of advanced electronic warfare (EW) systems, and continuous modernization of air, naval, and land platforms. High investments in radar upgrades, secure communication networks, and next-gen C4ISR systems solidify its leadership position.

Asia-Pacific is the fastest-growing regional market, fueled by rising territorial tensions, rapid military modernization, and increasing indigenous defense production. China, India, South Korea, and Japan are expanding investments in radar systems, UAV electronics, advanced sensors, and counter-drone technologies to strengthen operational readiness.

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Key Market Drivers:

■ Rising Geopolitical Conflicts & Border Security Needs
Increasing tensions across Eastern Europe, the South China Sea, and the Middle East continue to accelerate military spending on advanced surveillance systems, electronic warfare tools, and secure communication networks.

■ Rapid Modernization of Defense Forces
Countries are replacing legacy systems with digital, AI-enabled, cyber-secure electronics-boosting demand for next-gen radars, sensors, weapon-control systems, and avionics.

■ Growth of Unmanned & Autonomous Defense Platforms
The surge in UAVs, UGVs, USVs, and autonomous surveillance systems increases the need for compact, high-performance electronics such as navigation units, ISR payloads, and data-link solutions.

■ Expansion of Cyber-Electromagnetic Warfare Capabilities
Nations are prioritizing electronic warfare suites, jamming systems, spectrum-dominance technologies, and SIGINT platforms to counter sophisticated threats.

■ Integration of AI, Machine Learning & Advanced Computing
Modern defense systems require real-time data processing, smart targeting, and predictive threat analysis-driving adoption of AI-enabled processors, software-defined radios, and sensor fusion electronics.

■ Increasing Demand for Network-Centric Operations (NCO)
Militaries are shifting toward fully connected battlefield environments, boosting investments in C4ISR systems, satellite communication terminals, encrypted networks, and multi-domain integration technologies.

Segments Covered in the Defense Electronics Market:

By Platform - Airborne, Land-Based, Naval, Space

By Product Type - Communication Systems, Radar Systems, Electronic Warfare Systems, Optronics & Infrared Systems, Command & Control Systems, Others

By Application - Intelligence, Surveillance & Reconnaissance, Command & Control, Navigation, Target Acquisition, Others

Regional Analysis for Defense Electronics Market:

⇥ North America (U.S., Canada, Mexico)

⇥ Europe (U.K., Italy, Germany, Russia, France, Spain, The Netherlands and Rest of Europe)

⇥ Asia-Pacific (India, Japan, China, South Korea, Australia, Indonesia Rest of Asia Pacific)

⇥ South America (Colombia, Brazil, Argentina, Rest of South America)

⇥ Middle East & Africa (Saudi Arabia, U.A.E., South Africa, Rest of Middle East & Africa)

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Major Key Players: Lockheed Martin, Northrop Grumman, Raytheon Technologies, BAE Systems, L3Harris Technologies, Thales Group, Hensoldt, Aselsan, Kratos Defense & Security Solutions and Mercury Systems.

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