The global land-based military electro-optical and infrared systems market was valued at USD 1,556.26 million in 2021. It is projected to reach USD 1,935.04 million by 2030, growing at a CAGR of 2.45% during the forecast period (2022-2030). The term "electro-optical systems" refers to equipment for producing, detecting, and measuring radiation in the optical spectrum that combines optics with electronics. With the help of this technology, an associative device may measure the electromagnetic spectrum and wavelengths between 0.1 and 1000 micrometers. The principal components of this electromagnetic spectrum include ultraviolet, infrared, and visible light. An infrared sensor can identify practically all structures nearby the wavelength, whereas an electro-optical sensor can convert the light signal into an electric signal.
Military and law enforcement agencies typically use this imaging technology to get the best possible situational awareness of the battlefield day or night, especially in low light. Due to the ability of the electro-optical sensor and infrared sensor to create precise optical data, it is anticipated that the market for land-based military electro-optical and infrared systems will expand during the forecast period.
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Rising Defense Expenditures
The architecture of the international security system has been compromised by the expanding hegemonism, unilateralism, and power politics that have fueled multiple global crises due to the fundamental changes in the international strategic landscape. Several procurement programs are now underway to improve the situational awareness of the armed forces to guarantee the combat preparedness of the current defensive systems. The rise in defense funding currently pays for these initiatives. Additionally, there is a need to update outdated military hardware due to the constantly shifting battlefield conditions. Military land vehicles from the 1970s and 1980s are still widely used by many armed services, but their capabilities are inferior to those of more modern vehicles. In this regard, these armed forces have strongly emphasized the acquisition and modernization of ground vehicles. Purchase plans have received the necessary impetus due to the increased budgetary allocation for military modernizations.
Increasing Necessity to Enhance the Battlefield Situational Awareness of the Land-Based Forces
The military increasingly needs more advanced situational awareness capabilities as a result of developing asymmetric threat scenarios. There is an increasing need to interconnect various systems to operate in tandem to develop enterprise-like systems that offer a more comprehensive view of the battlefield. As a result, real-time data collection and improved situational awareness are now the focus of many forces. Militaries have recently demanded complete situational awareness spread throughout the battle network. EO/IR sensors will be helpful in this area because of their high range capabilities and improved target recognition skills; as a result, numerous nations are actively purchasing these systems. Companies have also been developing technology that gives military vehicles and the dismounted infantry increased visibility, situational awareness, and threat warning in response to the increased focus on improving the military's situational awareness.
Design Challenges, Technological Constraints, and Supply Chain Risks
As new military and security capabilities are produced, integrating newer technologies into older systems can be challenging regarding technological compatibility and the interoperability of a wide range of technologies. The growth of autonomous systems' payload has been driven by the requirement for intelligent sensors with improved imaging capabilities. Combining robust EO/IR systems with more minor, unmanned, and man-portable devices has created some of the most complex design problems for engineers.
One of these issues is meeting the requirements for integrating high-performance systems for onboard processing within the size, weight, and power (SWaP) limits. Since there is little to no product differentiation among individual market participants, most compete based on price and market reach. Therefore, to achieve a competitive advantage, most players price their items lower than those of products with comparable specifications given by their rivals. However, the market participants' profit margins erode due to the cheap price approach, which considerably impacts their revenue stream.
Growing Focus on Vehicle-Mounted Segment
In order to improve the combat efficiency of armored vehicles, advanced optronic technologies are becoming crucial. For land vehicles and dismounted infantrymen, some technologies include thermal imaging, 360-degree vision, and improved night vision capabilities. Players are developing sensors that give military armored vehicles and crews increased visibility, situational awareness, and threat warning as the emphasis shifts toward improving vehicle protection systems. Demand for more recent vehicle-based EO/IR sensors is anticipated to be driven by the continuous modernization initiatives for land vehicles. With features like fire-on-the-move capability, day and night imaging, automatic target tracking, laser range finder for precise ballistics, last round warning, manual backup, and high ammo storage capacities, RWS for land vehicles has become more effective. As a result, several nations are replacing outdated military systems with more modern ones to utilize cutting-edge technology.
The global land-based military electro-optical and infrared systems market is segmented by type.
Based on type, the global land-based military electro-optical and infrared systems market is bifurcated into vehicle-mounted and man-portable.
The vehicle-mounted segment owns the highest market share and is expected to grow at a CAGR of 2.39% during the forecast period. Most crucial to military ground operations are electro-optical and infrared equipment. These systems comprise a wide range of discrete technologies focused on meeting mission objectives and acquiring targets. Weapon-mounted sights, night vision systems, optronic devices placed on vehicles, laser sights, thermal imagers, and designators are land-based electro-optical and infrared systems. In order to improve the combat efficiency of armored vehicles, advanced optronic technologies are becoming crucial. For land vehicles and dismounted foot soldiers, some of the technologies that are being prioritized include thermal imaging, 360-degree vision, and improved night vision capabilities. Players are developing sensors that give military armored vehicles and crews increased visibility, situational awareness, and threat warning as the emphasis shifts toward improving vehicle protection systems. The 360-multifunction vehicle protection (MVP) sensor, a new component of BAE Systems' integrated vehicle protection system (VPS) family, was made available in April 2019.
Most man-portable systems are used for training and testing, perimeter security, surveillance, force protection, short to mid-range threat identification, tracking, and targeting. To evaluate aircraft EO/IR sensor suites, Textron Systems created the Man-portable Aircraft Survivability Trainer (MAST), a long-range UV simulator. The device is meant to train pilots in simulated conflicts and has a 5-kilometer range. The system includes a virtual seeker, day-and-night video recording, the ability to simulate IR threat-based weaponry, and the possibility of a laser. Its most crucial characteristics are the battery life, weight, and compactness of the man-portable EO/IR equipment. Although EO/IR system size and weight have significantly decreased over the past few decades, battery size and capacity continue to be challenging. For a 72-hour deployment, most soldiers carry an average of 20.8 pounds of batteries. The US AFC is working on the component level of the Army's Conformal Wearable Battery (CWB), a thin, flexible, and light battery that may be worn on a soldier's vest to power electronics.
North America Dominates the Global Market
The global land-based military electro-optical and infrared systems market is bifurcated into four regions, namely North America, Europe, Asia-Pacific, and LAMEA.
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North America is the most significant shareholder in the global land-based military electro-optical and infrared systems market and is expected to grow at a CAGR of 2.54% during the forecast period. Under its Abrams Upgrade Program, the US Army aims to field 2,101 SEPv3 tanks. In October 2017, the Army accepted the first of roughly 12 initial production variants of the M1A2 SEPv3 Abrams. General Dynamics was awarded a contract later in 2018 to convert 274 Abrams tanks to the SEPv3 variant. The Army is also considering testing SEPv4 enhancements, including new color cameras, onboard networks, slip rings, improved meteorological sensors, ammunition data linkages, laser warning receivers, and a far more potent, multifunctional 120mm tank round. At the US Army Cold Regions Test Center, the Integrated Visual Augmentation System (IVAS), an augmented reality device based on Microsoft's HoloLens, has undergone testing in icy conditions. The IVAS prototype heads-up display is a powerful combination of several unique features. By pressing a button, night vision and thermal scope settings are accessible. Through the Army's Man Transportable Robotic System Increment II (MTRS Inc II) program, the US Army is also purchasing Centaur UGVs from FLIR Systems.
In addition, CADEX Inc. was given Canada a USD 2 million contract to deliver 300 monocular night vision systems. The new equipment will improve soldiers' night vision. A modular autonomous uncrewed ground vehicle called Mission Master was unveiled by Rheinmetall Canada (A-UGV). Various payloads, like as long-range electro-optical/infrared (EO/IR) sensors, surveillance radar, 360-degree full-ring cameras, laser rangefinders, and laser designators for spotting possible threats, are also capable of being carried by the autonomous ground vehicle.
Asia-Pacific is expected to grow at a CAGR of 3.05%, generating USD 520.47 million during the forecast period. For the past few years, China North Industries Corporation (Norinco) has concentrated on raising the production and sales of armored vehicles made locally. A 6x6 VN2C mine-resistant vehicle with a 12.7mm and 762mm MG, eight electrically driven grenade launchers, and space for additional turrets was created by the company in 2016 and is similar in design to the WMZ-551 APC. As part of upgrading ground forces between 2022 and 2026, the Indian government approved the purchase of 464 modernized T-90 Bhishma tanks for about USD 2 billion. The Cabinet Committee on Security has already approved the license purchase from Russia, and the production duties were given to the Avadi Heavy Vehicle Factory (VHF) in Tamil Nadu, which is part of the Ordinance Factory Board, primarily to satisfy the requirements of the Indian Army. The improved model, known as the T-90M, comes with several improvements, one of which is a modernized turret equipped with the Kalina fire control system and an integrated targeting suite. These factors are anticipated to drive market growth during the forecast period.
Europe is anticipated to grow significantly during the forecast period. The UK armed forces have upgraded its current EO/IR systems because adversaries use more advanced tactics and technologies. Recent contracts for improving EO/IR sensors were given by the UK Defense and Security Accelerator (DASA). Numerous businesses, including Thales, Teledyne e2v, the University of Exeter, QinetiQ, the University of Stirling, Heriot-Watt University, the University of Bristol, Iceni Labs, Frazer-Nash Consultancy, Living Optics, and Spectra Medical, received contracts totaling USD 2.8 million. The French Army intends to enlist 200 modernized Leclerc MBTs between 2020 and 2022 to retain high firepower. The Leclerc Main Battle Tank (MBT), created and produced by Nexter Systems, is now known as the Leclerc Scorpion or XLR. The Puma IFV is now being adopted in Germany to replace the outdated Marder IFVs currently used by the German Army.
Saudi Arabia is acquiring more weapons because its unstable neighbors, including Yemen to the south, Iran across the Persian Gulf, and Iraq to the north, pose serious dangers. The nation is the world's top importer of weapons and ammunition and significantly depends on imports for its defense supplies. The government intends to expand its local military equipment spending to 50% by 2030 to strengthen its local manufacturing capabilities as part of Vision 2030. For instance, a contract to produce armored military vehicles domestically was recently inked by the Military Industries Corporation (MIC) and the Saudi General Directorate of Border Guard. Turkey's first electric armored vehicle, the Akrep II (Scorpion), was introduced by the Turkish defense company Otokar. The vehicle can be used for two different types of reconnaissance missions, including ones that involve stealth, the use of an electro-optic sensor suite, or the employment of fire. This vehicle is capable of mounting a turret with a 90 mm gun.
The global land-based military electro-optical and infrared systems market’s major key players are Elbit Systems Ltd, FLIR Systems Inc., Israel Aerospace Industries, Rheinmetall AG, Saab AB, Thales Group, HENSOLDT AG, L3Harris Technologies Inc., and Leonardo DRS.