Electronic Warfare Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Electronic Warfare Market is anticipated to register a CAGR of over 4% during the forecast period. (2022 - 2027).

Despite the impact of the COVID-19 pandemic on the global economy, the military expenditure of several countries has been constant, if not higher, than in previous years. According to the Stockholm International Peace Research Institute (SIPRI), the global military expenditure was USD 1.98 Trillion in 2020 and has increased by 0.7% to USD 2.1 Trillion in 2021. The supply chain disruption caused due to the pandemic had a slightly negative impact on the electronic warfare market, with mild disruptions to the ongoing activities of product innovation and manufacturing for a brief period in 2020. Nevertheless, the overall impact from the demand perspective is negligible.

The ongoing political conflicts and territorial disputes between several nations are expected to generate demand for sophisticated electronic warfare systems with superior capabilities during the forecast period.

The development of cognitive electronic warfare, which is the integration of advanced technologies, like artificial intelligence and neural networks with the electronic warfare systems, to achieve faster and more efficient systems with minimal lag between threat identification and tracking, is expected to open up new market opportunities for the electronic warfare market.

Key Market Trends

The Electronic Support Segment is Expected to Experience the Highest Growth During the Forecast Period

The electronic support segment is anticipated to have the highest growth during the forecast period. The need for advanced information gathering and communication systems on the battlefield is of high importance. Due to this reason, intelligence, surveillance, and reconnaissance (ISR), intelligence, surveillance, target acquisition, and reconnaissance (ISTAR), signals intelligence (SIGINT) systems. Other such methods for recognition and targeting of threats are expected to register the highest demand, as they assist in attack or protect against the enemy attack. The use of military robots like uncrewed aerial vehicles and uncrewed sea vehicles, with the SIGINT and ISTAR systems, has been increasing recently. Rising internal and external conflicts have significantly driven the demand for electronic warfare support systems across major countries in the world. For instance, in June 2021, Patria was awarded a contract to deliver the Patria ARIS-E Electronic Support Measures (ESM) system to a European customer. Patria ARIS-E is an ESM system that intercepts, identifies, and geolocates radioemitters without being detected. Based on the received signals, the system produces a situational picture indicating active operations. The system also enables further analysis of the received signals. The growing proliferation of unmanned systems is also driving the need for better electronic support, as autonomous and remotely operated vehicles rely heavily on electronic communications and systems. Hence the investments into the ground-based radar EW systems that provide electronic support for conducting intelligence, surveillance, and reconnaissance operations are also increasing, which is expected to drive the segment's growth in the future.

The Asia-Pacific Region is Expected to Experience the Highest Growth During the Forecast Period

The Asia Pacific region is expected to witness a significant growth rate during the forecast period. Owing to the increased military spending across several countries in the area, the demand for electronic warfare systems was driven significantly over the past years and is expected to carry on towards the forecast period. For instance, according to SIPRI, China and India were among the top military spenders in 2021, with other countries accounting for 62 percent of global military expenditure. Also, in 2021, China’s military spending rose to USD 293 Billion, expected to drive the development and procurement of electronic warfare systems. Several countries in the region are now focusing on enhancing their EW capabilities. For instance, the Australian Department of Defense (DOD) has formed strategic partnerships with internal universities to establish a Center of Expertise for electronic warfare systems. Over the next five years, the DOD and Flinders University will invest a total of AUD 5 million into developing the plans. With increasing military tensions in Asia due to certain military activities being conducted by the Chinese army, various countries with the potential threat from China have been developing new electronic warfare defense systems. For instance, in March 2021, the Japan Self-Defense Forces launched an 80-member electronic warfare unit that can detect and analyze naval and airborne communications and radar emissions of neighboring countries. The team also has electronic attack capabilities that can disrupt enemy communications and radars. In March 2022, the Ground Self-Defense Force (GSDF) marked the launch of five new electronic warfare units. Such developments are expected to drive the market's growth in the region during the forecast period.

Competitive Landscape

The electronic warfare market is highly fragmented due to many players offering several products across various segments of the market. Some prominent electronic warfare market players are Lockheed Martin Corporation, Raytheon Technologies Corporation, BAE Systems plc, L3Harris Technologies, and Northrop Grumman Corporation. The international players have a higher market share than the regional players due to significantly high investments in R&D and a high geographical presence. The competition in the market is further expected to increase with the development of new products and the consolidation of the market. The armed forces are collaborating with companies to develop advanced technologies in electronic warfare, such as radio frequency-enabled cyber (cyber capabilities within electronic warfare systems). Investments in such technologies are anticipated to help the companies increase their share in the market in the coming years.

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