Military Embedded Systems Market Report 2025

The military embedded systems market size has grown strongly in recent years. It will grow from $1.75 billion in 2024 to $1.92 billion in 2025 at a compound annual growth rate (CAGR) of 9.6%. The growth in the historic period can be attributed to advancements in microelectronics, global security challenges, demand for real-time data processing, cybersecurity concerns, evolution of unmanned systems.

The military embedded systems market size is expected to see strong growth in the next few years. It will grow to $2.71 billion in 2029 at a compound annual growth rate (CAGR) of 9.1%. The growth in the forecast period can be attributed to interoperability in joint operations, enhanced cyber resilience, focus on energy efficiency, application in space-based systems, use in hypersonic weapon systems, global military modernization initiatives. Major trends in the forecast period include rapid advancements in processing power, increased use of high-performance computing (HPC), focus on size, weight, and power (swap) optimization, integration of artificial intelligence (ai) and machine learning (ml), use of open architecture standards, multi-domain operations capability.

The increasing prevalence of global terrorism is expected to drive growth in the military embedded systems market. Terrorism is characterized by non-state actors who employ illegal force and violence to achieve political, economic, religious, or social objectives through fear and intimidation. Consequently, the demand for security screening systems, including military embedded systems, has surged, as they play a critical role in tracking and countering terrorist activities. For instance, a report from the Institute for Economics and Peace (IEP), an Australia-based research organization focused on peace metrics, indicated in March 2023 that, in 2022, the average number of deaths per terrorist attack increased by 0.4. This resulted in a higher lethality rate, with an average of 1.7 fatalities per attack, compared to 1.3 deaths per attack in 2021. Additionally, there were 6,701 reported deaths due to terrorist actions in 2022. Therefore, the rising incidence of terrorism globally is driving the demand for military embedded systems.

The upward trajectory in defense spending is projected to propel the growth of the military embedded systems market. Governments globally prioritize modernizing military hardware, resulting in a substantial increase in unmanned applications and expanding opportunities within the military embedded systems market. Notably, the Stockholm International Peace Research Institute's report in April 2023 revealed a 3.7% rise in global military expenditure, reaching a record high of $2.24 trillion in 2022. The report highlighted a 13% increase in military spending in Europe and an 8.8% nominal rise in US military spending, indicating the robust growth in defense spending driving the military embedded systems market.

Innovations in product offerings emerge as a dominant trend within the military embedded systems market. Key market players focus on developing novel products to meet evolving customer demands. For instance, Pratt & Whitney's introduction of Percept in June 2023, an AI-based aircraft engine inspection tool - represents an innovative approach. This advanced tool incorporates artificial intelligence to provide real-time insights into aircraft engine conditions, offering maintenance personnel comprehensive information on parts availability. Percept, categorized as a military embedded system, acts as a multi-sensor AI platform, facilitating real-time situational awareness and decision support for military operations. The tool's cloud-based computing system enables quick and comprehensive engine inspections, automating the process and significantly reducing inspection time by 90%.

Prominent companies operating within the military embedded systems market are leveraging strategic collaborations and partnerships to gain a competitive edge. These alliances aim to enable real-time virtualization in embedded avionics through military embedded software extraction. For instance, the collaboration between Northrop Grumman Corporation and Curtiss Wright in July 2022 focuses on virtualizing outdated military avionics systems by migrating software from obsolete communication, navigation, and surveillance hardware to contemporary embedded processor architectures. This strategic partnership aims to transition software from outdated hardware to modern embedded computing architectures, reflecting the intent to streamline embedded avionics systems in various in-service U.S. military aircraft.

In September 2024, Honeywell International Inc., a US-based industrial technology company, acquired CAES Systems Holdings LLC (CAES) for $1.9 billion. This acquisition enables Honeywell to strengthen its defense and aerospace portfolio by incorporating CAES' advanced radio frequency (RF) technologies. CAES Systems Holdings LLC (CAES) is a US-based provider of military electronic equipment, focusing on embedded systems.

Major companies operating in the military embedded systems market are Xilinx Inc., Mercury Systems Inc., Curtiss-Wright Corporation, Kontron (S&T), SMART Embedded Computing, Advantech Co Ltd., Thales Group, Abaco Systems, Microsemi Corporation, General Micro Systems Inc., BAE Systems, Intel Corporation, Radisys Corporation, Telephonics Corporation, General Dynamics Corporation, Raytheon Company, Rockwell Collins, AMETEK, Saab AB, Boeing, Concurrent Technologies, Crystal Group Inc., Elma Electronic Inc., Excalibur Systems, Northrop Grumman Corporation, ECRIN Systems, Harris Corporation, Honeywell International Inc., IBM Corporation.

North America was the largest region in the military embedded systems market in 2024. Asia-Pacific is expected to be the fastest-growing region in the military embedded systems market report during the forecast period. The regions covered in the military embedded systems market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the military embedded systems market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

A military embedded system encompasses both hardware and software designed explicitly for a wide range of military applications. These systems are tailored to perform specific functions, including electronic warfare, satellite-based surveillance, radar systems, and managing military traffic.

Military embedded systems predominantly consist of hardware and software components. The hardware includes crucial elements like user interfaces, input/output interfaces, displays, and memory. These systems are deployed across various platforms, including land, airborne, naval, and space, either as new installations or upgrades. They leverage technologies like edge computing, fog computing, and mist computing, applied in intelligence, surveillance, reconnaissance (ISR), command and control, communication, navigation, electronic warfare, weapon and fire control, wearable technology, and other military applications.

The military embedded systems market research report is one of a series of new reports that provides military embedded systems market statistics, including military embedded systems industry global market size, regional shares, competitors with a military embedded systems market share, detailed military embedded systems market segments, market trends and opportunities, and any further data you may need to thrive in the military embedded systems industry. This military embedded systems market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The military embedded systems market includes revenues earned by entities by providing services such as intelligence, surveillance, reconnaissance (ISR), communication, navigation, command, and control. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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