Global Military Electro-optical and Infrared Systems Market Growth, Share, Size, Trends and Forecast (2025 - 2031)

Recent Developments

• October 2023: DARPA, the US Defense Advanced Research Projects Agency, issued a broad agency announcement for the INSPIRED project, aiming to develop compact optical sensors using squeezed light technology. These sensors are intended to have reduced size, weight, and power consumption while achieving sensitivity below the quantum-shot noise limit.

• June 2022: Excelitas Technologies Corp. showcased its latest thermal imaging and camera technologies for military applications at the Close Combat Symposium. Among the products featured was the DRAGON-S12 Non-Cooled Thermal Attachment Sniper Sight, equipped with a 60Hz uncooled thermal sensor and a near-silent aperture. Another highlight was the PHOENIX-S product, designed for ground-based sniper missions, boasting early target detection, recognition, and identification capabilities even in low-light conditions.

• May 2022: Israel Aerospace Industries (IAI) secured a contract to supply its MiniPOP electro-optical/infrared (EO/IR) systems to the Philippine Navy's patrol vessels. The MiniPOP system integrates four sensors into a single optical payload, including a MWIR thermal imager, an HD-CMOS day color camera, a laser rangefinder, and an IR laser pointer.

• February 2023: Northrop Grumman Corporation was awarded the initial production and operations contract for the Next Generation Handheld Targeting System (NGHTS) by the US Marine Corps. NGHTS is a portable targeting system that offers high-precision targeting capabilities, particularly useful in GPS-denied environments.

• July 2022: Lockheed Martin Corporation procured 22 360-degree electro-optical sensor systems from Raytheon Technologies Corporation for the US F-35 joint strike fighter under a USD 22.6 million contract. These systems enhance situational awareness by providing real-time imagery from six IR cameras to the pilot's helmet-mounted display.

• October 2022: L3Harris Technologies Inc. delivered its WESCAM MX-25D imaging system as part of the US Air Force Special Operations Command's AC-130J Ghostrider modernization program. This electro-optical/infrared system serves as the primary imaging asset for intelligence, surveillance, and reconnaissance missions, contributing to enhanced operational capabilities.

In this report, the Military Electro-optical and Infrared Systems Market has been segmented by Platform, Cooling Technology, System, Imaging Technology, and Geography.

Military Electro-optical and Infrared Systems Market, Segmentation by Platform

The Military Electro-optical and Infrared Systems Market has been segmented by Platform into Air-based, Land-based, and Sea-based.

Air-based
The air-based segment holds a significant share in the Military Electro-optical and Infrared Systems Market due to the growing demand for surveillance and reconnaissance missions by airborne platforms. These systems are widely deployed in fighter jets, drones, and helicopters, accounting for around 45-50% of the total market share. Their ability to provide real-time, high-resolution imagery and thermal detection is critical for modern aerial combat and intelligence gathering.

Land-based
The land-based electro-optical and infrared systems are extensively used for ground surveillance, target acquisition, and navigation in various military vehicles and command centers. This segment represents approximately 30-35% of the market and benefits from advances in sensor technology, which enhance battlefield awareness and force protection during both day and night operations.

Sea-based
The sea-based segment, covering naval vessels and submarines, contributes around 15-20% to the overall market. These systems are crucial for maritime reconnaissance, navigation, and threat detection in harsh oceanic environments. The increasing need for naval security and anti-submarine warfare is driving growth in this segment, with a focus on integrating EO/IR technology into shipborne platforms.

Military Electro-optical and Infrared Systems Market, Segmentation by Cooling Technology

The Military Electro-optical and Infrared Systems Market has been segmented by Cooling Technology into Cooled, and Uncooled.

Cooled
The cooled segment leads the Military Electro-optical and Infrared Systems Market, capturing about 55-60% of the share due to its exceptional sensitivity and accuracy. By using cryogenic cooling to minimize sensor noise, these systems excel in long-range detection and perform reliably in challenging environments. They are essential for high-precision applications such as missile tracking, targeting, and advanced surveillance missions.

Uncooled
Uncooled EO/IR systems are increasingly popular for their affordability, compact design, and minimal maintenance. Making up roughly 40-45% of the market, these systems are ideal for portable and short-range use cases, including soldier weapon sights and unmanned aerial vehicles (UAVs). Continuous improvements in microbolometer technology are enhancing their performance, boosting their adoption across various military platforms.

Military Electro-optical and Infrared Systems Market, Segmentation by System

The Military Electro-optical and Infrared Systems Market has been segmented by System into Laser, Targeting, and Imaging.

Laser
The laser segment is a critical part of the Military Electro-optical and Infrared Systems Market, accounting for approximately 35-40% of the market share. These systems offer precise targeting, range finding, and designation capabilities essential for missile guidance and target tracking. Their speed and accuracy make them indispensable in modern combat scenarios, ensuring effective engagement and reduced collateral damage.

Targeting
Targeting systems represent about 30-35% of the market, providing enhanced weapon accuracy by integrating electro-optical and infrared sensors. Widely deployed across both ground and aerial platforms, these systems enable real-time target lock-on and tracking, boosting mission success rates under diverse operational conditions.

Imaging
Imaging systems make up roughly 25-30% of the Military EO/IR market and are key for reconnaissance, surveillance, and situational awareness. They deliver high-resolution visual and thermal imagery, aiding battlefield monitoring and intelligence gathering. Advances in sensor resolution and image processing technologies are driving the growth of this segment, making it essential for modern military operations.

Military Electro-optical and Infrared Systems Market, Segmentation by Imaging Technology

The Military Electro-optical and Infrared Systems Market has been segmented by Imaging Technology into Scanning, Starring, Hyperspectral, and Multispectral.

Scanning
The scanning segment in the Military Electro-optical and Infrared Systems Market is known for its ability to cover large areas quickly by systematically scanning the environment. This technology is widely used for surveillance and target detection, offering comprehensive monitoring capabilities. Scanning systems contribute significantly to real-time data collection and are crucial in dynamic combat zones.

Starring
Starring technology utilizes a fixed array of detectors to capture images without mechanical movement, providing faster and more reliable image acquisition. This segment supports high-speed target tracking and surveillance, making it ideal for applications where quick response is critical. Starring systems enhance image clarity and reduce mechanical failure risks.

Hyperspectral
Hyperspectral imaging systems capture data across hundreds of narrow spectral bands, enabling detailed analysis beyond visible light. This technology allows for precise material identification and environmental monitoring, representing a growing segment in military EO/IR applications. Hyperspectral systems improve target discrimination and intelligence gathering by revealing subtle spectral differences.

Multispectral
Multispectral imaging captures data in several broad spectral bands, providing valuable information for surveillance, reconnaissance, and targeting. This technology balances high performance with lower complexity compared to hyperspectral systems and is widely adopted for battlefield awareness. Multispectral systems contribute to enhanced situational awareness and decision-making in military operations.

Military Electro-optical and Infrared Systems Market, Segmentation by Geography

In this report, the Military Electro-optical and Infrared Systems Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East and Africa, and Latin America.

Military Electro-optical and Infrared Systems Market Share (%), by Geographical Region

North America
North America dominates the Military Electro-optical and Infrared Systems Market, holding a significant share due to strong defense budgets and advanced technological infrastructure. The region accounts for approximately 35-40% of the market, driven by extensive military modernization programs and high adoption of EO/IR systems across air, land, and sea platforms.

Europe
Europe represents about 25-30% of the market, fueled by increasing defense expenditure and strategic initiatives to upgrade military surveillance and targeting systems. Key countries like the UK, Germany, and France invest heavily in EO/IR technologies to enhance their defense capabilities.

Asia Pacific
The Asia Pacific region is witnessing rapid growth with a market share of roughly 20-25%, propelled by rising geopolitical tensions and expanding military budgets in countries such as China, India, and Japan. Increasing demand for advanced EO/IR systems in border security and maritime surveillance drives this expansion.

Middle East and Africa
Middle East and Africa hold around 10-12% of the market, supported by growing defense spending focused on enhancing situational awareness and counterterrorism operations. Investments in EO/IR systems for border control and naval security contribute to market growth.

Latin America
Latin America accounts for approximately 5-7% of the market, with steady growth due to modernization efforts and increasing adoption of EO/IR technologies in surveillance and reconnaissance. Countries like Brazil and Mexico are key contributors to this segment.

This report provides an in depth analysis of various factors that impact the dynamics of Global Military Electro-optical and Infrared Systems Market. These factors include; Market Drivers, Restraints and Opportunities.

Drivers:

• Increasing Geopolitical Tensions
• Rising Demand for ISR Capabilities
• Military Modernization Initiatives
• Counterterrorism and Counterinsurgency Operations

• Rapid Growth in Unmanned Systems - One of the primary drivers fueling the rapid growth in unmanned systems is the increasing demand for advanced and autonomous capabilities in military operations. Unmanned systems, including unmanned aerial vehicles (UAVs), unmanned ground vehicles (UGVs), and unmanned maritime vehicles (UMVs), offer unique advantages such as extended endurance, reduced risk to human personnel, and enhanced situational awareness. These systems play a crucial role in various military applications, including reconnaissance, surveillance, target acquisition, and strike missions, contributing to operational efficiency and mission effectiveness. The proliferation of unmanned systems reflects the growing reliance on autonomous technologies to augment the capabilities of manned platforms and address evolving security challenges.

  Additionally, advancements in technology have led to the development of more sophisticated and versatile unmanned systems with enhanced capabilities and functionalities. Improved sensor technologies, artificial intelligence (AI) algorithms, and communication systems enable unmanned systems to operate autonomously, adapt to dynamic environments, and perform complex missions with higher precision and reliability. As military organizations worldwide prioritize modernization efforts and invest in unmanned systems, the market for unmanned platforms and associated technologies continues to expand rapidly, driven by the need for innovative solutions to address emerging threats and operational requirements.
  

Restraints:

• Complex Integration Challenges
• Export Controls and Regulations
• Limited Operational Range and Endurance
• Interoperability Issues

• Vulnerability to Electronic Warfare - Despite their numerous advantages, unmanned systems are vulnerable to electronic warfare (EW) threats, posing significant challenges to their operational effectiveness and survivability. Electronic warfare encompasses a range of offensive and defensive measures aimed at disrupting, deceiving, or denying enemy electronic systems and communications. Unmanned systems rely heavily on electronic sensors, communication links, and navigation systems, making them susceptible to EW attacks such as jamming, spoofing, and cyber intrusions. These attacks can disrupt command and control communications, compromise data integrity, and degrade the performance of unmanned systems, thereby limiting their operational capabilities and mission success rates.

  The increasing sophistication and proliferation of EW technologies pose evolving threats to unmanned systems across land, sea, and air domains. Adversaries continue to develop advanced EW capabilities to exploit vulnerabilities in unmanned platforms and exploit weaknesses in their electronic systems. As a result, defense organizations must invest in countermeasures and mitigation strategies to enhance the resilience of unmanned systems against EW threats. Developing robust cybersecurity measures, implementing frequency-hopping techniques, and incorporating redundancy and diversity in communication links are essential steps to mitigate the vulnerabilities of unmanned systems to electronic warfare and safeguard their operational integrity and effectiveness.
  

Opportunities:

• Investment in Artificial Intelligence (AI) and Machine Learning
• Expansion of EO/IR System Applications
• Focus on Export Market Expansion
• Investment in Next-Generation EO/IR Technologies

• Focus on Miniaturization and Lightweight Solutions - In recent years, there has been a growing emphasis on miniaturization and lightweight solutions in military electro-optical and infrared (EO/IR) systems, presenting significant opportunities for innovation and market growth. Miniaturization involves the development of compact and lightweight EO/IR systems that offer enhanced mobility, portability, and versatility for military applications. These systems are designed to be integrated into various platforms, including unmanned aerial vehicles (UAVs), soldier-worn devices, and ground vehicles, without compromising performance or functionality.

  The demand for miniaturized and lightweight EO/IR systems is driven by several factors, including the need for increased maneuverability and agility in modern warfare scenarios. Compact and lightweight systems enable military personnel to carry and deploy EO/IR capabilities more effectively, enhancing situational awareness and operational effectiveness in diverse environments. Advancements in materials science, optics, and electronics have facilitated the development of innovative solutions that achieve high performance levels while minimizing size, weight, and power consumption (SWaP), making them ideal for integration into constrained platforms and resource-limited environments.
  

Key players in Global Military Electro-optical and Infrared Systems Market include,

• BAE Systems plc
• Elbit Systems Ltd.
• Teledyne FLIR LLC
• Israel Aerospace Industries Ltd.
• L3Harris Technologies Inc.
• Leonardo S.p.A
• Lockheed Martin Corporation
• Raytheon Technologies Corporation
• Rheinmetall AG
• Saab AB
• THALES
• Ultra Electronics Holdings

In this report, the profile of each market player provides following information:

• Company Overview and Product Portfolio
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis