Electronic Warfare demand is Estimated to Witness High Growth Owing to Increasing Defense Budget Allocations

Electronic warfare involves the use of electromagnetic energy to control the electromagnetic spectrum or to attack the enemy. It also plays important roles in intelligence gathering and self-protection. The electronic warfare demand comprises various radar warning receivers, electronic support measures, directed energy weapons, electronic countermeasures, and jamming devices used by airborne, naval, and land-based platforms. The growing advancement across communication technologies, connectivity, and networked platforms has significantly increased vulnerabilities, thereby driving demand for effective electronic warfare systems.

The electronic warfare demand is estimated to be valued at USD 19.56 Billion in 2025 and is expected to reach USD 29.43 Billion by 2032, growing at a compound annual growth rate (CAGR) of 6.0% from 2025 to 2032.

Key Takeaways

Key players operating in the electronic warfare demand are BAE Systems plc, Elbit Systems Ltd., General Dynamics Corporation, Israel Aerospace Industries Ltd., L3Harris Technologies Inc., Leonardo SpA, Lockheed Martin Corporation, Northrop Grumman Corporation, Raytheon Technologies Corporation, SAAB AB, Thales Group, Mistral Solutions Pvt. Ltd., Chelton Limited.

The electronic warfare demand offers significant growth opportunities owing to ongoing technological advancements and increasing spending on connected warfare systems. In addition, the development of microelectronics and directed energy weapons is expected to open new avenues over the forecast period.

Major players are focusing on global expansion through partnerships, mergers, and acquisitions to enhance their geographic footprint and product portfolios. For instance, in 2021, Leonardo completed the acquisition of Kopter to strengthen its capabilities in the military helicopter demand.

drivers

The key driver boosting the electronic warfare demand growth is the increasing defense budgets across major economies such as the US, China, and India. According to data by Stockholm International Peace Research Institute, global military expenditure rose to nearly $2 trillion in 2020, an increase of 2.6% from 2019 levels. With geopolitical tensions on the rise, more countries are allocating higher funds for enhancing their electronic warfare capabilities. This rising expenditure on defense capabilities is expected to drive demand over the next few years.
PEST Analysis

Political: The Electronic Warfare demand is influence by defense budget allocation and government investment towards countermeasures against modern aerial threats and national security. New policies and regulations can impact industry players.

Economic: Current global economic conditions influence spending on defense equipment. Fluctuations in GDP affect procurement budget of armed forces and investments in EW technologies. Upgrading of legacy systems also requires financial resources.

Social: Evolving nature of warfare and asymmetric threats influences modernization plans of armed forces. Growing deployments in geographically strategic regions increase demand for electronic protection and surveillance systems. Public support for defense spending impacts long-term planning.

Technological: Rapid innovation in integrated circuits, sensors, software defined technologies, signals intelligence tools enable development of miniaturized and intelligent EW payloads. Upgradation of existing systems with artificial intelligence, electronic attack and electronic protection capabilities to counter evolving threats drives growth.

Geographical concentration: In terms of value, the Electronic Warfare demand is primarily concentrated in North America led by US defense spending. Modern armed forces in Europe also represent significant procurement of EW systems for land, air and naval applications due to ongoing upgrade programs. Budget allocation of emerging economies in Asia Pacific is further expanding regional size.

Fastest growing region: The Asia Pacific Electronic Warfare demand is forecast to be the fastest growing region till 2031 supported by increased defense budgets of countries such as India, Japan and South Korea. Evolving geopolitical situation, border threats and maritime security concerns are driving procurement of modern EW capabilities in the region. Indigenous development programs also contribute to regional growth. Expanding trade relations increase collaborationsbetween international and domestic players.

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