AIR DEFENSE SYSTEMS MARKET ANALYSIS

The global air defense systems market size was valued at US$ 14.9 million in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 13.70% from 2023 to 2030. The Air Defense Systems market is a growing market with considerable growth opportunities. Rising demand for efficient and effective air defense systems is a driving force behind the market's rapid growth. Moreover, technological advances in the weapon systems are also creating favorable conditions for the industry. As a result, the market is likely to witness an increased growth during the forecast period.

Global Air Defense Systems Market: Regional Insights

Among regions, North America is anticipated to witness significant growth in the global air defense systems market over the forecast period. Countries across this regions are increasing their budge for regional and homeland missile defense. Moreover, the procurement of advanced weaponry is increasing in the U.S. Moreover, the U.S. and Canada are partners in the air defense market in the region, under the agreement, the North American Aerospace Defense (NORAD), under which both the countries operate an integrated and interoperable air surveillance and control system for securing the North American airspace.

Furthermore, Asia Pacific is also expected to witness strong growth in the global air defense systems market over the forecast period. This growth can be attributed to increase in the budget of countries such as China, Japan, and India across the region. For instance, in December 2019, government of Japan approved its eighth straight hike for defense expenditure claiming US$ 48.56 billion, which a 1.1% of increase from the previous year. These factors are expected to support growth of the global air defense systems market in the Asia Pacific region.

Figure 1: Global Air Defense System Market Share (%), By Region, 2021

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Global Air Defense Systems Market Drivers:

Growing defense expenditure to boost the market growth

The international strategic landscape is changing profoundly, due to which the configuration of international security systems has been weakened by the increasing unilateralism, hegemonism, and power politics that is fueling various global conflicts. As the most common reaction to this, governments around the world are increasing their expenditure on military for improving the security situation in their countries. This in turn is supporting growth of the global air defense systems market.

Growing number of air-based threats leading to demand for advanced air defense capabilities to augment the market pace

The number of air-based threats are increasing, as the proliferation of novel technologies and weapon systems is growing in recent times. Due to the technical improvements and innovations in materials, the aerial threats are becoming formidable and stealthy. The capabilities of the existing defense systems being challenged by the increasing progress in missile and aircraft technologies. Thus, the demand for air defense systems is also increasing rapidly all over the world, which is expected to propel growth of the market in the near future.

Global Air Defense Systems Market Opportunities:

Growing investment in innovations by countries such as China, Russia, the U.S. and India is expected to create huge growth opportunities in the global air defense systems market over the forecast period. These countries are significantly vulnerable to aerial threats from potential adversaries. Due to this, these countries are prioritizing the deployment of advanced air defense systems for protecting their territory. Thus, it is creating various opportunities for players involved with air defense systems.

Furthermore, increasing collaborations and high demand for advanced technologies will also offer multiple business opportunities in the global air defense systems market over the forecast period. Various novel technologies such as 3D printing, Ai, and drones are increasingly being developed. This in turn will drive the pace of innovations in this market. Moreover, growing developments in materials such as advent of light fibers is also likely to crate growth opportunities in the global air defense systems market over the forecast period.

Global Air Defense Systems Market Trends:

Emergence of novel technologies is a growing trend in the market

Several countries are focused on new technologies in the defense sector. For instance, the government of China is focused on the quantum radar technology that is based on quantum illumination for stealth detection of aircraft. The quantum illumination is a process of isolating entangled photons. However, developing a reliable operational system can be challenge after overcoming shortcomings of this technology. Nevertheless, the trend of countries focusing on novel technologies is likely to continue in the global air defense systems market over the forecast period.

Growing demand for hypersonic threat detection is a major trend

The hypersonic threat detection is becoming more of a priority all over the world, the number of defense agencies working on ways to detect as well as track these threats from space, specifically from the lower orbits with the use of different EO/IR sensors is increasing. Due to the wider view from space, the tracking and targeting of advanced threats like hypersonic glide vehicles becomes more facilitated. Thus, the demand for such advanced threat detection systems is increasing all over the world, which in turn is expected to augment growth of the market.

Global Air Defense Systems Market Restraints:

Technical and compatibility issues of existing defense systems with new technologies to impede growth of the market

The emergence of new security and defense capabilities can make integrating new technologies into existing systems challenging in terms of technological compatibility and the interoperability of different technologies. Due to these issues, many procurement programs have been cancelled, and it has also threatened the potential of some procurement deals. Thus, these factors are expected to restrain growth of the global air defense systems market over the forecast period. However, with the advent of advancements air defense systems with solutions overcoming these limitations is likely to support the market growth.

Increasing global crisis and unprecedented factors to hamper the market pace

Any procurement program requires large amount of defense expenditure. Army acquisition efforts need to develop advanced solutions simultaneously to improve reliability and stealth while also maintaining improvement programs. Moreover, indigenous development and procurement of air defense systems can be expensive for the governments, as it requires higher GDP spending allocations. Moreover, factors such as slowdown of global economic growth due to disrupted pace of commodity exporters growth in regions such as the Middle East, South America, and Africa, are also expected to limit growth of the global air defense systems market over the forecast period.        

Figure 2: Global Air Defense System Market Share (%), By Platform, 2021

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Global Air Defense Systems Market Segmentation:

The global air defense systems market report is segmented into System, Platform, and Range.

Based on System, the market is segmented into Missile Defense Systems, Anti-aircraft Systems, Counter Unmanned Aerial Systems (C-UAS), and Counter-RAM. Out of which, Missile Defense Systems is expected to dominate the global market over the forecast period and this is attributed to the increasing advancement in technology creating demand for missile defense systems. Growing threat of advanced missile systems such as integration of nuclear warheads and stealth technology are occurring due to proliferation of missile technology. This in turn is expected create strong demand for missile defense systems.

Anti-Aircraft Systems segment is also expected to witness significant growth in the near future and this is owing to the growing adoption of MANPADs. The use of these shoulder-fired systems that can engage low-flying aircraft is growing in armed forces all over the globe. This in turn is creating demand for air defense systems, which in turn is expected to support the market growth.

Based on Platform, the market is segmented into Land-based, Air-based, and Sea-based. Out of which, Land-based is expected to dominate the global market over the forecast period and this is attributed to the growing technological development land-based air defense systems across several countries.

Air-Based segment is also expected to witness significant growth in the near future and this is owing to the growing focus of countries on equipping its fighter jets with advanced countermeasures. For instance, in December 2019, the U.S. Air Force tested the guided common 70-millimeter rocket, armed on the F-16 Fighting Falcon fighter jet, for intercepting a simulated cruise missile during the flight.

Based on Range, the market is segmented into Long-range Air Defense System, Medium-range Air Defense System, and Short-range Air Defense System. Out of which, Long-range Air Defense System is expected to dominate the global market over the forecast period and this is attributed to the growing focus on development of future long-range missiles having more range and lethality. Several countries are focusing on development of these systems for replacing the Army Tactical Missile System. This in turn is expected to propel growth of this segment in the near future.

Medium-range Air Defense System segment is also expected to witness significant growth in the near future and this is owing to the growing advancement in medium-range missile defense systems. These systems are likely to have an intercepting range of 8-40kms. These systems are increasing in demand, which is anticipated to support growth of the market in the coming future.

Based on Type, the market is segmented into Threat Detection, and Countermeasures. Out of which, Threat Detection is expected to dominate the global market over the forecast period and this is attributed to the growing investment by several countries in light-weight solutions providing 360-degree surveillance. These light-weight threat detection solutions can detect the missile along with other threats and their sources.

Countermeasures segment is also expected to witness significant growth in the near future and this is owing to the growing demand for countermeasures including rockets, guns, and missiles that can intercept the incoming missile threats.

Global Air Defense Systems Market: Key Developments

In February 2020, Raytheon Company announced the completion of its first RADAR Antenna array for the U.S. Army’s missile defense radar. This RADAR will be replacing Patriot Air and Missile Defense System sensors. This contract is worth US$ 384 million and will be delivering 6 units LTAMDS.

In August 2022, The United States State Department gave its approval for the resupply of Patriot missile interceptors to Saudi Arabia and (THAAD) missile interceptors to the United Arab Emirates.

In April 2022, For the US and its allies, Lockheed Martin has a deal for US$ 4.7 billion to provide radar and THAAD air defense systems, giving them a vital capability to counter short- and medium-range ballistic missiles.

In March 2022, Defense agreements between Saudi Arabia and Lockheed Martin involved the production of launchers and other components for -missile defense system.

Global Air Defense Systems Market: Key Companies Insights

The global air defense systems market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the global air defense systems market are Hanwha Defense, Raytheon Company, Aselsan AS, Israel Aerospace Industries Ltd., The Boeing Company, Rheinmetall AG, Northrop Grumman Corporation, Thales Group, Kongsberg Gruppen, Lockheed Martin Corporation, Leonardo SpA, and SAAB AB.

*Definition: Air defense systems are used to detect and destroy incoming aerial threats such as bombs, missiles, and drones. They use high-performance radars to track targets. A ground-based system can be used to detect and intercept moving targets such as ballistic missile launchers. High-resolution imaging modes are also used to classify targets and assess damage.

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