Electro-Optical/Infrared (EO/IR) Systems Market Size, Share and Industry Analysis, By Systems (Imaging System and Non-Imaging System), By Technology (Cooled and Uncooled), By Sensor Technology (Staring Sensor and Scanning Sensor), By Imaging Technology (Multispectral and Hyperspectral), By wavelength (Ultraviolet, Near Infrared, Short Wavelength Infrared), By Platform (Airborne, Land, and Marine/Naval), By End User, and Regional Forecast 2019-2026

The global electro-optical/infrared (EO/IR) systems market size was valued at USD 13.15 billion in 2018 and is projected to reach USD 31.69 billion by 2032, exhibiting a CAGR of 7.0% during the forecast period.

The EO/IR system is an electronic device that consists of both electro-optical and infrared sensors, that provide accurate optical information during the day as well as night. An electro-optical sensor has the ability to convert the light into the electric signal. Moreover, the infrared sensor can detect any structure in its surroundings by either emitting or detecting infrared radiation. Thus, an EO/IR system is mainly used to enhance target identification, assess threats from a specific distance, target monitoring in different weather conditions. The EO/IR system can be mounted on vehicles, aircraft, ships, helmets, military weapons, or it can be used as a hand-held detection device.

Owing to high image stabilization and long-range imaging features, an EO/IR system is used to improve the capabilities of the military as well as commercial applications. Especially in the defense sector, it is widely used for various applications, including situational awareness, fire control system, airborne homeland security, search, and rescue, and intelligence, surveillance, and reconnaissance (ISR).

Furthermore, the electro-optical/infrared system is divided into imaging EO/IR and non-imaging EO/IR systems. The non-imaging EO/IR systems are largely focused on long-range target monitoring tasks, whereas, the imaging system is dedicated to scanning the structure and delivering noise-free images for accurate detection. On the basis of technology, the EO/IR systems market is bifurcated into cooled and uncooled. Based on sensor technology, the market is segmented into staring and scanning. On the basis of imaging technology, the electro-optical/infrared (EO/IR) systems market is divided into multispectral, and hyperspectral. The development of advanced sensor technology-based systems is increasing to meet with end-users numerous application demands.

This EO/IR system market is mainly driven by the growing adoption of advanced sensors integrated systems for military applications. Additionally, the market is further driven by the rising demand for unmanned vehicles in the detection and surveillance application. Also, the rising trend towards miniaturization will aid the development of advanced, highly efficient, small-sized, and portable EO/IR systems for situation awareness and ISR application across the world.

MARKET TRENDS

Growing Miniaturization of Military Electronics Systems is Propelling the Market Growth

The adoption of micro-sized system components is growing by various industry verticals including aerospace & defense, consumer electronics, automotive, and medical, among others to meet with the growing demand for portable electronic devices. Therefore, the manufacturers are focusing on the deployment of miniaturized devices to meet the growing demand. These small-sized devices have the capability to provide enhanced performance and high reliability which makes it an ideal choice for commercial and military aircraft applications.  

Moreover, the aerospace industry is stringent in the requirements of aircraft component’s size and weight. Therefore, the demand for miniaturized systems is increased by the aviation industry. Thus, the manufacturers are focusing on the design and development of miniaturized EO/IR systems to reduce payloads and improve system performance. These miniaturized electro-optical/infrared systems are supporting the development of lightweight laser designators besides improving the efficiency of military operations and the safety of army personnel. Therefore, the rising integration of EO/IR systems in manned and unmanned vehicles for ISR and military missions is expected to aid market growth. 

MARKET DRIVERS

Increased Adoption Of Sensors Integrated Systems To Improve The capabilities of Military Applications

The EO/IR system consist of an integrated electro-optical sensor and infrared sensor. These two sensors combinedly provide the information of target present at different wavelengths such as ultraviolet, near-infrared, short-wavelength infrared, medium wavelength infrared, and long-wavelength infrared. The provided information can be in an image or a signal format depending upon the configuration of the EO/IR system. The non-imaging Eo/IR system is mainly focusing on target point detection, for example, infrared search and track system (IRST). Moreover, the imaging system offers a detailed image of the target from different wavelengths in different weather. This information helps achieve more accurate target details in a day as well as night.

Furthermore, EO/IR system operates based on either staring sensor technology or scanning sensor technology. In scanning sensor technology, a limited number of detectors are used to scan the area. While in staring technology, a large number of detectors are used in rectangular arrays. Therefore, an EO/IR sensor-based system is widely used for multiple applications, such as border monitoring, target tracking, situational awareness, C5ISR, and tactical mission, among others. The EO/IR sensor technology is also used to develop night vision goggles used for ground military tactical missions.

Rising Procurement of Upgraded Unmanned Aerials Vehicles (UAVs) with Integrated EO/IR System

Evolving manufacturing technologies is boosting the development of unmanned vehicles for land, sea, and air platforms. The usage of unmanned vehicles is constantly growing for multiple military and commercial applications such as surveillance, policing, navigation, product deliveries, photography, and agricultural monitoring, among others.

Among these, the defense sector witnesses the high adoption of unmanned vehicles for military applications with the advancement in remote operations. The current unmanned vehicles have integrated sensors and cameras that provide several wavelength information for accurate detection and monitoring. Generally, the EO/IR sensors are mounted on most of the UAVs to get accurate data and noise-free image of target present at long-range or mid-range wavelength. The UAVs are also used for situational awareness and intelligence, surveillance, and reconnaissance applications

Moreover, worldwide defense spending is increasing with growing nation threats. Thus, to strengthen the nation's defense sector, the procurement and development of advanced UAV with integrated long-range, noise-free image sensing capability EO/IR systems is rising. This is the key factor that is propelling the EO/IR systems market growth.

MARKET RESTRAINT

Stagnant Product Timeframe of Electro-Optical/Infrared (EO/IR) Systems is Expected To Hamper the Market Growth

The EO/IR system has 15 to 20 years of life span depending on its real-time use. The military systems are always upgraded only after the completion of the system life period. Also, the new system with evolving technology will not able to procure military applications before the completion of the life span of the existing military system. This will keep electro-optical/infrared (EO/IR) systems technology adoption remain stagnant for a long-time, is expected to hamper the market growth.

SEGMENTATION

By Systems Analysis

Increased Adoption of Imaging System for Situational Awareness Application

Based on the systems, the market has been classified into imaging and non-imaging EO/IR systems. Among these, the imaging EO/IR system is expected to drive at a significant CAGR during the forecast period. The growth is attributed to the increased adoption of the EO/IR imaging system for extended target tracking and detection.

The EO/IR system consists of a thermal imaging camera. The detectors used for thermal imaging cameras are developed using specific material. This material plays an important role in the performance of EO/IR integrated sensors. Moreover, the chemical composition of a thermal imaging camera detector material can affect the sensitivity of the EO/IR sensor and define the spectral band of the cool and uncool detector. Furthermore, the new cooled, imaging EO/IR systems offer long-range, high image quality target detection. These imaging EO/IR system offers the fine detailing of the target area, which helps to extract accurate target information. Therefore the adoption of cool imaging EO/IR system is increased for situational awareness.

By Technology Analysis

Increased demand for Low-Cost Thermal Imaging Camera to Develop Imaging EO/IR System

By technology, the EOIR market has been segmented into cool and uncool technology. The cool EO/IR system technology is expected to grow at a higher compound annual growth rate during the forecast period. This higher growth is due to the development of cost-efficient cooling technology. This technique is largely used to reduce the overall cost of a thermal imaging camera. Therefore, the demand for cool thermal imaging cameras is increased to develop the imaging EO/IR system. This demand is boosting the growth of the cool technology segment.

By Sensor Technology Analysis

Rising Demand for Staring Sensor Technology Based EO/IR System for Quick Representation of Target Image

On the basis of sensor technology, the EO/IR system market has been classified into the staring sensor and scanning sensor. Win scanning technology-based system, an image of the target area, is generated column by column or row by row. Thus, it takes a longer time to display a complete image.

While in starting a sensor technology-based system, an image is projected simultaneously into all pixels of the detector array. Therefore, the target image display time with staring sensor technology is shorter than the scanning sensor technology. Therefore, the adoption of a staring sensor technology-based EO/IR system is rising during the forecast period.

By Imaging Technology Analysis

Growing Need for Fine Information Provider Imaging Technology to Enhance Detection Capabilities

By imaging technology, the EO/IR systems market has been segmented into a multispectral and hyperspectral imaging technology. Among these, the multispectral imaging technology dominates the market owing to its large adoption in multiple applications, including military target tracking, remote sensing, land mine detection, ballistic missile detection, farming, serving and mapping, and environmental monitoring among other. However, hyperspectral imaging technology witness a high growth rate. This growth is attributed to the rise in the adoption of hyperspectral imaging technology to produce an image with fine detailing. Moreover, an image generated from hyperspectral imaging technology contains large data than images from multispectral imaging technology. Hyperspectral imaging technology has the ability to detect differences between sea and land features.

By Wavelength Analysis

Rising Demand for Long Wavelength Infrared Tracking EO/IR System to Enhanced Soldier Safety

On the basis of wavelength, this market has been bifurcated into the ultraviolet, near-infrared, short-wavelength infrared, medium wavelength infrared, and long-wavelength infrared. Among these wavelengths, the long-wavelength infrared segment is expected to grow at a higher CAGR. This growth is attributed to the increased demand for long-range image tracking to improve soldier safety.

By Platform Analysis

High Adoption of Unmanned Aerial Vehicle for Military and Commercial Application

Based on the platform, the market has been segmented into land, sea, and air. In 2018, the air segment dominated this market due to the increased adoption EO/IR system for UAV applications such as situational awareness, detection, ISR, mapping, search & rescue, and product delivery. It is also used for applications in which a camera is used to monitor and accumulate data and transmit video information data to the ground-based control stations.

By End-User Analysis

Increased Usage of UAVs For Situational Awareness Application

The Global electro-optical/infrared systems market based on the end-user industry has been segmented into commercial and military. The military user's segment is dominating the market due to increased procurement and development of UAVs with the EO/IR system. The growing military modernization programs and increased defense spending is led to the increasing adoption of highly reliable and efficient multi-sensor EO/IR systems.

REGIONAL ANALYSIS

The findings based on our analysis indicate North America held the largest share in 2018. Moreover, the region has the presence of major players, and OEMs will facilitate growth in the region. As per our EOIR market research study, Asia Pacific is expected to witness strong growth in the market during the forecast period owing to the significant increase in military expenditure with growing territorial issues. Therefore, the armed forces in this region are spending largely in the military electronics system modernization programs. Moreover, the increasing development and procurement of advanced military aircraft and unmanned vehicles for military missions is expected to spur demand for efficient systems such as EO/IR system. Such innovations are boosting the electro-optical/infrared systems market growth during the forecast period.

For instance, Elbit Systems Ltd. announced that it was awarded a contract worth USD 670 million to supply the military solution to a country in Asia-Pacific.

KEY INDUSTRY PLAYERS

Constant Innovation Strategy Has Adopted by The Key Player, To Sustain in The Market

The electro-optical/infrared systems market is largely fragmented, with numerous manufacturers present across the world. The leading companies are adopting organic and inorganic growth strategies such as mergers and acquisitions, a large investment in R&D, continuous Systems innovation, long-term Systems providing contracts with the government to support the growth of the market.

LIST OF KEY COMPANIES PROFILED:

• Lockheed Martin Corporation (The US)


• Raytheon Company (The US)


• Leonardo S.p.A. (Italy)


• Elbit Systems Ltd. (Israel)


• L-3Harris Technologies Inc. (The US)


• BAE Systems PLC. (The UK)


• Thales Group (France)


• Northrop Grumman Corporation (The US)


• General Dynamics (The US)


• UTC Aerospace (The US)


• Rheinmetall AG (Gernamy)


• Saab Group (Sweden)

KEY INDUSTRY DEVELOPMENTS:

• In February 2021, Elbit Systems Ltd. announced that it had received a four and half year, an approximately USD 82.0 million worth contract from BAE Systems Hägglunds AB to provide the Royal Netherlands Army with electro-optical commander sights and active protection systems.


• In January 2021, Leonardo DRS, a subsidiary of Leonardo S.p.A., announced that it had received a multi-year contract worth USD 600 million from the U.S. Army to provide mission equipment packages. This contract was processed under the initial maneuver-short range air defense (IM-SHORAD) program. The mission equipment packages will be including a 30 mm M230LF cannon, electro-optical/infrared (EO/IR) sighting system, electronic warfare solutions, radar, Hellfire rockets, and stinger missiles.


• In December 2020, L-3Harris Technologies Inc. announced that it had received a contract from Armasuisse, the Swiss federal office for defense procurement. According to this contract, the company has agreed to provide around 100 WESCAM MX-RSTA EO/IR systems to the Swiss Armed Forces to support the latter’s TASYS tactical reconnaissance system.


• In December 2020, Amentum Services, Inc. announced that it had secured a five-year, USD 88.0 million worth contract from the Department of Defense (DoD) to provide Navy EO/IR Tech R&D Services.


• In September 2020, Lockheed Martin Corporation, headquartered in Maryland, the U.S., announced that it had delivered 700th Electro-Optical Targeting System (EOTS) for the F-35 Lightning II.

REPORT COVERAGE

The report offers qualitative and quantitative insights on the electro-optical/infrared (EO/IR) systems and detailed analysis of market size & growth rate for the segments in the market.

Along with this, the report provides an elaborative analysis of market dynamics, emerging trends, and competitive landscape. Key insights offered in the report are the adoption of advanced technology, recent industry developments such as partnerships, mergers & acquisitions, consolidated SWOT analysis of key players, Porter’s five forces analysis, business strategies of leading market players, macro and micro-economic indicators, and key industry trends.

Report Scope & Segmentation