Electro Optics Market Size, Share and Trends 2024 to 2034

Electro Optics Market Size and Forecast 2024 to 2034

The global electro optics market size is calculated at USD 11.19 billion in 2024 and is anticipated to reach around USD 17.41 billion by 2034, expanding at a CAGR of 4.52% from 2024 to 2034. The rising adoption of the electro optics market is observed as they help scientists to understand the behavior and properties of light which improves data security and processing speeds.

Electro Optics Market Key Takeaways

• North America dominated the electro optics market in 2023.
• Asia Pacific is anticipated to grow at the fastest CAGR during the forecast period.
• By application, the air-based segment contributed the highest market share in 2023.
• By application, the land-based segment is expected to grow at the fastest CAGR during the forecast period.
• By end-user, the defense segment captured the biggest market share in 2023.
• By end-user, the aerospace segment is anticipated to grow with the highest CAGR from 2024 to 2034.

How is Artificial Intelligence (AI) Changing the Electro Optics Market?

The integration of artificial intelligence in the electro optics market is shaping the defense sector with electro-optics providing an advanced landscape in operations that enhance border security. The al-based solutions offer border surveillance by incorporating advanced feature cameras, radar feeds, sensors, and many more. These advanced technologies help in detecting border intrusions, target classification and enhance the accuracy of fence operations. Along with this AI helps with Unmanned aerial vehicles, lethal autonomous weapon systems (LAWS), data management, autonomous armored vehicles, and robotics.

• In May 2023, Raytheon Technologies Intelligence & Space unveiled the RAIVEN electro-optical intelligent-sensing capability, which will enable pilots to identify threats more quickly and precisely than at present.

Market Overview

The electro optics market comprises electrical engineering and manufacturing of optics and beam delivery equipment. The application of electro-optics is commonly noticed in complicated types of equipment such as lasers, LEDs, and waveguides. In a true sense, the electro-optics effect is concerned with the generation, control of propagation, and detection of electromagnetic waves. Optics means the science of light. Therefore, electro-optics is referenced as the science of electric light. Electro-optics allow scientists to have a better understanding of the behavior and properties of light and how light interacts with different matter. Detailed knowledge about electro-optics helps inventors investigate new technologies and explore new ways to increase productivity and functionality through science within the manufacturing industry.

Electro Optics Market Growth Factors

• The electro-optics sensors are highly sensitive which results in offering accurate, with the ability to be calibrated and to sense specific wavelengths, contributing to the adoption of the electro optics market.
• The electro-optics have the potential to be easily integrated into data analytics systems, producing real-time information with wide parameters and harsh environments such as fog, rain, and smoke. They can also be operated in low light or total darkness.
• These types of equipment are compact and lightweight which makes them ideal for aerial application.
• The electro-optics offer a wide dynamic range, which is another factor making them perfect for aerial applications such as onboard helicopters or at sea.
• In military applications, some types of equipment are rendered due to electromagnetic interference but electro-optics are not susceptible to EM interference, preventing hostile combatants from using EM jamming equipment.

Market Scope

Market Dynamic

Driver

Miniaturization trends

The miniaturization of the electro optics market products improves the performance, portability, and energy efficiency of devices. Technology enthusiasts and inventors seek smaller, more efficient solutions. With miniature electro-optics, the assemblies are smaller in size while maintaining or improving the device’s functionality and performance. In modern technology, enabling the creation of smaller, lighter, and more powerful electro-optics devices is driving miniaturization.

Restraint

High cost and vulnerability

Despite the application of electro-optics in various sectors, the major drawback of it is the expense due to the high cost of manufacturing, implementation, and maintenance of electro-optics. This issue is gradually being resolved with better production methods. Another limiting factor is its vulnerability which is interfered with by environmental factors such as extreme weather and physical damage. This constraint is expected to be settled by the incorporation of robust housing to protect the sensor in an electro-optical camera against adverse conditions.

Opportunity

Micro-electro-mechanical systems

The electro-optics system technology is advancing its development into micro optics electro mechanical systems which is also known as MEMS. Optical MEMS are the next generation of integrated systems. This provides the most advanced electro-optics sensors and mechanical and electrical systems that manipulate optical signals at the molecular level. MOEMS is an optical device used in telecommunication, sensing, and mobile systems such as v-grooves, gratings, shutters, scanners, filters, micromirrors, switches, alignment aids, lens arrays, and hermetic wafer-scale optical packaging. MEMS offers great accuracy for military users and provides a higher mission rate even at extremely hostile theatres.

Application Insights

The air-based segment contributed the highest share of the electro optics market in 2023 due to its high-performance intelligence, reconnaissance, and surveillance capability comprised of electro-optics and infrared systems. The imaging sensors used through EO/IR systems bands provide spherical situational awareness, long-range precision, and protection from infrared-guided missiles, that too without emitting detectable energy.

• In September 2024, the Defence Research & Development Organisation (DRDO) and the Indian Navy successfully conducted the flight test of its vertical launch short-range surface-to-air missile (VL-SRSAM). The test aimed to validate multiple updated elements of the weapon system, including the Proximity Fuse and Seeker.

The land-based segment is expected to grow at the fastest CAGR in the electro optics market during the forecast period. The electro-optics systems offer a product range that includes state-of-the-art, operationally proven gyro, accelerometers, and EO/IR payloads. These products have high performance and an excellent cost/performance ratio. The common application of electric optics in land-based is used for supporting armored fighting vehicles of various types, tracked and wheeled artillery, rockets and missile launchers. The electro-optical surveillance system is crucial for tracking down deep-space objects. Deep space orbits consist of more than 2,500 objects such as geostationary communication satellite which varies in altitude from 10,000 to 45,000 kilometres from Earth.

• In July 2024, RTX Corp., an aerospace, and defense company, that provides systems and services for commercial, military, and government customers, is planning on building ship and land-based smart munitions to acquire, track, and destroy incoming ballistic missiles. The standard Missile-3 Block IIA interceptor guidance system comprises a kill vehicle with a solid throttling divert and attitude control system, upgraded communication, and an improved two-color electro-optical guidance seeker.

End-user insights

The defense segment contributed the highest share of the electro optics market in 2023. The dominance of this segment is observed as electro-optics systems have the potential to better assist the defense manufacturers with independent surveillance and telemetric guidance which help to monitor threats, protect significant assets, and track enemy contacts. The electro-optic systems are in-build in a defense vehicle. So that these defense vehicles can see even in clouds, and fog and can operate by guidance or by an independent surveillance system.

• In September 2024, Hensoldt, a global high-tech pioneer for defence and security electronics launched its new Bushbaby 200 long-range lector-optics system for ground-based application. This is officially unveiled at the Africa Aerospace and Defence 2024 Exhibition. 

The aerospace segment is anticipated to grow with the highest CAGR in the electro optics market from 2024 to 2034. The growth of this segment is observed due to the integration of transformation the electro-optics has brought to the aerospace industry. These advancements have improved aircraft performance and offered new opportunities in space exploration, including navigation and flight control which aids with GPS, space telescope where instruments such as Hubble space telescope us used to capture extraordinary images of the universe, remote sensing technology, and laser. One of the greatest impacts electro-optics have made on aerospace applications is in satellite imagery.

• In November 2024, The U.S. Navy requested Boeing Co. to build seven P-8A Poseidon reconnaissance and surveillance aircraft for main U.S. allies under $1.7 billion. The aircraft has an MX-20HD digital electro-optical and infrared multi-spectral sensor of L3Harris.

Regional Insights

North America dominated the global electro optics market in 2023 due to the advanced defense system in the United States and leading manufacturers of electro-optics in Canada. The THAAD is an advanced missile defense system made by U.S. defense and aerospace manufacturers Lockheed Martin Corp. Another is the Patriot system which has 4 major operational functions- communication, commands and control, radar surveillance, and missile guidance.

Asia Pacific is anticipated to grow at the fastest CAGR in the electro optics market during the forecast period. The expansion of this region is experienced due to the investment and presence of key players in the region’s market. In Asia Pacific, China holds the dominant position and India is expected to emerge in the coming future. The companies of this region are focusing on investment in the defense sector and increasing the adoption of modern technology for safety purposes.

Electro Optics Market Companies

• Bae Systems PLC
• Lockheed Martin Corporation
• Excelitas Technologies Corporation
• Elbit Systems Ltd
• Thales Group
• General Dynamics Corporation
• Northrop Grumman Corporation
• RTX Corporation
• FLIR systems
• Hamamatsu Photonics
• L3Harris
• Thorlabs

Latest Announcement by Industry Leaders

In November 2024, Bezhalel (Butzi) Machlis, President and CEO of Elbit Systems said, “We are proud to support our European customer with advanced and versatile defense solutions that enhance operational effectiveness and adaptability. These contracts reflect the global trust in our innovative systems, such as the PULS and Hermes 900, which are designed to meet a broad range of mission requirements. Through our comprehensive portfolio, we remain committed to providing our customers with reliable, technologically advanced tools that address today’s complex defense challenges.”

Recent Developments

• In May 2024, Lightwave Logic, an optical communication technology company launched a collaboration with Advanced Micro Foundry (AMF) to develop polymer slot modulators utilizing the AMF silicon photonic platform. This partnership is focusing on developing electro-optics polymer slot modulators using AMF's standard manufacturing process flow on 200-mm wafers.
• In November 2024, Chess Dynamics, a surveillance, and fire control specialist providing bespoke solutions for Land and Maritime domains launched the next evolution of its Sea Eagle FCRO fire-control radar and electro-optical (EO) system. Combining an advanced radar with high-performance EO sensors in an integrated stabilized package, the new FCRO is intended as a compact and affordable system that can deliver precision fire control for any caliber of in-service naval guns, while having applicability to other weapon types.
• In September 2024, Lockheed Martin Corporation continues to support and upgrade a U.S. Navy electro-optical surveillance system designed for several classes of attack and guided-missile submarines.

Segments Covered in the Report

By Application

• Air Based
• Land Based
• Naval Based

By End-user

• Defense
• Aerospace
• Homeland Security

By Geography

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East and Africa