Electro-optical systems to show steady growth

The electro-optical system market is anticipated to grow at a CAGR of 4.5% for the next decade, reaching $18.8 billion by 2033.

By Future Market Insights December 12, 2023
Courtesy: FLIR, CFE Media's New Products for Engineers Database

Optical system insights

  • Electro-optical systems, driven by defense needs, are poised to reach $18.8 billion by 2033, expanding 4.5% annually, fostering enhanced safety and surveillance capabilities worldwide.
  • North America dominates the market due to robust defense sectors, while Asia-Pacific’s growing defense budgets drive significant future growth potential.

Recent industry forecasts indicate the worldwide electro-optical system market is expected to grow significantly, marking a significant step towards enhanced safety, security, and defense systems. With a projected value of $12.06 billion in 2023, the market is anticipated to grow at a sizable compound annual growth rate (CAGR) of 4.5% over the course of the forecast period, reaching $18.8 billion by 2033.

The market for electro-optical systems has grown steadily in recent years, with a compound annual growth rate (CAGR) of 2.4% from 2018 to 2022. Nonetheless, the growth rate predicted to accelerate from 2023 to 2033 highlights the growing need for improved security and safety solutions, especially for defense-related applications.

Market principles

The primary functions of electro-optical systems, such as multispectral day and night imaging sensors, night-vision goggles (NVG), laser rangefinders (LRF), forward-looking infrared (FLIR) systems, and infrared targeting pods, are intelligence, surveillance, target acquisition, and reconnaissance (ISTAR) capabilities. The market for electro-optical systems in military and defense applications is growing as a result of these capabilities.

The electro-optical system, which combines greater cost, interoperability, and mission-critical features appropriate for military departments, allows for the flexible deployment of targeted military force based on precise and timely surveillance and reconnaissance. Furthermore, the naval forces around the globe employ electro-optical equipment in novel and varied forms, such IR search and track systems and EO fire control directors.

It is anticipated that ongoing research over the coming years will provide next-generation sensors for communications devices, body armour, and weaponry. The two main electro-optical system deployment sectors that are anticipated to grow in the near future are airborne EO systems and land- and sea-based EO systems.

Regional analysis

In terms of geographical trends, the development of surveillance technologies and a strong defense industry have allowed North America to now control a sizable portion of the worldwide electro-optical system market. Europe is not far behind, with large contributions from well-known companies in the aerospace and defense industries.

The Asia-Pacific region is expected to exhibit significant development potential due to the demand for improved border security and the rising defense budgets of emerging nations. The demand for electro-optical systems is expected to increase throughout the forecast period due to the region’s quickening technical breakthroughs and growing industrial base.

Category-wise insights on the optical market

The market for electro-optical systems includes a broad range of goods, such as laser rangefinders, thermal cameras, and night vision systems. Of these, thermal imaging systems are anticipated to experience significant development because of their numerous uses in a range of industries, from defense operations to industrial maintenance.

These insights are based on a report on the Electro-Optical System Market by Future Market Insights, a CFE Media and Technology content partner.

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