Military Electro-optics/Infrared (EO/IR) Systems Market Size - By Cooling Technology, By Sensor Technology, By Imaging Technology, By Product Type, By Platform, By Application, By Point of Sale and Forecast, 2025 - 2034

Military Electro-optics/Infrared (EO/IR) Systems Market Size

The global military electro-optics/infrared (EO/IR) systems market was valued at USD 8.4 billion in 2024 and is estimated to grow at a CAGR of 3.8% from 2025 to 2034.
 

The rising focus on Intelligence, Surveillance, and Reconnaissance (ISR) stems from the imperative for heightened situational awareness and proactive threat management. ISR systems, notably EO/IR technologies, empower armed forces to oversee expansive territories, identify looming threats, and collect vital intelligence all while safeguarding personnel. As part of the manned airborne ISR (MAISR) project, L3Harris has handed over three modified King Air 350ER ISR aircraft to the Canadian Armed Forces.
 

Upgraded at L3Harris’ Texas facility, these aircraft are set to bolster Canada's intelligence, surveillance, and reconnaissance capabilities, thereby enhancing security and mission effectiveness for the Department of National Defense. This initiative falls under a Foreign Military Sale, overseen by the U.S. Army’s Fixed Wing Project Office. These bolstered ISR capabilities not only enhance strategic planning and mission execution but also provide real-time updates, crucial for sustaining operational efficacy and securing an edge in combat.
 

In contemporary military operations, sophisticated situational awareness is paramount. It facilitates swift decision-making, mitigates risks, and boosts mission success rates. As battlefield complexities escalate, the integration of EO/IR systems offering real-time imaging and data analytics becomes crucial for timely threat assessment and response. These advanced systems enable military assets to detect, track, and pinpoint targets with remarkable accuracy, even under challenging conditions like nighttime or inclement weather in maritime for special operations.
 

For instance, Teledyne FLIR Defense's SeaFLIR 240-EP maritime surveillance system bolsters military situational awareness through its high-definition imaging and advanced ISR capabilities. Designed to be lightweight with inertial navigation, it's perfectly suited for naval combatants, small boats, and unmanned vessels. This versatility supports a range of missions, including surveillance, search and rescue, and special operations. Selected for tactical boats by the U.S. Marines, the system enhances operational effectiveness and situational awareness in maritime settings, ensuring swift responses and heightened security in the Pacific region.
 

Military Electro-optics/Infrared (EO/IR) Systems Market Trends

The military electro-optics/infrared (EO/IR) systems industry is integrating automation and artificial intelligence to enhance system capabilities. The incorporation of advanced data processing and machine learning into EO/IR platforms enables faster decision-making and automated threat recognition, improving operational efficiency. The market shows increasing demand for compact and lightweight systems, especially in unmanned platforms, to support agile military operations. Leonardo Electronics US is advancing AI integration in ISR to enhance threat detection and emitter analysis. AI supports Radar Warning Receivers and ELINT systems in identifying known threats, but challenges remain with new, agile RF signals and cybersecurity issues. The use of 5G technology adds complexity due to frequency diversity and beamforming, making threat detection and protection more difficult.
 

The Israel Ministry of Defense has signed a NIS 2 billion agreement with Rafael Advanced Defense Systems and Elbit Systems to expand production of the IRON BEAM, Israel's first domestically developed laser weapon system. The ground-based laser defense system intercepts aerial threats, including rockets, mortars, unmanned aerial vehicles (UAVs), and cruise missiles. Following successful trials demonstrating its interception capabilities, the IRON BEAM will integrate with Israel's existing multi-layered defense infrastructure, including the Iron Dome. This integration aims to strengthen national defense capabilities while reducing operational costs. The system's precision targeting and rapid response features enhance intelligence, surveillance, and reconnaissance (ISR) operations, improving battlefield awareness and defense readiness.
 

Military Electro-optics/Infrared (EO/IR) Systems Market Analysis

The market faces constraints due to the high costs of advanced technologies and complex integration requirements, which particularly affect nations with smaller defense budgets. The market presents opportunities through increased demand for artificial intelligence-enabled Intelligence, Surveillance, and Reconnaissance (ISR) capabilities and the expansion of unmanned and autonomous platforms. Export control regulations and cybersecurity requirements ensure secure deployment but can delay market entry for manufacturers. The market's growth depends on technological innovation and collaboration between defense companies and government agencies.
 

Based on imaging technology, the military electro-optics/infrared (EO/IR) systems market is segmented into electro-optical (EO) systems, infrared (IR) systems, hyper-spectral and multi-spectral systems. In 2024, the electro-optical (EO) systems segment accounted for the largest market share with 42.4% share.
 

Electro-optical (EO) systems are essential components in military operations, providing high-resolution imaging and surveillance capabilities. These systems incorporate visible light and near-infrared sensors to capture detailed images and videos, enabling reconnaissance, target acquisition, and situational awareness. EO systems support both day and low-light operations, allowing forces to monitor environments with precision.
 

The development of EO technology prioritizes improvements in image clarity, range, and processing speed. The integration with artificial intelligence enables real-time analysis and enhanced decision-making capabilities. As autonomous platforms and unmanned systems expand, EO systems continue to evolve, offering increased versatility and adaptability for modern military applications.
 

Based on platform, the military electro-optics/infrared (EO/IR) systems market is divided into land, airborne, naval. In 2024, the land segment is the fastest-growing segment with a CAGR of 4.3% during the forecast period.
 

Military Electro-optics/Infrared (EO/IR) systems on land platforms enhance ground surveillance, reconnaissance, and combat effectiveness. These systems, installed on tanks, armored vehicles, and mobile units, provide real-time imaging, target acquisition, and situational awareness. EO/IR technology enables operators to detect and identify threats at extended ranges and in diverse conditions, supporting battlefield advantage and troop safety.
 

The evolution of EO/IR systems for land platforms includes reduced weight, improved durability, and integration with data processing tools. Current systems incorporate AI-driven analysis and multi-spectral imaging, enabling accurate target identification and faster decision-making. These technological improvements enhance the efficiency and responsiveness of land-based operations in complex combat environments.
 

North America is expected to reach over USD 4.1 billion by 2034. The North American military electro-optics/infrared (EO/IR) systems market is experiencing growth due to the demand for advanced surveillance and defense technologies. The United States leads this growth through significant investments in military modernization programs. The market focuses on artificial intelligence integration, situational awareness enhancement, and development of multi-platform systems for joint operations. The region prioritizes cybersecurity measures and platform upgrades to maintain operational readiness against emerging threats.
 

China is developing military EO/IR systems to enhance its defense capabilities. The country is investing in imaging and sensor technologies for unmanned systems and combat vehicles. The integration of AI and machine learning improves real-time data analysis and target recognition capabilities. China's research and development focuses on expanding operational reach and modernizing defense infrastructure.
 

Germany is upgrading its military EO/IR systems as part of its armed forces modernization program. The country is implementing advanced imaging technologies in ground vehicles, aircraft, and naval vessels to improve surveillance, reconnaissance, and targeting capabilities. Germany collaborates with European allies and implements AI-driven analytics for mission planning. These systems support multi-domain operations and address current security requirements.
 

Japan is strengthening its defense capabilities through the implementation of EO/IR systems in military assets. The country focuses on imaging and sensor technologies for surveillance and threat detection, particularly in maritime and aerial defense. Japan's investments include radar, laser systems, and unmanned platforms, with AI integration for improved decision-making and data processing. These developments aim to enhance response capabilities to regional security threats.
 

South Korea is implementing military EO/IR systems to strengthen its defense strategies and operational capabilities. The country is integrating high-resolution sensors and real-time data processing across ground, air, and naval platforms. AI and machine learning applications support threat identification and tracking functions. South Korea's investments prioritize surveillance and reconnaissance capabilities, focusing on border security and maritime operations to address regional security needs.
 

Military Electro-optics/Infrared (EO/IR) Systems Market Share

Lockheed Martin Corporation, Northrop Grumman, and BAE Systems plc are prominent in the market, each contributing advanced technologies to enhance defense capabilities. Lockheed Martin develops integrated EO/IR solutions for various platforms, focusing on situational awareness and precise targeting. Northrop Grumman provides high-performance sensor systems that support surveillance, reconnaissance, and multi-domain operations. BAE Systems offers advanced imaging and sensor technologies that improve operational effectiveness and mission success. These companies prioritize innovation, incorporating AI, machine learning, and cutting-edge data processing to address evolving security challenges and bolster military readiness across air, land, and naval platforms.
 

Military Electro-optics/Infrared (EO/IR) Systems Market Companies

Major players operating in the Military Electro-optics/Infrared (EO/IR) Systems industry are:

• Aselsan A.S.
• BAE Systems plc
• CONTROP Precision Technologies Ltd.
• Elbit Systems Ltd.
• Excelitas Technologies Corp.
• Hensoldt AG
• Indra Sistemas, S.A.
• Israel Aerospace Industries
• L3Harris Technologies, Inc.
• Leonardo S.p.A.
• Lockheed Martin Corporation
• Northrop Grumman
• Rafael Advanced Defense Systems Ltd.
• Rheinmetall AG
• Safran SA
• Teledyne FLIR LLC
• Textron Systems
• Thales Group
• Ultra Electronics Holdings plc
   

Military Electro-optics/Infrared (EO/IR) Systems Industry News

• In October 2024, RAFAEL will showcase its advanced ISR and sense-to-strike capabilities at AUSA 2024 in Washington, D.C. Key highlights include the SPECTRUM DOME SIGINT solution, which detects, classifies, and geolocates RF transmissions in congested areas. The MICROLITE EO/IR AI-enabled payload provides wide-area persistent surveillance for unmanned systems. Integrated with RAFAEL’s SPIKE Family and ICE BREAKER strike systems, it ensures seamless sensor-to-shooter operations, delivering real-time intelligence and precise engagement.
   
• In February 2024, Elbit Systems secured a USD 300 million contract to provide weapon systems, reconnaissance equipment, driving systems, and situational awareness solutions for approximately 230 armored vehicles for a European customer. The six-year agreement encompasses custom design, production, lifecycle maintenance, and comprehensive in-country support services.
   

This military electro-optics/infrared (EO/IR) systems market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD million) from 2021 to 2034, for the following segments:

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Market, By Cooling Technology

• Cooled
• Uncooled

Market, By Sensor Technology

• Staring sensor
• Scanning sensor

Market, By Imaging Technology

• Electro-optical (EO) systems
• Infrared (IR) systems
• Hyper-spectral and multi-spectral systems

Market, By Product Type

• Handheld system
• EO/IR payload

Market, By Platform

• Land
  • Vehicle-mounted
  • Combat vehicles
  • Unmanned Ground Vehicles (UGVs)
  • Soldier system
• Airborne
  • Attack helicopters
  • Military aircrafts
  • Fighter aircraft
  • Transport aircraft
  • Special mission aircraft
  • Unmanned Aerial Vehicles (UAVs)
• Naval
  • Combat Ships
  • Unmanned Surface Vehicles (USVs)

Market, By Application

• Intelligence, Surveillance, and Reconnaissance (ISR)
• Targeting
• Situational awareness
• Navigation
• Others

Market, By Point of Sale

• OEM
• Aftermarket

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa