Close-in Weapon Systems Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Type (Gun-Based, Missile-Based), By Platform (Terrestrial, Naval), By Region & Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 8.12 Billion
CAGR (2026-2031)	8.21%
Fastest Growing Segment	Naval
Largest Market	North America
Market Size (2031)	USD 13.04 Billion

Market Overview

The Global Close-in Weapon Systems Market will grow from USD 8.12 Billion in 2025 to USD 13.04 Billion by 2031 at a 8.21% CAGR. A Close-in Weapon System constitutes a terminal defense naval capability designed to detect and neutralize short-range incoming threats such as antiship missiles and aircraft that have penetrated outer defensive layers. The primary drivers for this market include the strategic modernization of global naval fleets and the heightened proliferation of asymmetric threats including unmanned aerial systems. Nations are increasingly prioritizing these mechanisms to counter the growing risk of saturation attacks in contested maritime environments.

However, supply chain constraints pose a significant challenge to market scalability as they frequently delay the manufacturing and integration of these complex defense units. This production pressure is evident in wider industry metrics which highlight the strain of meeting rising orders. According to the Aerospace, Security and Defence Industries Association of Europe, in 2024, the turnover of the European defence sector increased by 13.8% to €183.4 billion. This robust financial growth underscores the intense procurement demand currently stressing the industrial base required to deliver such defensive technologies.

Key Market Drivers

Escalating geopolitical tensions and maritime territorial disputes are fundamentally reshaping the demand for Close-in Weapon Systems as nations move to fortify their naval assets against high-intensity threats. This volatility has necessitated a surge in defense appropriations, specifically directing funds toward fleet modernization and the procurement of terminal defense layers capable of intercepting advanced missiles in contested waters. The scale of this financial commitment is evident in global expenditure trends which directly fund these procurement programs. According to the Stockholm International Peace Research Institute, April 2024, in the 'Trends in World Military Expenditure, 2023' fact sheet, total global military expenditure reached $2443 billion in 2023, marking an increase of 6.8 percent in real terms. Such elevated capital allocation allows navies to integrate updated kinetic and directed-energy CIWS solutions to ensure survivability.

The rapid proliferation of unmanned aerial systems and the emergence of drone swarm tactics have further accelerated the requirement for highly responsive, automated defense architectures. Conventional missile defenses often face cost-exchange ratios that favor the attacker, prompting a shift toward rapid-fire gun systems and programmable ammunition designed specifically for saturation attacks. This operational reality is driving substantial contracts for versatile systems that bridge the gap between naval and land-based air defense. Highlighting this trend, according to Rheinmetall AG, February 2024, in the 'Bundeswehr orders air defence system Skyranger 30' press release, the company secured a contract worth €595 million to deliver a mobile system capable of engaging close-range aerial threats. Furthermore, broader naval procurement strategies reflect this prioritization of force protection capabilities. According to the U.S. Department of Defense, in 2024, the President’s Fiscal Year 2025 budget request for the Department of the Navy included $257.6 billion to sustain readiness and modernization efforts.

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Key Market Challenges

Supply chain constraints represent a formidable barrier to the scalability of the Global Close-in Weapon Systems Market. These terminal defense units require the precise integration of advanced radar components, sensors, and rapid-fire ballistics, making them highly sensitive to disruptions in the availability of raw materials and sub-systems. When manufacturers cannot secure essential electronic chips or specialized alloys on schedule, the entire production timeline for these complex defense units extends significantly. This logistical friction prevents industry players from efficiently converting the current surge in procurement orders into delivered capabilities, thereby stalling naval modernization efforts despite available funding.

The structural dependency of the sector on a vast, external network amplifies this vulnerability. According to the Aerospace Industries Association, in 2024, nearly 60 percent of the total workforce in the aerospace and defense industry was directly linked to the supply chain. This statistic highlights that the industrial base is heavily reliant on tier-two and tier-three suppliers, where labor shortages or capacity issues can paralyze the final assembly of systems. Consequently, this deep-rooted reliance creates a bottleneck that directly hampers the market’s ability to ramp up production rates to meet the growing threat of saturation attacks.

Key Market Trends

The Integration of Directed Energy Weapon Systems for Low-Cost Engagement is emerging as a critical solution to the financial asymmetry of modern naval warfare. As navies face cheap, expendable drone swarms, the economic burden of intercepting them with multimillion-dollar kinetic interceptors has become unsustainable, prompting a pivot toward high-energy lasers that offer a deep magazine and minimal cost per shot. This operational capability is moving rapidly from theoretical research to active testing, with systems designed to provide precise, speed-of-light engagement against aerial threats. According to the UK Ministry of Defence, January 2024, in the 'DragonFire laser system' press release, successful firing trials of the DragonFire weapon demonstrated a high-power engagement capability with an operating cost of typically less than £10 per shot, underscoring the potential for directed energy to revolutionize terminal defense economics.

The Incorporation of AI-Driven Fire Control and Autonomous Targeting is simultaneously transforming how defensive networks prioritize and neutralize saturation attacks. To cope with hyper-sonic and swarm threats that exceed human reaction speeds, market players are embedding artificial intelligence into combat management systems to automate threat detection, sensor fusion, and maintenance schedules, thereby maximizing system availability and lethality. This strategic shift toward intelligent, self-healing naval architectures is attracting substantial investment from major defense contractors. According to The Guardian, February 2024, in the 'Navy to get nearly £2bn of AI and virtual tech to keep warships at sea' article, Thales secured a £1.85 billion contract to implement artificial intelligence and data analysis services that enhance the Royal Navy’s ability to detect and target threats while ensuring the operational readiness of critical fleet assets.

Segmental Insights

The Naval segment is projected to register the fastest growth within the Global Close-in Weapon Systems Market. This expansion is primarily driven by the escalating frequency of maritime territorial disputes and the subsequent modernization of naval fleets worldwide. Defense ministries are actively prioritizing the procurement of automated defense units to counter evolving threats such as anti-ship missiles and unmanned aerial vehicles. Consequently, naval forces are accelerating the integration of these systems onto surface combatants to ensure vessel survivability. This strategic focus on strengthening last-line defense capabilities effectively sustains the rapid development of the naval sector.

Regional Insights

North America maintains a dominant position in the global close-in weapon systems market, largely due to substantial defense budget allocations within the United States. The region benefits from the active modernization strategies of the US Navy, which prioritizes the upgrade of fleet defense capabilities against aerial and surface threats. Furthermore, the concentration of key defense manufacturers facilitates continuous product development and procurement. Strong government support for research initiatives and the integration of automated defense technologies into naval vessels further solidify North America’s leadership in this sector.

Recent Developments

• In September 2025, the United States Navy awarded a $205 million contract to Raytheon, an RTX business, for the continued production and upgrade of the Phalanx Close-In Weapon System. This agreement funded conversions, overhauls, and the supply of related hardware to extend the operational life of the radar-guided rapid-fire gun system. The Phalanx remains a critical component of shipboard self-defense, designed to defeat anti-ship missiles and other close-range littoral threats. The work was scheduled to be carried out at the company’s facility in Louisville, Kentucky, and other sites, ensuring the fleet remains protected through 2029.
• In November 2024, Naval Group unveiled its new Multi-Purpose and Modular Launching System (MPLS) at the Euronaval exhibition in Paris. This innovative Close-In Weapon System distinguishes itself from traditional designs by featuring interchangeable ammunition modules capable of firing various vectors, such as 70mm rockets and Mistral missiles. The system comprises a two-axis trainable turret with a payload capacity of roughly 1,000 kilograms, allowing for a mix of weapons to address diverse threats. The company announced strategic partnerships with other defense firms to integrate a wide range of munitions, positioning the MPLS as a versatile solution for defending surface vessels against asymmetric and saturation attacks.
• In June 2024, Aselsan confirmed the first export of its Gökdeniz Close-In Weapon System to the Philippines during the launch of the BRP Miguel Malvar corvette. The vessel, built in South Korea, was revealed to be equipped with the Turkish company's advanced dual-barrel 35mm system, which utilizes atomized airburst ammunition to intercept anti-ship missiles and asymmetric threats. This integration highlighted the company’s growing influence in the Southeast Asian naval market. The system features an automatic linkless ammunition feed mechanism and is integrated with high-performance radar and electro-optic sensors to provide autonomous detection and engagement of close-in targets.
• In February 2024, Rheinmetall secured a significant contract to supply the German Armed Forces with the Skyranger 30 mobile air defense system. The deal, valued at approximately €595 million, involved the delivery of a prototype and 18 series production vehicles mounted on Boxer armored platforms, with an option for 30 additional units. This system was selected to address the capability gap in short-range air defense, combining a 30mm revolver cannon with surface-to-air missiles. The Skyranger 30 is designed to effectively counter modern aerial threats, including drones and loitering munitions, thereby strengthening the close-in defense capabilities of mobile ground units.

Key Market Players

• ASELSAN A.S.
• BAE Systems plc
• General Dynamics Corporation
• Leonardo S.p.A.
• Rafael Advanced Defense Systems Ltd.
• RTX Corporation
• Rheinmetall AG
• Thales S.A.
• MBDA Inc.
• Lockheed Martin Corporation

By Type	By Platform	By Region
Gun-Based Missile-Based	Terrestrial Naval	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Close-in Weapon Systems Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Close-in Weapon Systems Market, By Type:

• Gun-Based
• Missile-Based

• Close-in Weapon Systems Market, By Platform:

• Terrestrial
• Naval

• Close-in Weapon Systems Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE