Target Acquisition Systems Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Platform (Land, Airborne, Naval), By Range (Short Range, Medium Range, Long Range), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 15.92 Billion
CAGR (2026-2031)	5.61%
Fastest Growing Segment	Airborne
Largest Market	North America
Market Size (2031)	USD 22.09 Billion

Market Overview

The Global Target Acquisition Systems Market will grow from USD 15.92 Billion in 2025 to USD 22.09 Billion by 2031 at a 5.61% CAGR. Target acquisition systems encompass distinct technologies such as radar, electro-optics, and sonar designed to detect, identify, and track hostile objects for precise weapon engagement. The expansion of this market is fundamentally driven by the accelerated modernization of global military forces and the requisite for precision-guided munitions in asymmetrical warfare environments. Furthermore, the increasing reliance on unmanned platforms necessitates advanced sensor payloads to ensure operational accuracy and enhanced situational awareness without compromising personnel safety.

However, the industry encounters significant hurdles regarding supply chain rigidities and the scarcity of critical electronic components which impede the timely delivery of complex units. According to the Aerospace, Security and Defence Industries Association of Europe, in 2024, defence sector turnover increased by 13.8 percent to 183.4 billion euros, a figure that underscores the intense capital injection into military equipment procurement. Despite this financial growth, manufacturers struggle with the high costs and logistical bottlenecks associated with integrating multi-spectral capabilities into compact frames.

Key Market Drivers

Rising Global Defense Budgets and Strategic Procurement Initiatives act as the primary catalyst for the industry's expansion. Governments are reacting to geopolitical instability by prioritizing situational awareness and precision engagement technologies. This funding creates a robust environment for acquiring advanced optical systems. 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 an all-time high of $2443 billion in 2023. This trend directly benefits manufacturers; according to Rheinmetall, November 2024, in the 'Financial report for Q3 2024', their Electronic Solutions division recorded a sales increase of 27% to €1,038 million in the first nine months of the year.

Accelerated Military Modernization and Soldier System Upgrades are reshaping the technological landscape of target acquisition. Forces are demanding integrated solutions that leverage artificial intelligence to improve target recognition. This shift necessitates heavy investment in fielding sophisticated soldier-borne sensors. According to DefenseScoop, March 2024, in the article 'Army seeks $255M to procure more than 3,000 IVAS augmented reality systems in fiscal 2025', the US Army requested $255 million to procure 3,162 units of the Integrated Visual Augmentation System 1.2. Such activities highlight the growing reliance on automated targeting ecosystems that enhance operational effectiveness in complex combat scenarios.

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Key Market Challenges

Supply chain rigidities and the scarcity of critical electronic components present a formidable obstacle to the expansion of the Global Target Acquisition Systems Market. These systems require specialized microelectronics to detect and track threats with high precision. When manufacturers cannot secure these essential components due to logistical inflexibilities, production schedules for radar and electro-optic units are disrupted. This volatility prevents defense contractors from meeting delivery deadlines, thereby stalling revenue recognition and limiting the industry’s ability to scale operations in response to increasing global demand.

The contraction of the vendor base further exacerbates this issue, leaving manufacturers with fewer options to source hardware. According to the National Defense Industrial Association, in 2024, private sector respondents within the defense industrial base reported losing 26 percent of their critical suppliers over the preceding three years. This reduction in available suppliers forces market players to navigate a more fragile procurement environment, leading to increased lead times and higher material costs. Consequently, the inability to reliably source components directly hampers the market’s growth by restricting the volume of completed systems that can be finalized and deployed.

Key Market Trends

The shift towards network-centric sensor-to-shooter architectures is restructuring the market by decoupling surveillance assets from engagement platforms. Defense forces are transitioning to integrated grids where data is instantaneously shared, enabling engagement of threats beyond the firing unit's line of sight. This imperative to link disparate nodes is driving contracts for advanced battle management systems that fuse real-time tracking data from diverse acquisition devices. According to Northrop Grumman, February 2025, the company secured two contracts with a combined value of $1.4 billion to modernize air and missile defense capabilities for the US Army and Poland through the Integrated Battle Command System (IBCS), which serves as the central hub for this networked lethality.

Concurrently, the development of passive sensing technologies is gaining traction as a critical response to anti-access/area denial environments. Unlike active radar that emits detectable signals, passive systems allow forces to track airborne and naval targets while maintaining electronic silence, thereby preserving their own stealth profile. This capability is becoming essential for survivability in contested airspaces where active emissions invite immediate counter-fire. Validating this demand, Saab announced in December 2025 that it received an order valued at approximately 130 million euros from a European NATO country for its Sirius passive sensor system, which provides multi-domain situational awareness without revealing the sensor's location.

Segmental Insights

The Airborne segment is recognized as the fastest-growing category in the Global Target Acquisition Systems Market. This accelerated expansion is primarily driven by the increasing deployment of Unmanned Aerial Vehicles (UAVs) and the continuous modernization of military aircraft fleets. Defense organizations worldwide are prioritizing aerial platforms to secure enhanced situational awareness and precision targeting capabilities over extensive operational areas. Additionally, the rising demand for network-centric warfare solutions necessitates the integration of advanced sensor suites on aerial assets, ensuring real-time intelligence gathering and effective threat neutralization in dynamic combat environments.

Regional Insights

North America maintains a leading position in the target acquisition systems market due to significant defense expenditure, particularly by the United States. The U.S. Department of Defense consistently invests in upgrading military assets, which drives the procurement of precise detection and tracking technologies. Additionally, the region hosts established defense manufacturers that specialize in developing and integrating these systems across land, air, and naval platforms. This sustained focus on strengthening national security through equipment modernization ensures North America remains the primary contributor to global market activity.

Recent Developments

• In December 2025, Saab received an order from BAE Systems Hägglunds to supply the Universal Tank and Anti-Aircraft System (UTAAS) for the Combat Vehicle 90 platform. Valued at approximately SEK 314 million, the contract focused on delivering this modular fire control and sighting system, which provides gunners with the ability to detect, identify, and engage targets with high precision. The UTAAS integrates a sight and fire control computer to ensure effective target acquisition in various dynamic combat scenarios. This order reinforced the company's role in equipping modern armored vehicles with sophisticated targeting electronics.
• In November 2024, Elbit Systems was awarded contracts totaling approximately $335 million to supply defense solutions to a European country. The agreement included the delivery of PULS rocket launchers and Hermes 900 Unmanned Aircraft Systems equipped with advanced payloads. The Hermes 900 is a multi-role platform designed for persistent intelligence, surveillance, target acquisition, and reconnaissance (ISTAR) missions. These systems are intended to enhance the customer's operational range and precision targeting capabilities. The delivery of these comprehensive target acquisition and fire support solutions was scheduled to be performed over a period of three and a half years.
• In August 2024, Leonardo DRS received a significant production order valued at $117 million for its advanced thermal weapon sights under a contract with the U.S. Army. The order specifically covered the continued production of the Family of Weapon Sights – Individual, a clip-on thermal unit that wirelessly connects to helmet-mounted vision systems. This technology enables soldiers to acquire targets rapidly during day or night and through degraded environmental conditions such as smoke or fog. The system enhances soldier lethality and survivability by allowing target engagement without the need to physically shoulder the weapon.
• In January 2024, L3Harris Technologies secured a substantial contract with a potential value of $919 million from the Space Development Agency to design and manufacture infrared space vehicles. This agreement focused on the production of 18 satellites for the Tranche 2 Tracking Layer program, which aims to provide near-global missile warning and tracking capabilities. The company's technology was selected to support the military's efforts in building a robust constellation for detecting and targeting advanced threats, including hypersonic weapons. This development underscored the growing importance of space-based assets in the global target acquisition architecture for defense applications.

Key Market Players

• ASELSAN Elektronik Sanayi ve Ticaret Anonim Şirketi
• BAE Systems plc
• Elbit Systems Ltd.
• Hensoldt AG
• Israel Aerospace Industries Ltd.
• Wuhan Joho Technology Co., Ltd
• Leonardo S.p.A.
• Lockheed Martin Corporation
• RTX Corporation
• Rheinmetall AG

By Platform	By Range	By Region
Land Airborne Naval	Short Range Medium Range Long Range	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Target Acquisition Systems Market, By Platform:

• Land
• Airborne
• Naval

• Target Acquisition Systems Market, By Range:

• Short Range
• Medium Range
• Long Range

• Target Acquisition 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