Close-in Weapon Systems Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Close-in Weapon Systems Market is projected to expand from a valuation of USD 8.12 Billion in 2025 to USD 13.04 Billion by 2031, registering a compound annual growth rate of 8.21%. A Close-in Weapon System serves as a critical terminal defense mechanism for naval vessels, engineered to identify and destroy short-range dangers, including anti-ship missiles and aircraft that have bypassed outer defensive perimeters. The market is primarily propelled by the strategic overhaul of international naval fleets and the increasing prevalence of asymmetric threats, such as unmanned aerial systems, compelling nations to prioritize these mechanisms to mitigate the risk of saturation attacks in contested maritime environments.

However, the scalability of this market faces substantial hurdles due to supply chain limitations, which often delay the manufacturing and integration of these complex defense units. This strain on production is reflected in broader industry data that emphasizes the difficulty in fulfilling escalating orders. As reported by the Aerospace, Security and Defence Industries Association of Europe, the European defense sector's turnover rose by 13.8% to €183.4 billion in 2024. This robust financial performance highlights the immense procurement pressure currently burdening the industrial base responsible for delivering these essential defensive technologies.

Market Drivers

Rising geopolitical instability and disputes over maritime territories are fundamentally altering the demand landscape for Close-in Weapon Systems, as countries seek to bolster their naval assets against high-intensity threats. This volatile environment has triggered a substantial increase in defense budgets, specifically allocating resources for fleet modernization and the acquisition of terminal defense layers designed to intercept advanced missiles in contested waters. The magnitude of this financial dedication is illustrated by global spending patterns; according to the Stockholm International Peace Research Institute's April 2024 fact sheet, total world military expenditure hit $2.44 trillion in 2023, a real-term increase of 6.8 percent. Such elevated funding enables navies to adopt updated kinetic and directed-energy CIWS solutions to guarantee vessel survivability.

Additionally, the rapid spread of unmanned aerial systems and the development of drone swarm tactics have intensified the need for highly responsive, automated defense architectures. Because conventional missile defenses often suffer from unfavorable cost-exchange ratios, there is a distinct shift toward rapid-fire gun systems and programmable ammunition capable of countering saturation attacks.

This operational necessity is fueling significant contracts for systems that bridge the gap between naval and land-based air defense, as evidenced by Rheinmetall AG’s February 2024 announcement of a €595 million contract for the Skyranger 30 mobile air defense system. Furthermore, broader naval strategies mirror this focus on force protection, with the U.S. Department of Defense's 2024 Fiscal Year 2025 budget request seeking $257.6 billion for the Department of the Navy to support readiness and modernization.

Market Challenges

Supply chain constraints constitute a major obstacle to the scalability of the Global Close-in Weapon Systems Market. These terminal defense units demand the precise integration of advanced radar components, sensors, and rapid-fire ballistics, rendering them highly susceptible to interruptions in the availability of raw materials and sub-systems. When manufacturers are unable to secure essential electronic chips or specialized alloys on schedule, the production timelines for these intricate defense units are prolonged considerably. This logistical friction hinders the industry's ability to efficiently translate the current influx of procurement orders into delivered capabilities, thereby stalling naval modernization initiatives despite the availability of funding.

The sector's vulnerability is exacerbated by its structural reliance on an extensive external network. As reported by the Aerospace Industries Association in 2024, approximately 60 percent of the aerospace and defense industry's total workforce was directly tied to the supply chain. This statistic underscores the industrial base's heavy dependence on tier-two and tier-three suppliers, where issues such as labor shortages or capacity constraints can paralyze final system assembly. Consequently, this deep-seated dependency forms a bottleneck that directly restricts the market's capacity to accelerate production rates in response to the increasing threat of saturation attacks.

Market Trends

The adoption of Directed Energy Weapon Systems for Low-Cost Engagement is emerging as a pivotal solution to the financial imbalances inherent in modern naval warfare. Confronted with inexpensive, expendable drone swarms, navies are finding the economic burden of intercepting them with multi-million dollar kinetic interceptors unsustainable, prompting a pivot toward high-energy lasers that offer a deep magazine and minimal cost per shot. This capability is swiftly transitioning from theoretical research to operational testing, offering precise, speed-of-light engagement against aerial targets. For instance, the UK Ministry of Defence announced in January 2024 that the DragonFire laser system successfully completed firing trials, demonstrating high-power capabilities with an operating cost typically under £10 per shot, highlighting directed energy's potential to revolutionize terminal defense economics.

Concurrently, the integration of AI-Driven Fire Control and Autonomous Targeting is transforming how defensive networks prioritize and neutralize saturation attacks. To address hypersonic and swarm threats that surpass human reaction times, industry players are embedding artificial intelligence into combat management systems to automate threat detection, sensor fusion, and maintenance protocols, thereby optimizing system lethality and availability. This strategic shift toward intelligent, self-repairing naval architectures is attracting significant investment; as reported by The Guardian in February 2024, Thales secured a £1.85 billion contract to deploy artificial intelligence and data analysis services that improve the Royal Navy’s threat detection and targeting capabilities while ensuring the operational readiness of critical fleet assets.

Key Players Profiled in the Close-in Weapon Systems Market

• 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

Report Scope

In this report, the Global Close-in Weapon Systems Market has been segmented into the following categories:

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
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Close-in Weapon Systems Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

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