Target Acquisition Systems Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Target Acquisition Systems Market is projected to expand from USD 15.92 Billion in 2025 to USD 22.09 Billion by 2031, registering a CAGR of 5.61%. These systems utilize technologies including radar, electro-optics, and sonar to detect, identify, and track hostile entities for accurate weapon engagement. Market growth is primarily fueled by the rapid modernization of military forces worldwide and the growing need for precision-guided munitions in asymmetrical warfare. Additionally, the increasing dependence on unmanned platforms requires advanced sensor payloads to maintain operational accuracy and situational awareness while ensuring personnel safety.

Despite these opportunities, the industry faces substantial challenges due to supply chain rigidities and a shortage of essential electronic components, which delay the delivery of complex units. Data from the Aerospace, Security and Defence Industries Association of Europe indicates that defense sector turnover rose by 13.8 percent to 183.4 billion euros in 2024, highlighting the massive capital investment in military equipment. However, even with this financial influx, manufacturers continue to grapple with high costs and logistical obstacles related to integrating multi-spectral capabilities into compact frameworks.

Market Drivers

Increasing global defense budgets and strategic procurement initiatives serve as the main engines for industry growth, as governments respond to geopolitical instability by prioritizing situational awareness and precision engagement capabilities. This influx of funding fosters a favorable environment for the acquisition of advanced optical systems, evidenced by the Stockholm International Peace Research Institute’s report that total global military expenditure hit a record high of $2.44 trillion in 2023. This upward trend directly benefits manufacturers, such as Rheinmetall, which reported a 27% sales increase to €1.03 billion in its Electronic Solutions division during the first nine months of 2024.

Furthermore, accelerated military modernization and upgrades to soldier systems are redefining the technological requirements for target acquisition, creating a demand for integrated solutions that utilize artificial intelligence for better target recognition. This transition requires significant investment in sophisticated soldier-borne sensors to support automated targeting ecosystems. For instance, the US Army requested $255 million in fiscal 2025 to acquire 3,162 units of the Integrated Visual Augmentation System 1.2, as reported by DefenseScoop in March 2024, underscoring the shift toward technologies that boost operational effectiveness in complex combat environments.

Market Challenges

Supply chain constraints and the shortage of critical electronic components pose significant barriers to the growth of the Global Target Acquisition Systems Market. Because these systems rely on specialized microelectronics for high-precision threat detection and tracking, the inability to secure essential parts due to logistical inflexibility disrupts production schedules for radar and electro-optic units. This instability prevents defense contractors from adhering to delivery timelines, which subsequently stalls revenue recognition and restricts the industry's capacity to scale operations to meet rising global demand.

The problem is compounded by a contracting vendor base, which leaves manufacturers with fewer hardware sourcing options. According to the National Defense Industrial Association, private sector respondents in the defense industrial base reported a 26 percent loss of critical suppliers over the three years leading up to 2024. This reduction forces market players to operate within a fragile procurement environment characterized by extended lead times and elevated material costs, ultimately hampering market growth by limiting the volume of systems that can be finalized and deployed.

Market Trends

The industry is currently being reshaped by a shift toward network-centric sensor-to-shooter architectures, which decouple surveillance assets from engagement platforms. Defense forces are moving toward integrated grids that allow for instantaneous data sharing, enabling the engagement of threats situated beyond the line of sight of the firing unit. This requirement to connect disparate nodes is driving demand for advanced battle management systems, as demonstrated by Northrop Grumman securing two contracts worth $1.4 billion in February 2025 to modernize air and missile defense for the US Army and Poland via the Integrated Battle Command System.

Simultaneously, the development of passive sensing technologies is accelerating as a vital countermeasure to anti-access/area denial environments. Unlike active radar that emits detectable signals, passive systems enable forces to track airborne and naval targets while maintaining electronic silence, a capability essential for survivability in contested airspaces. This trend was validated in December 2025 when Saab announced receiving an order valued at approximately 130 million euros from a European NATO country for its Sirius passive sensor system, designed to provide multi-domain situational awareness without revealing the sensor's position.

Key Players Profiled in the Target Acquisition Systems Market

• ASELSAN Elektronik Sanayi ve Ticaret Anonim Sirketi
• 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

Report Scope

In this report, the Global Target Acquisition Systems Market has been segmented into the following categories:

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

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Target Acquisition 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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