Digital Twin in Aerospace and Defense Market Report 2025

The digital twin in aerospace and defense market size has grown exponentially in recent years. It will grow from $2.02 billion in 2024 to $2.49 billion in 2025 at a compound annual growth rate (CAGR) of 23.2%. This past growth was fueled by a surge in demand for predictive maintenance, the increasing adoption of Industry 4.0 principles, heightened complexity in defense technologies, the need for economical testing methods, greater focus on lifecycle oversight, and ongoing efforts toward military modernization.

The digital twin in aerospace and defense market size is expected to see exponential growth in the next few years. It will grow to $5.68 billion in 2029 at a compound annual growth rate (CAGR) of 22.9%. Projected growth will be driven by the escalating need for predictive maintenance, deeper integration of Industry 4.0 technologies, heightened emphasis on lifecycle optimization, broader implementation of connected aircraft solutions, increasing attention to mission preparedness and defense strategy, and the growing demand for affordable design and testing approaches. Emerging trends include the use of AI-powered analytics, improved real-time predictive maintenance, advancements in IoT connectivity, digital twin use for supply chain enhancements, stronger cybersecurity for virtual models, and the rise of autonomous system testing and validation.

The rising defense expenditure is anticipated to drive the growth of the digital twin market in the aerospace and defense sector. Defense expenditure refers to the financial resources allocated by a country’s military for purchasing, replenishing, and maintaining its inventory of ammunition and other essential equipment. This increase is largely due to growing geopolitical tensions, expanded military activities, and the need to replenish depleted stockpiles. Higher defense spending supports the advancement of digital twin technologies by enabling consistent investment in cutting-edge simulation tools, real-time data integration, and lifecycle management systems. For example, in December 2023, the House of Commons Library reported that the UK secured defense orders worth $16.04 billion (£12 billion) in real terms in 2022, representing an increase of $6.15 billion (£4.6 billion) from 2021. This significant rise reflects expanded procurement and investment in advanced military capabilities. As a result, the increasing defense expenditure is contributing to the growth of digital twin applications in aerospace and defense.

Leading companies in the digital twin market for aerospace and defense are prioritizing the development of innovative initiatives, such as smart airport programs, to improve operational efficiency, enhance the passenger experience, optimize asset utilization, and support real-time decision-making through sophisticated simulation and analytics. A smart airport integrates modern digital technologies to streamline processes, increase efficiency, and deliver a seamless travel experience. For instance, in July 2022, Hamad International Airport in Qatar introduced a Digital Twin initiative utilizing AI, real-time data, and 3D modeling to enhance airport operations, minimize downtime, and support more effective decision-making. This platform offers an intuitive 3D interface providing a real-time, comprehensive view of airport activities, enabling operational teams to monitor ongoing functions and make faster, better-informed decisions.

In January 2025, Siemens AG, a German automation company, partnered with JetZero to design a fuel-efficient, zero-emission blended-wing aircraft utilizing Siemens’ suite of digital tools. This collaboration aims to develop a sustainable, high-performance aircraft by leveraging advanced digital twin technology to enhance design efficiency and minimize environmental impact. JetZero, a U.S.-based aerospace firm, offers digital twin solutions within the aerospace and defense sector.

Major players in the digital twin in aerospace and defense market are Microsoft Corporation, Siemens AG, Boeing Company, Lockheed Martin Corporation, Airbus SE, International Business Machines Corporation, Oracle Corporation, Northrop Grumman Corporation, Honeywell International Inc., SAP SE, General Electric, Tata Consultancy Services, BAE Systems, Thales Group, L3Harris Technologies, Rolls-Royce Holdings plc, Dassault Systèmes, Hexagon AB, ANSYS Inc., PTC Inc.

North America was the largest region in the digital twin in aerospace and defense market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in digital twin in aerospace and defense report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the digital twin in aerospace and defense market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The sharp hike in U.S. tariffs and the associated trade disputes in spring 2025 are notably impacting the aerospace and defense sector by raising costs for titanium, carbon fiber composites, and avionics materials largely sourced from global suppliers. Defense contractors, locked into fixed-price government contracts, absorb these added costs, while commercial aerospace firms face airline pushback on higher aircraft prices. Delays in component shipments due to customs bottlenecks further disrupt tight production schedules for jets and satellites. The industry is responding by stockpiling critical materials, seeking waivers for defense-related imports, and collaborating with allied nations to diversify supply chain.

A digital twin in the aerospace and defense sector refers to a real-time digital replica of an actual aircraft or military system. It leverages live data and simulations to monitor, evaluate, and enhance performance, maintenance, and operational efficiency throughout its entire lifecycle.

The core components of a digital twin in aerospace and defense include software, services, and hardware. Digital twin software consists of platforms and tools used to develop, visualize, and manage virtual models of aircraft and associated assets. These solutions can be implemented either through on-premises infrastructure or cloud-based platforms. Foundational technologies supporting these systems include artificial intelligence (AI), Internet of Things (IoT), big data analytics, machine learning, and cloud computing. Key applications span predictive maintenance, product design and development, simulation and testing, supply chain coordination, and asset management. This technology finds applications across civil aviation, military operations, space missions, and by defense contractors.

The digital twin in aerospace and defense market research report is one of a series of new reports that provides digital twin in aerospace and defense market statistics, including the digital twin in aerospace and defense industry global market size, regional shares, competitors with the digital twin in aerospace and defense market share, detailed digital twin in aerospace and defense market segments, market trends, and opportunities, and any further data you may need to thrive in the digital twin in aerospace and defense industry. This digital twin in aerospace and defense market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

The digital twin in aerospace and defense market consists of revenues earned by entities by providing services such as real-time performance monitoring, mission planning and training, fleet management, and design and simulation. The market value includes the value of related goods sold by the service provider or included within the service offering. The digital twin in aerospace and defense market includes sales of aircraft digital twin platforms, spacecraft and satellite digital replicas, and engine digital twin models. Values in this market are ‘factory gate’ values, that is, the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values and are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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