Aerospace Electronics Market Report 2025

The aerospace electronics market size has grown strongly in recent years. It will grow from $93.16 billion in 2024 to $101.05 billion in 2025 at a compound annual growth rate (CAGR) of 8.5%. The growth in the historic period can be attributed to increased global defense spending, rise in commercial air traffic, expanding satellite communication demands, rise in investments in space exploration programs, and escalating geopolitical tensions.

The aerospace electronics market size is expected to see strong growth in the next few years. It will grow to $138.71 billion in 2029 at a compound annual growth rate (CAGR) of 8.2%. This future growth will be driven by the rising need for advanced aircraft, a greater focus on environmentally sustainable aviation, increased global satellite deployment efforts, the expansion of commercial space tourism, and continued investment in intelligent airport technologies. Prominent trends anticipated during this period include further miniaturization of electronic parts, the adoption of autonomous flight management systems, advancements in energy management capabilities, greater implementation of open-systems architecture, and the use of photonic and quantum technologies.

The increasing allocation of resources to defense initiatives is playing a significant role in the expansion of the aerospace electronics market. These growing investments stem from heightened geopolitical tensions, as well as growing concerns over terrorism, cyber threats, and regional conflicts. Consequently, governments are prioritizing the enhancement of defense capabilities and deterrence strategies. Aerospace electronics contribute to the effectiveness of military operations by supporting advanced communication, surveillance, navigation, and electronic warfare, ultimately enabling more accurate targeting, improved data transmission, and mission success. For example, in May 2025, according to the House of Commons Library, a UK-based research and information service, the UK’s defense expenditure is projected to grow from $62.16 billion (£53.9 billion) in 2023-24 to $65.61 billion (£56.9 billion) in 2024-25 and $68.96 billion(£59.8 billion) in 2025-26, reflecting an average annual real-terms increase of 2.4% over the period.

Companies active in the aerospace electronics market are increasingly developing innovative products such as lightweight hermetic packages to reduce system weight and improve durability in extreme aerospace conditions. Hermetic packages, which are airtight enclosures, protect electronics from environmental challenges like dust, gas, moisture, and pressure. For instance, in September 2023, Germany-based SCHOTT AG introduced lightweight microelectronic packages tailored for aerospace applications. These aluminum-based packages weigh significantly less than traditional kovar enclosures - by as much as two-thirds - while still offering strong environmental protection. They are adaptable for use in microwave and RF applications, DC/DC converters, and hermetic sensors across aircraft and satellite systems, combining both resilience and efficiency.

In March 2025, Sanlayan Technologies, a defense electronics startup headquartered in India, acquired Dexcel Electronics Designs Pvt. Ltd. in a strategic move to enhance its technological capabilities. The acquisition aims to leverage Dexcel’s strengths in advanced electronic and embedded system development to accelerate Sanlayan’s growth in the aerospace electronics market. Dexcel Electronics Designs Pvt. Ltd., also based in India, specializes in the design and manufacturing of electronic systems for aerospace applications.

Major players in the aerospace electronics market are RTX Corporation, The Boeing Company, Lockheed Martin, Airbus SE, Panasonic Holdings Corporation, General Dynamics Corporation, Northrop Grumman Corporation, Honeywell International Inc., GE Aerospace, BAE Systems, Safran S.A., Eaton Corporation, Thales Group, L3Harris Technologies Inc., Parker Hannifin Corporation, Leonardo S.p.A., Ametek Inc., Elbit Systems, Teledyne Technologies Incorporated, TransDigm Group Incorporated.

North America was the largest region in the aerospace electronics market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in aerospace electronics report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the aerospace electronics 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.

Aerospace electronics is a specialized branch of electronic systems, components, and subsystems developed to carry out essential operations in aircraft, satellites, spacecraft, and other aerospace platforms. These systems are built to uphold strict standards of reliability, efficiency, and resistance to harsh environmental conditions during extreme operations. They are vital to mission success, facilitating navigation, communication, monitoring, control, and data processing across both the civil and defense aerospace segments.

The key product categories in aerospace electronics include flight control systems, communication systems, navigation systems, avionics, and power management systems. Communication systems comprise integrated technologies that allow for secure and dependable transmission of voice, data, and control signals among aircraft, satellites, and ground control stations, ensuring effective coordination and safety. These systems incorporate components such as microcontrollers, sensors, antennas, computing systems, and display units, which are utilized in commercial aviation, space exploration, military aviation, and unmanned aerial vehicles (UAVs), with end users being original equipment manufacturers (OEMs) and the aftermarket.

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

The aerospace electronics market consists of sales of integrated modular avionics (IMA), actuation systems, cockpit voice recorders (CVR), mission computers, aircraft health monitoring systems (AHMS), power supply units, electrical wiring interconnect systems (EWIS), navigation displays, and engine control electronics. 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 that 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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