Smart Weapons Industry Size and Growth, Share and Forecast, 2024–2032

According to Fortune Business Insights™, the global smart weapons industry was valued at USD 18.99 billion in 2023 and is projected to expand from USD 20.20 billion in 2024 to USD 45.24 billion by 2032, registering a CAGR of 10.61% during the forecast period. Growth is driven by rising global defense budgets, increasing military modernization programs, and the growing demand for precision strike capabilities in modern combat environments.

Market Overview

The global defense landscape is rapidly evolving, shaped by geopolitical tensions, cross-border disputes, and asymmetric warfare. Militaries are prioritizing precision, flexibility, and reduced collateral damage, which has accelerated the adoption of smart weapons systems worldwide.

Smart weapons—including guided bombs, cruise missiles, directed-energy weapons, and satellite/laser-guided systems—provide superior accuracy, extended operational range, and improved mission success rates compared to conventional arms.

In 2023, North America led the market with a 33.86% share, supported by high U.S. defense spending and the presence of leading contractors such as Lockheed Martin, Northrop Grumman, and Raytheon Technologies.

Growth Factors

• Increasing Need for Precision Weapons
  Rising warfare activities and cross-border disputes are boosting the demand for highly accurate and cost-effective weapons. Precision-guided systems offer enhanced range, minimal training requirements, and higher mission efficiency.

• Surging Defense Budgets
  Defense spending continues to rise globally. For example, the U.S. allocated USD 732 billion in 2020, while China, India, Russia, and Saudi Arabia collectively invested hundreds of billions more. These budgets directly support procurement of advanced smart weapons.

• Modernization Programs
  Ongoing replenishment and modernization initiatives are driving contracts for advanced systems. In March 2020, Raytheon Technologies signed a USD 110 million contract with the U.S. Navy to upgrade radar-guided gun systems.

Information Source:

https://www.fortunebusinessinsights.com/smart-weapons-market-104058

Restraining Factors

• Stringent Regulations
  Strict firearm and weapons regulations in countries such as India, New Zealand, Australia, and the U.K. hinder market growth. For instance, New Zealand banned semi-automatic weapons in 2019 after the Christchurch attacks.

Market Segmentation

By Product:

The missiles segment is projected to dominate the guided weapons market, driven by increasing defense budgets and the strategic need for advanced long-range precision strike capabilities. These systems are crucial for modern military operations, providing accuracy, speed, and lethality. Munitions are expected to record the highest growth rate, as militaries worldwide increasingly adopt precision-guided bombs and artillery shells to minimize collateral damage during counter-terrorism operations and cross-border conflicts. Additionally, segments such as guided projectiles, guided rockets, and directed energy weapons are experiencing steady adoption due to technological advancements, operational versatility, and integration into modern combat platforms.

By Platform:

The land segment is anticipated to be the fastest-growing, fueled by growing army procurements and modernization programs. Ground forces are investing in next-generation guided missiles, rockets, and munitions to enhance battlefield effectiveness and mobility. Air platforms are also experiencing significant growth, supported by air force modernization initiatives and the deployment of precision air-to-ground weapons that improve strike accuracy and operational efficiency. The naval segment, while holding a moderate share of 23.33% in 2023, is seeing rising interest in directed energy weapons and missile systems to enhance maritime defense capabilities against modern threats, including unmanned surface vessels and incoming missile attacks.

By Technology:

Laser guidance technology is forecasted to witness the highest growth due to its ability to provide highly accurate targeting in real-time, even against moving targets. Satellite guidance systems are also expected to see strong demand as GPS-based technologies enable precision strikes in all weather conditions and challenging terrains, enhancing operational reliability. Infrared and radar guidance continue to be widely adopted, offering versatile tracking and targeting solutions across multiple platforms. These technologies allow military forces to engage targets effectively in diverse scenarios, from close-range skirmishes to long-range strategic operations.

Regional Insights

• North America (USD 6.43 billion, 2023)
  The largest market, benefiting from high defense budgets and advanced modernization programs. U.S. procurement of over 6,000 munitions in 2019 highlights strong demand.

• Asia-Pacific
  Expected to showcase the fastest growth, driven by defense investments in China, India, Japan, and South Korea amid rising regional conflicts and terrorism.

• Europe
  Significant growth projected due to defense expansions in the U.K., France, and Russia, alongside contributions from players such as BAE Systems, Thales Group, and Rheinmetall AG.

• Rest of the World
  Middle Eastern countries like the UAE and Saudi Arabia are investing heavily in precision weapons. In 2019, EDGE (UAE) signed a USD 1 billion contract to deliver Desert Sting-16 precision weapons.

Key Players

• BAE Systems (The U.K)

• Boeing (The U.S.)

• General Dynamics Corporation (The U.S.)

• Lockheed Martin Corporation (The U.S.)

• MBDA (France)

• Northrop Grumman Corporation (The U.S.)

• Raytheon Company, a Raytheon Technologies company (The U.S.)

• Rheinmetall AG (Germany)

• Textron Inc. (The U.S.)

• Thales Group (France)

Leading players focus on business expansion, contracts, and acquisitions. For example, in February 2021, Lockheed Martin secured a USD 414 million contract with the U.S. Navy and Air Force for LRASM (Long-Range Anti-Ship Missile) systems.

Key Industry Developments

• February 2021 – Lockheed Martin signed a USD 414 million contract with the U.S. Navy and Air Force for LRASM delivery.

• January 2021 – India’s DRDO successfully tested the Smart Anti-Airfield Weapon (SAAW) on HAL’s Hawk-I jet.

• 2019–2020 – Multiple modernization contracts signed, including Elbit Systems’ USD 30 million supply of precision-guided mortar munitions to an Asia-Pacific nation.