Military & Defense Semiconductor Market Size
Military & Defense Semiconductor Market was over USD 25 Billion in 2023 and is projected to expand at a CAGR of over 8% during 2024 & 2032.
Government spending on the defense industry is fueling growth in the defense semiconductor market through the development of new technologies. The rising defense budgets facilitate research and development, leading to the application of sophisticated semiconductor technologies in communication, surveillance, and weapons systems. The demand for advanced semiconductor components, including microprocessors and sensors, increases as governments increase their defense capacities. This investment-fueled technological advancement enhances the industry growth.
or example, in May 2022, the Netherlands Government sanctioned another USD 5.3 billion in defense expenditure on a structural basis, reflecting a 40% rise in the defense budget from the 2022 budget.
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Military & Defense Semiconductor Market Report Attributes
Report Attribute Details
Base Year 2023
Military & Defense Semiconductor Market Size in 2023 USD 25 Billion
Forecast Period 2024 to 2032
Forecast Period 2024 to 2032 CAGR 8%
2032 Value Projection USD 55 Billion
Historical Data for 2018 – 2022
No. of Pages 220
Tables, Charts & Figures 242
Segments covered Mounting Technology, Application & Region
Growth Drivers
Government expenditure on the military increasing
Usage of semiconductor parts that can handle radiation
Growing aircraft upgrades and modernization activities
Sophisticated semiconductor technology demand growth
More deployment of Artificial Intelligence (AI) and Machine Learning (ML) in the military
Pitfalls & Challenges
High price tag and lengthy development time
Geopolitical tensions and export limitations. These unique components are like the brains and sensors of military and defense systems. They make everything from communication to surveillance and weaponry possible. But there’s a catchgovernments are worried about other countries getting their hands on these vital components. So they put up roadblocks, making it hard for semiconductors to cross borders. It’s sort of a global game of hide-and-seek, with governments attempting to hold their valuable semiconductors close and war making it that much more difficult to find what they require. It makes it difficult for the militaries to obtain the semiconductors they require in order to create and sustain their advanced systems. It’s sort of like constructing a high-tech home without the foundation – it simply doesn’t work.
Military & Defense Semiconductor Market Trends
More demand for AI and edge computing by the military calls for improved processing chips. With more IoT and connected devices used in military equipment, semiconductors are needed for encrypted communication and processing data. Cybersecurity solutions become important, meaning sophisticated semiconductor technology to safeguard classified military data and communications. This mirrors the ever-evolving environment in which technology becomes essential for enhancing military power, connectivity, and security.
The growing awareness of vulnerabilities in military semiconductor production emphasizes the need for supply chain resilience. For critical defense uses, there is a shift towards increasing resilience and increasing domestic manufacturing capabilities. Quantum computing research and development for military purposes can influence future semiconductor requirements. To ensure global compatibility and cooperation among defense technologies, continuous international cooperations and standards development aim at enhancing interoperability between military systems, which affect semiconductor design and manufacturing concerns.
Military & Defense Semiconductor Market Analysis
By application, the market is divided among communications, weapons, vehicles, and soldiers. The communications segment led the market in 2023 with a share of more than 25%.
The military increasingly is accepting advanced communication systems that need high-performance semiconductors for processing data, encryption, and secure transmission. Communication systems based on semiconductors are an essential part of command-and-control operations, allowing real-time exchange of information and decision-making in military operations.
Exploitation of unmanned systems in military relies on their strong communication strengths, thus a demand for semiconductors that support guaranteed and secure communications in Unmanned Aerial Vehicles (UAVs) and ground robots.
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Military & Defense Semiconductor Market Companies
Some of the major players operating in the military & defense semiconductor industry are
- Advanced Micro Devices Inc. (AMD)
- Infineon Technologies AG
- Microchip Technology Inc.
- NXP Semiconductors NV
- ON Semiconductor Corporation
- Texas Instruments Incorporated
