Naval Combat Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Naval Combat Systems Market is segmented by Type (Weapon Systems, Electronic Warfare, C4ISR), Platform (Aircraft Carrier, Destroyers, Frigates, Corvettes, Submarine, Others), and Geography (North America, Europe, Asia-Pacific, Latin America, and Middle-East and Africa). The report offers market size and forecasts by value (USD billion) for all the above segments.

Market Snapshot

Naval Combat Systems Market Size
Study Period: 2018-2027
Base Year: 2021
Fastest Growing Market: Asia Pacific
Largest Market: North America
CAGR: >2.5 %

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Market Overview

The Naval Combat Systems Market is poised to grow at a CAGR of over 2.5% during the forecast period (2022-2027).

The COVID-19 pandemic has resulted in several supply chain constraints on a global scale which has escalated the cost of acquisition for several naval programs. With shipyard workers being exposed to COVID-19 infection, the overall attendance declined by 50% during the peak of the pandemic, which resulted in the slight extension of deadlines for the completion of several shipbuilding programs.

The naval combat systems market is driven by the demand for new naval vessels as a result of the envisioned and ongoing fleet modernization programs of the global armed forces.

Currently, the navies have robustly increased their investments towards the development and deployment of directed energy weapons on board the naval vessels. This trend of installing laser weapon systems is anticipated to accelerate the growth of the market during the forecast period.

However, the inherent capital-intensive nature of the industry due to the associated high cost of R&D and the recent COVID-19-induced disruption in the global supply chain are some of the factors that hinder the growth of the market in focus during the forecast period.

Scope of the Report

The naval combat systems market encompasses the traditional aspects of defense forces categorization, including the procurement, upgrade, and modernization plans for naval assets to enhance the prowess of global armed forces. The study assimilates data from annual defense budget allocations of various countries to develop a comprehensively detailed overview of the current naval defense capabilities of the countries. The Naval Combat Systems Market is segmented based on Type, Platform, and Geography. By Type, the market is segmented into Weapon Systems, Electronic Warfare, and C4ISR. By Platform, the market is segmented into Aircraft Carrier, Destroyers, Frigates, Corvettes, Submarine, and Other Platforms. Other Platforms include Support Vessels, Patrol Boats, and Amphibious Ships. The report also covers the market sizes and forecasts for the market in major countries across different regions. The market sizing and forecasts have been provided in value (USD billion).

Weapon Systems
Electronic Warfare
Aircraft Carrier
Other Platform
North America
United States
United Kingdom
Rest of Europe
Rest of Asia-Pacific
Latin America
Rest of Latin America
Middle-East and Africa
Saudi Arabia
Rest of Middle-East and Africa

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Key Market Trends

The C4ISR Segment to Register the Highest CAGR During the Forecast Period

The C4ISR segment is expected to register a high CAGR during the forecast period. The highest growth rate of the segment is attributed to the growth in investments towards the modernization of existing command and control (combat management systems) and communication systems in the naval vessels to enhance the battleship capabilities. For instance, A joint venture of ASELSAN – HAVELSAN is currently modernizing the combat systems onboard 4 Barbaros-class Frigates of the Turkish Naval Forces. As a part of modernization, HAVELSAN will replace the TACTICOS combat management system with B-SYS CMS (a derivative of indigenous GENESIS CMS). The first ship is scheduled to be delivered by November 2022, and the last vessel is planned to be delivered in 2024. On the other hand, Saudi Arabia allocated USD 18 billion for the Royal Saudi Navy’s extensive planned command and control and intelligence-sharing network. This project includes large-scale upgrades to facilities, hardware, and software that support naval forces, including the country’s small marine and naval special warfare contingents. Such modernization programs of the naval forces are anticipated to propel the growth of the market.

naval combat systems_keytrend1

The Asia-Pacific Market to Register the Highest CAGR During the Forecast Period

The Asia-Pacific region of the market is expected to witness the highest growth during the forecast period owing to the robust investments of the armed forces in the region towards the expansion of the naval fleet as well as modernization of the existing fleet of vessels due to the ongoing geopolitical tensions among various countries in the region in the South China Sea. China is pushing forward with its military modernization plans amid territorial and maritime disputes. Tensions with India, the Taiwan Straits, and the South China Sea have forced China to expand its naval power. According to the Congressional Research Service, China is expected to introduce more than four aircraft carriers, more than 39 cruisers and destroyers, and more than 38 frigates and corvettes during the period of 2020 – 2040 period. Similarly, in June 2021, Fincantieri was selected by the Ministry of Defense of Indonesia to supply six FREMM class frigates as well as modernize and sell two Maestrale class frigates and the related logistical support. With the delivery of new naval vessels, the country’s FREMM class frigate fleet is anticipated to increase to 10. The new naval vessel programs are also being equipped with new and advanced weapon systems. For instance, Hanwha Systems was awarded a contract in March 2022 for the delivery of combat systems for the new 3,100-tonne corvette of the Philippine Navy. The other weapons include eight anti-ship missile launchers, two three-tube torpedo launchers, a 35 mm close-in weapon system, and a 76 mm main gun. Such modernization plans in various countries of the region are expected to further propel the growth of the naval combat systems market in the Asia-Pacific region during the forecast period.

naval combat _geography

Competitive Landscape

Some of the prominent players in the market are Leonardo S.p.A., Lockheed Martin Corporation, Raytheon Technologies Corporation, Thales Group, and General Dynamics Corporation. Leonardo is one of the major suppliers of weapon systems onboard naval vessel programs in countries like Canada, France, and Germany, among others. For instance, Leonardo was awarded a contract to provide four OTO 127/64 Light Weight (LW) Vulcano naval guns with the Automatic Ammunition Handling System (AAHS) as an optional solution for the new Canadian Surface Combatants (CSC) program, currently being constructed by Irving Shipbuilding Inc. Many players in the market are working together to develop advanced and innovative combat systems for various militaries worldwide. This is expected to help the technology transfer and enhance the mission capabilities due to the integration of different spheres of technologies in the end product. For instance, currently, Saab AB, BAE Systems PLC, and Lockheed Martin Corporation are working together to deliver a combat system integration for the Hunter class frigates to Australia. In addition to conventional weapon systems, the naval forces are integrating advanced laser weapon systems onboard a naval vessel for precise targeting. Such partnerships are expected to help the growth of the market and revenues simultaneously for each of the players during the forecast period.

Major Players

  1. Lockheed Martin Corporation

  2. Thales Group

  3. General Dynamics Corporation

  4. Raytheon Technologies Corporation

  5. Leonardo S.p.A.

BAE Systems PLC, Lockheed Martin Corporation, Thales Group, General Dynamics Corporation, Raytheon Technologies Corporation

Recent Developments

  • In March 2022, Damen Naval, a subsidiary of Damen Shipyards Group, selected Leonardo to provide and install its OTO 127/64 lightweight (LW) Vulcano defense systems onboard the four F126 frigates of the German Navy.
  • In January 2022, the Philippines signed a contract with BrahMos Aerospace Private Ltd worth USD 374.96 million to deliver a shore-based anti-ship variant of the BrahMos supersonic cruise missile. The contract also includes the supply of three missile batteries, training for operators and maintainers as well as the necessary Integrated Logistics Support (ILS) package. The company will help the Philippines set up the bases for anti-ship missile systems and its affiliated sensor suits and combat management systems to be used from the latter half of 2023.

Table of Contents


    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study




    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

  5. 5. MARKET SEGMENTATION (Market Size and Forecast by Value - USD billion, 2018 - 2027)

    1. 5.1 Type

      1. 5.1.1 Weapon Systems

      2. 5.1.2 Electronic Warfare

      3. 5.1.3 C4ISR

    2. 5.2 Platform

      1. 5.2.1 Aircraft Carrier

      2. 5.2.2 Destroyers

      3. 5.2.3 Frigates

      4. 5.2.4 Corvettes

      5. 5.2.5 Submarine

      6. 5.2.6 Other Platform

    3. 5.3 Geography

      1. 5.3.1 North America

        1. United States

        2. Canada

      2. 5.3.2 Europe

        1. Germany

        2. United Kingdom

        3. France

        4. Rest of Europe

      3. 5.3.3 Asia-Pacific

        1. China

        2. Japan

        3. India

        4. Australia

        5. Rest of Asia-Pacific

      4. 5.3.4 Latin America

        1. Brazil

        2. Mexico

        3. Rest of Latin America

      5. 5.3.5 Middle-East and Africa

        1. Saudi Arabia

        2. Israel

        3. Egypt

        4. Rest of Middle-East and Africa


    1. 6.1 Vendor Market Share

    2. 6.2 Company Profiles

      1. 6.2.1 BAE Systems PLC

      2. 6.2.2 Lockheed Martin Corporation

      3. 6.2.3 Raytheon Technologies Corporation

      4. 6.2.4 Thales Group

      5. 6.2.5 General Dynamics Corporation

      6. 6.2.6 Saab AB

      7. 6.2.7 L3Harris Technologies Inc.

      8. 6.2.8 Northrop Grumman Corporation

      9. 6.2.9 Safran SA

      10. 6.2.10 Elbit Systems Ltd

      11. 6.2.11 Terma Group

      12. 6.2.12 Kongsberg Gruppen ASA


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Frequently Asked Questions

The Naval Combat Systems Market market is studied from 2018 - 2027.

The Naval Combat Systems Market is growing at a CAGR of >2.5% over the next 5 years.

Asia Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Lockheed Martin Corporation, Thales Group, General Dynamics Corporation, Raytheon Technologies Corporation, Leonardo S.p.A. are the major companies operating in Naval Combat Systems Market.

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