According to Fortune Business Insights™, the global   smart weapons market   size was valued at USD 18.99 billion in 2023 and is projected to grow from USD 20.20 billion in 2024 to USD 45.24 billion by 2032, exhibiting a CAGR of 10.61% during the forecast period (2024–2032). The market’s robust growth is driven by increasing global defense budgets, ongoing military modernization efforts, and the rising demand for precision strike capabilities in dynamic combat environments.

Market Overview

The global defense landscape is witnessing rapid transformation amid heightened geopolitical tensions and asymmetric warfare threats. As a result, militaries worldwide are increasingly focusing on integrating advanced smart weapons systems—which offer enhanced precision, range, and operational flexibility—into their inventories. Smart weapons, such as sensor-fused munitions, guided bombs, cruise missiles, and laser/satellite-guided weapons, allow militaries to minimize collateral damage while maximizing mission success.

North America dominated the global smart weapons market in 2023, accounting for 33.86% of the total share, owing to its high defense expenditure and the presence of top-tier defense contractors including Lockheed Martin, Northrop Grumman, and Raytheon Technologies.

Key Market Players

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  Lockheed Martin Corporation (U.S.)

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  Raytheon Company / RTX (U.S.)

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  Northrop Grumman Corporation (U.S.)

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  General Dynamics Corporation (U.S.)

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  Boeing (U.S.)

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  Textron Inc. (U.S.)

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  BAE Systems (U.K.)

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  Thales Group (France)

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  MBDA (France)

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  Rheinmetall AG (Germany)

• Others

Source:

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

Market Segmentation

By Product:
The smart weapons market is segmented into missiles, munitions, guided projectiles, guided rockets, and directed energy weapons. Among these, missiles and munitions remain the dominant segments due to their extensive use across air, land, and naval forces. Their high precision, long operational range, and proven effectiveness in complex combat environments make them indispensable in modern military operations. Guided projectiles and guided rockets are also gaining traction for their cost-effective accuracy in tactical engagements. Meanwhile, directed energy weapons—though still emerging—represent the future of warfare with their potential for high-speed, low-cost targeting capabilities and minimal collateral damage.

By Platform:
Based on platform, the market is categorized into air, land, and naval systems. The land segment is anticipated to experience substantial growth over the forecast period, driven by increased government spending on border security, counter-terrorism initiatives, and the modernization of ground-based defense systems. However, the air segment is expected to witness significant demand as air forces globally adopt precision strike capabilities through the integration of smart weapons into fighter jets, helicopters, and UAVs. Naval platforms are also deploying smart weapons such as anti-ship missiles and guided torpedoes to enhance maritime security and strategic strike abilities.

By Technology:
In terms of technology, the market is divided into laser guidance, infrared guidance, radar guidance, satellite guidance, and others. Laser and satellite guidance systems are currently leading the market due to their ability to deliver high-precision targeting in diverse combat scenarios, including urban environments and open terrain. Satellite-guided bombs and missiles, in particular, are highly valued for long-range strike missions and their ability to maintain course accuracy using real-time GPS data. Infrared and radar guidance technologies also play critical roles, especially in low-visibility or electronic warfare conditions, while emerging technologies in the "others" category are expected to further enhance targeting efficiency and battlefield awareness.

Regional Insights

North America

Valued at USD 6.43 billion in 2023, North America is expected to maintain dominance throughout the forecast period. This is due to its massive defense budget, continual modernization programs, and the presence of established defense OEMs. In 2019, for instance, the U.S. Department of Defense allocated USD 4.3 billion for munitions procurement.

Asia-Pacific

The region is expected to witness the fastest growth, driven by rising defense investments across India, China, South Korea, and Japan. Increasing territorial conflicts, rising terrorism, and military modernization initiatives are driving demand.

Europe

Growth in Europe will be driven by prominent players like Thales Group, BAE Systems, and Rheinmetall AG, as well as increased defense spending by the U.K., France, and Russia.

Rest of the World

Countries in the Middle East, such as the UAE and Saudi Arabia, are investing heavily in smart weapons. In June 2019, EDGE Group secured a USD 1 billion contract to deliver Desert Sting-16 precision-guided munitions to the UAE Armed Forces.

Market Dynamics

Key Growth Drivers

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  Rising Demand for Precision Weapons: Growing cross-border conflicts and asymmetric warfare are pushing nations to adopt smart weapons for their cost-efficiency, precision, and reduced collateral damage.

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  Increased Defense Expenditure: According to SIPRI, countries like the U.S. (USD 732 billion), China (USD 261 billion), India (USD 71.1 billion), Russia (USD 65.1 billion), and Saudi Arabia (USD 61.9 billion) are investing heavily in military upgrades.

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  Technology Advancements: Integration of AI, advanced sensors, autonomous targeting, and navigation systems are enhancing the accuracy and responsiveness of smart weapons.

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  Strategic Defense Contracts: For instance, in March 2020, Raytheon Technologies signed a USD 110 million contract with the U.S. Navy to modernize radar-guided gun systems for defense against littoral threats.

Restraints

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  Stringent Regulatory Frameworks: Government regulations on the export, acquisition, and use of guided weapons, especially in India, New Zealand, Australia, and the U.K., are restricting market expansion.

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  Pandemic-Related Disruptions: COVID-19 disrupted production lines and caused delivery delays. In March 2020, Rafale production was halted in France, delaying aircraft delivery to India. Despite this, major contracts continued, such as Raytheon's USD 353.3 million deal with the U.S. Navy for missile systems.

Report Coverage

The smart weapons market research report offers a comprehensive analysis of the global industry, focusing on critical components such as product types, key players, platforms, and core technologies used in smart weapons systems. It provides valuable insights into ongoing market trends, the competitive landscape, pricing dynamics, market positioning, and key developments that are shaping the industry's trajectory.

In addition to the above, the report evaluates both direct and indirect market drivers and constraints, highlighting factors that have significantly influenced global market performance in recent years. This thorough assessment equips stakeholders with actionable intelligence to support strategic planning and decision-making.

Key Industry Developments

In  February 2021 , Lockheed Martin Corporation secured a contract worth USD 414 million with the U.S. Navy and Air Force to deliver the Long-Range Anti-Ship Missile (LRASM). This precision-guided, standoff missile is designed for advanced maritime strike capabilities and is based on the proven Joint Air-to-Ground Standoff Missile (JASSM) platform.

In  March 2020 , Raytheon Technologies was awarded a contract valued at USD 86 million by the U.S. Department of Defense (DoD) to provide engineering services for the M982 Excalibur, a long-range precision artillery munition. The Excalibur system enhances strike accuracy and effectiveness in extended-range missions.