Market Trends of Asia-Pacific Air Defense Systems Industry
Land Segment to Witness Highest Growth During the Forecast Period
The land segment currently dominates the market studied and is expected to continue its dominance in the market during the forecast period. The demand for this segment is driven by the rising defense expenditures of major countries such as China, India, Japan, and South Korea. For instance, in 2022, China, India, Japan, South Korea, and Australia alone accounted for 88% of the region’s total defense spending. With these rising defense expenditures, these major countries and other countries in the region are increasing their defense capabilities to counter a wide range of threats like missiles (ballistic and cruise), aircraft, UAVs, rockets, artillery, and mortars. For instance, in November 2023, India announced that it was procuring a batch of Igla-S hand-held anti-aircraft missiles from Russia to bolster the army's combat capability. The Igla is a man-portable air defense system (MANPADS) that can be used to bring down enemy aircraft and helicopters.
Various countries in the region are in the phase of developing indigenously made advanced land-based air defense systems to counter geopolitical threats from various neighboring countries. For instance, Taiwan announced that it had entered mass production of the cutting-edge TC-2 air defense system in November 2023. This TC-2 is a short-to-medium-range defense system. The country’s army plans to receive 246 Sky Sword II air defense missiles. These TC-2s are designed as a land-based system to counter China’s fixed- and rotary-wing aircraft, drones, and cruise missiles. Overall, similar investments from various countries for the protection of their land borders are expected to propel the growth of the market studied during the forecast period.
China is Expected to Witness the Highest CAGR During the Forecast Period
China is expected to witness the highest growth in the air defense market during the forecast period. The growing military expenditure of the country, fueled by geopolitical tensions and border disputes between the country and its neighboring countries, is driving investments in the procurement of advanced air defense systems. The country is the highest defense spender in the Asia-Pacific region, with military spending of USD 292 billion in 2022, a growth of 2% compared to military spending in 2021. China’s current military spending priorities follow the guiding principles set out in the 14th Five-Year Plan (2021–2025). With this mass defense spending, the country is developing advanced weapon systems, such as high-energy laser weapons to intercept aerial targets.
For instance, in August 2023, researchers from the National University of Defense Technology announced that it is in the phase of developing a laser weapon that can be fired indefinitely. If these high-powered laser weapons are developed fully, they might have the potential to be a game-changing technology in advanced warfare, as they could shoot targets such as drones, missiles, and small aircraft at nearly the speed of light at lower costs than interceptor missiles. In addition to this, China South Industries Group Corporation (CSGC) and China North Industries Group Corporation announced that they had developed short-range air-defense systems named Type 625E AA Gun Missile Integrated Weapon System to detect low-flying aircraft such as drones in November 2022. Such developments are anticipated to bolster the growth of the market studied.
