Defense Electronics Obsolescence Market Size - By Solution Type, By Platform, and By End Use - Global Forecast, 2025 - 2034

Defense Electronics Obsolescence Market Size

The global defense electronics obsolescence market was valued at USD 2.7 billion in 2024 and is estimated to grow at a CAGR of 8.4% to reach USD 6 billion by 2034. The growth of the market is attributed to factors such as the increasing defense budget coupled with the growing adoption of digital twin & predictive analytics.
 

The market for obsolete components in military electronics underwent further development with the focus on modernization and military preparedness during Trump's presidency. The administration focused on structure modernization and perpetuating the use of legacy systems. This resulted in a greater need for obsolete component barter, maintenance, sustainment, and reverse engineering. Investments in missile defense and aerospace command also emphasized the demand for enduring support of obsolete electronics.
 

The industrial base resilience emphasis further promoted domestic sourcing, mitigation of obsolescence, and strategy for sourcing management. Also, the implementation of initiatives such as the National Defense Strategy along with advanced procurement reform prompted the defense industry to adopt workflows, proactive lifecycle management, and digital technologies, thus advancing the market for electronic sustaining maintenance and forecasting. All these policies together created a more responsive and innovation-focused environment for managing obsolescence.
 

The increasing defense budget serves as a primary factor behind the growth of the defense electronics obsolescence market. Modern military strategies are increasingly emphasizing towards platform longevity, which has led to surge in demand for replacement parts for modernizing and maintaining legacy systems, that has led to rise of DMSMS (Diminishing Manufacturing Sources and Material Shortages) programs. Also, the growing defense budget is further encouraging OEMs to invest in predictive analytics tools to forecast obsolescence, digital twin modelling for lifecycle planning, and supply chain digitization to track component availability globally.
 

Additionally, this increase in budget further allows sustainment of deployed assets in several active and high risk regions such as Ukraine, and Indo-Pacific. Several deployed systems are further decades old, which further fuels the obsolescence related spending, contributing to the market growth. For instance, the defence budget of U.S. was allocated USD 842 billion in 2024, with over USD 130 billion allocated to operations, sustainment, and modernization directly benefiting obsolescence management markets., as stated by the U.S. government.
 

The growing adoption of digital twin & predictive analytics is another major growth driver for the growth for the defense electronics obsolescence market. This digital twin technology maps entire lifecycle of a platform and subsystems, which are increasingly integrated with predictive analysis to identify critical electronic components nearing obsolescence, predict future end-of-life (EOL) trends before parts become unavailable, and alert supply chain teams in advance to initiate sourcing or redesign.
 

Additionally, these systems are gaining rapid traction among armed forces due to growing emphasis on lifecycle cost optimization, which further reduces emergency part procurement costs, unplanned downtimes, expensive redesigns by early obsolescence detection. Software vendors, analytics providers, and lifecycle support contractors are tapping into new revenue streams, thanks to the convergence of digital engineering and obsolescence management. For instance, in March 2024, the U.S. Department of Defense (DoD) is leveraging its digital engineering strategy to employ digital twins for sustainment and obsolescence planning, particularly for platforms such as the F-35.
 

Defense Electronics Obsolescence Market Trends

• Recent trend observed in the market is the growing emphasis towards modular open system approach (MOSA), which mandates modular and interoperable defense systems, that further reduces obsolescence and upgrade costs. This standardization of open interfaces such as FACE for aviation software and VICTORY for vehicle networks enables integration of components from different vendors, that further encourages innovation and competition in the market.
   
• This trend is expected to create new opportunities for players as they can focus on offering components with software-defined capabilities that can be updated remotely. This will help them attract new customers and increase the market share.
   
• The rapid integration of lifecycle forecasting tools that uses AI and predictive analytics is a key trend in the defense electronics obsolescence market, which anticipates component obsolescence by analysing historical data, market trends, and supplier dynamics. For instance, Raytheon’s AI platforms forecast failure rates and recommend mitigation strategies, minimizing operational disruptions.
   
• Another significant trend in the market is the rise of additive manufacturing, that ensures on-demand production of discontinued parts. Technologies such as SPEE3D’s cold spray and SLS printing are gaining rapid traction among manufacturers to ensure production of high-strength and lightweight components from metals or polymers. This further reduces cost, inventory needs, and downtime, while ensuring long term support for aging defense systems.
   

Defense Electronics Obsolescence Market Analysis

Based on the solution type, the defense electronics obsolescence market is segmented into obsolescence monitoring & forecasting, component lifetime buy & last time buy (LTB), redesign & retrofit solutions, emulation & simulation, alternative sourcing (aftermarket, brokers), and software & firmware updates.
 

• The component lifetime buy & last time buy (LTB) market was the largest market and valued at USD 779.2 million in 2024. The aging military platforms often remain operational for 30 – 50 years, but the production cycled of electronic components last around 5 – 10 years, which position component lifetime but and last time buy as an essential strategy to bridge this mismatch. Also, with the increasing usage of commercial off the shelf parts (COTS) components, the demand for lifetime buys to maintain compatibility is set to grow. Additionally, the geopolitical disruptions, export restrictions, and chip shortage has led to manufacturers favouring last time buy strategy to further prevent capability gaps.
   
• The emulation & simulation market is the fastest growing market and is anticipated to grow with a CAGR of 13.5% during the forecast period. Several legacy systems are often consisting of discontinued microprocessors and controllers, which fuels the demand for emulation, that further offers a way to recreate functionality. Also, the military requirement for form fit function compliance further pushes the fuel of emulation market, as it supports these FFF compatibility and allows easier replacement of parts without major system redesign or requalification. Additionally, the shift from defense platforms towards software defined systems further position emulation and simulation as integral to sustaining and evolving legacy capabilities.

Based on the platform, the defense electronics obsolescence market is categorized into airborne, naval, land, and space.
 

• The airborne platform market was the largest market and was valued at USD 1.2 billion in 2024. The growth in this segment is propelled by the rising demand for extended services life of combat aircrafts such as F-15, F/A-18, MiG-29, and Su-30. These aircrafts require constant upgrades and sustainment including the replacement of avionics, radars, and electronic warfare (EW) systems. Additionally, the rapid integration of new weapons and surveillance technology into legacy aircrafts further faces significant compatibility changes, which further fuels the demand for form fit function compatible requirements and emulations. Furthermore, several unmanned aerial vehicles (UAVs) and support aircrafts further uses COTS components for cost efficient solutions, as they are at risk of early obsolescence, which further require robust LTB and aftermarket sourcing strategies.
   
• The space platform market is the fastest growing market and is anticipated to grow with a CAGR of 12.3% during the forecast period. The long mission lifecycle of space and space based platforms, that often operate for 10 – 20+ years. As these electronics age in orbit, ground control systems, and spare unit production to address component obsolescence. Also, there are very limited opportunities for physical repair or upgrade in space based platforms, which further drives the demand for highly reliable obsolescence proofed components at launch. Moreover, the growing expansion of space domain platforms along with the growing collaboration with private space firms such as SpaceX and OneWeb, leads to more mixed use electronic architecture structures, which pushes the management needs and obsolescence risk.
   

Based on the end use, the defense electronics obsolescence market is bifurcated into defense OEMs, MRO providers, and government & defense strategies.
 

• The defense OEMs market was the fastest growing market and was valued at USD 1.3 billion in 2024. The rise of platform sustainment contract is further positioning OEMs responsible for manufacturing and life support, which pushes the demand to manage electronic obsolescence across the product life cycle. Additionally, OEMS are increasingly investing in digital engineering tools, that further predict component aging and obsolescence and assists in maintaining competitiveness and compliance with military guidelines. Also, the shift towards open architecture systems in defense programs has led to surge in adoption of modular, open system framework such as MOSA, and SOSA, that requires OEMs to build electronics with easy upgrades, further spurring consistent demand for integrated obsolescence strategies.
   
• The MRO provider market is anticipated to grow with a CAGR of 7.8% during the forecast period. MRO are at forefront of maintain legacy platforms, particularly in airframes, avionics, and sensors, that require constant troubleshooting and sourcing of obsolete parts. Moreover, these MROs are increasingly investing in obsolescence monitoring software and integration with digital twin technologies to further assist in transformation from reactive repair to predictive replacement. In addition, the growing demand for component level repairs is further contributing to the growth of MRO, which often require obsolete microelectronics, connectors, and ICs.

• The U.S. dominated the defense electronics obsolescence market, accounting for USD 936.2 million in the year 2024. The growth in the region is propelled by the increasingly aging military platforms such as B-52 bomber, F-15s, and Aegis destroyers, all of which rely on continuous support for obsolete electronics. Also, the growth in the market is further supported by the increasing investment from government towards sustainment and modernization programs for F-35 and patriot systems. Additionally, the rapid adoption of digital twins and predictive analysis for obsolescence forecasting by U.S. DoD further propels market growth. For instance, the defense spending by the U.S. was valued at USD 997 billion in 2024, which was equivalent to nearly 40% of military expenditure around the world in 2024, as stated by PGPF.
   
• The Germany defense electronics obsolescence market accounted for USD 108.4 million in the year 2024. Several legacy platforms such as Tornado and Eurofighter are operated across different countries, all of which require tailored obsolescence strategies. Also, the implementation of joint initiative such as PESCO and European Defence Fund programs is further driving the investment towards the shared sustainment capabilities. Moreover, the increasing emphasis towards cybersecurity and electronic warfare modernization is fuelling the upgrade of several legacy EW and radar systems, which fuels the demand for obsolescence components in legacy platforms
   
• The defense electronics obsolescence market in China is projected to reach USD 588.4 million by the year 2034. The growth in the market is fuelled by the increasing regional threats and geopolitical tensions among South China Sea, which further push the nations towards modernization and sustaining of their existing defense assets. Furthermore, the aggressive push of China towards integration of AI, quantum communication and fifth gen radar systems has further created incompatibilities with older electronics, which further leads to obsolescence. Moreover, the growing focus towards expansion of cyber and electronic warfare has created a surge in demand for electronic systems upgrades and compatibility reinforcing, which further supports the market expansion in the region.
   
• The Japan defense electronics obsolescence market accounted for USD 44.7 million in 2024. The shift towards indigenous electronics in Japan has led to surge in development of local defense electronics, that is further backed by the National Defense Program guidelines for reducing obsolescence vulnerability. Also, the increasing geopolitical pressure from China and North Korea is further driving upgrades in radar, missile defense, and communications systems, which further increases the pressure to replace outdated components.  
   
• The India defense electronics obsolescence market is anticipated to grow at a CAGR of over 10.9% during the forecast period. The growth in market is driven by the focus on legacy fleet sustainment such as MiG-21s, Jaguar aircraft, and T-72 tanks, all of which require electronic modernization due to severe obsolescence. Additionally, the implementation of Make in India and Atmanirbhar Bharat initiative from government, which encourages domestic development of electronics, repair, and reverse engineering to replace obsolete foreign parts. Furthermore, the Indian armed forces are increasingly adopting obsolescence tracking systems and digital logistics to further identify and mitigate component risk in real time.
   
• The Middle east and Africa defense electronics obsolescence market is anticipated to surpass USD 306.5 million by the year 2034. Several countries such as Saudi Arabia, UAE, Egypt, and South Africa, heavily rely on imported platforms such as F-15s, Mirage jets, Leopard tanks, Hawk trainers from other countries, which further pushes the demand for local or third party obsolescence management solutions. Additionally, the limited domestic electronic manufacturing base of the region further makes the dependent on aging foreign supply chain, which further fuels the demand for alternative sourcing, reverse engineering, and emulation services, especially due to export control regimes and growing geopolitical tensions.
   

Defense Electronics Obsolescence Market Share

The market is highly competitive and fragmented with the presence of established global players as well as local players and startups. The top 4 companies in the defense electronics obsolescence market are BAE Systems plc, Lockheed Martin Corporation, Northrop Grumman, and RTX Corporation, collectively accounting for a share of 35.3% market share. Leading companies in the market are investing in the AI-driven lifecycle analysis, digital twin platforms, and predictive analytics tools, that further offers real time identification of components at risk and proactive obsolesce mitigation. The innovation in the market such as form-fit-function (FFF) compatible redesigns, reverse-engineered microelectronics, and automated bill-of-material (BOM) risk tracking systems, are gaining rapid popularity among manufacturers due to their ability to maintain mission readiness. 
 

Additionally, the rapidly evolving demand for scalable, modular obsolescence management solutions is being addressed by the growing need to extend the lifespan of legacy platforms operating in multi-domain and distributed threat environments. Increased deployment of thermal management systems is a major trend observed across various platforms such as legacy fighter aircraft, missile defense batteries, unmanned aerial systems (UAS), naval platforms, and C4ISR systems.
 

Defense Electronics Obsolescence Market Companies

The market features several prominent players, including:

• AT Engine Controls
• Bae Systems
• Boeing Defense
• L3Harris Technologies
• Leonardo
• Lockheed Martin
• Lynx
• Mercury Systems
• Northrop Grumman
• Rheinmetall
• RTX
• Saab RDS
• SMT Corp
• Teledyne Technologies
• Thales Group
• TT Electronics
   

L3Harris Technologies is a leader in the defense electronics obsolescence segment, owing to commanding knowledge in integrated defense systems and active obsolescence management. The company provides comprehensive solutions, such as reverse engineering, lifecycle extension, and mission-critical systems upgrades to keep pace with accelerating automatisms. L3Harris distinguishes itself through custom engineering and global reach, as well as through innovative partnerships like the one to design advanced military robotic payloads. The market's growth is fuelled by pace setting technology, supply chain restrictions, as well as defense readiness infrastructure.
 

Raytheon Technologies remains a key player in in the defense electronics obsolescence market with a well established reputation for their systematic approaches to obsolescence management and modular open systems architecture. The company is proficient in cost avoidance, lifecycle planning, and the integration of emergent technologies such as digital twins and additive manufacturing for the enduring preservation of defense electronics. Raytheon differentiates itself through partnership with defense agencies and a robust history of aging multi-generational systems.
 

Defense Electronics Obsolescence Industry News

• In October 2023, Collins Aerospace has signed a license agreement with South Korea’s Hanwha Systems. This agreement allows Hanwha to manufacture airborne tactical radios for the upgrade program of the Second Generation Anti-jam Tactical UHF Radio for NATO waveforms (SATURN). This collaboration supports obsolescence management by ensuring uninterrupted access to essential radio technologies.
   
• In September 2023, Collins Aerospace was selected by BAE Systems to supply the large-area display for the Eurofighter Typhoon cockpit development. This collaboration focuses on integrating advanced display technology with proven design elements to minimize development risks and address obsolescence, ensuring the longevity of the Typhoon’s avionics suite.
   

The defense electronics obsolescence market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Million) from 2021 to 2034, for the following segments:

Click here to Buy Section of this Report

By Solution type                

• Obsolescence monitoring & forecasting    
• Component lifetime buy & last-time buy (LTB)    
• Redesign & retrofit solutions
• Emulation & simulation       
• Alternative sourcing (aftermarket, brokers)        
• Software & firmware updates        

By Platform             

• Airborne       
• Naval 
• Land  
• Space 

By End Use              

• Defense OEMs
• MRO providers        
• Government & defense agencies    

The above information is provided for the following regions and countries:

• North America 
  • U.S.
  • Canada 
• Europe
  • Germany
  • UK
  • France
  • Spain
  • Italy
  • Netherlands 
• Asia Pacific
  • China
  • India
  • Japan
  • Australia
  • South Korea 
• Latin America
  • Brazil
  • Mexico
  • Argentina 
• Middle East and Africa
  • Saudi Arabia
  • South Africa
  • UAE