Unmanned Aerial Vehicles (UAVs) will be one of the most dynamic growth sectors of the world aerospace industry this decade, report Teal Group analysts in their latest market analysis.

Teal Group’s 2020/2021 market study estimates that UAV production will increase from current worldwide UAV production of $5.6 billion annually in 2020 to $14 billion in 2029, totaling $95.5 billion in the next ten years. Military UAV research spending would add another $64.5 billion over the decade. (For further details and study availability).

“New technologies and increased trade are coming together to drive the UAV market growth,” said Philip Finnegan, Teal Group’s director of corporate analysis and an author of the study. “The next generation of systems is being developed at a time when trade is growing thanks to liberalized US export rule, cheap Chinese exports and strong demand for armed UAVs.”

“The Teal Group study predicts that the US will account for 80% of total military worldwide RDT&E spending on UAV technology over the next decade and 40% of the military procurement,” said Teal Group senior analyst Steve Zaloga, another author of the study. Much of the US RDT&E is intended to develop the next generation of systems that can survive in contested airspace.

The latest edition of the sector study, World Military Unmanned Aerial Vehicle Systems, Market Profile and Forecast 2020/2021, examines the worldwide requirements for UAVs, including UAV payloads and companies, and provides ten-year forecasts by country, region, and classes of UAVs. It incorporates the latest budget data worldwide, including the fiscal 2021 US defense budget.

The 2020-2021 study provides forecasts for a wide range of UAV payloads, including Electro-Optical/Infrared Sensors (EO/IR), Synthetic Aperture Radars (SARs), SIGINT and EW Systems, and C4I Systems, forecast to grow in overall value from $6.0 billion in FY20 to $8.5 billion in FY29. Following a funding downturn in recent years as several legacy endurance UAV sensor programs ended, Teal forecasts a near-term rise in the “default sensor” EO/IR market, from $1.8 billion in FY20 to $2.3 billion in FY24, but then a leveling off at about $2.4 billion per year for the rest of the decade, with growth led by modified U-2 sensors still likely to go aboard Global Hawk and by new production for classified UCAVs and mini/nano-UAVs.

The study breaks out billions of dollars of classified and future follow-on sensor programs with annual forecasts. Dr. David L. Rockwell, Teal’s lead electronics analyst, states “it is important to forecast these programs as they make up an increasing share of the available market, even though they are in no public DoD documents and are not monetized in any online sources.” He notes that “Detailed speculative ‘available’ forecasts – totaling almost $43 billion for payloads through FY29 – are intended to give early warning of programs that are not yet in DoD budgets or even under public discussion – to allow Teal’s clients to plan ahead before the RFPs are out.”

Along with EO/IR, comprehensive coverage of the many new programs in radio frequency (RF) markets is also included, with UAV radars forecast to grow from $1.6 billion in FY20 to $2.3 billion in FY29, and SIGINT and Electronic Attack (EA) markets to grow from $1.55 billion to $2.3 billion.

The 2020-2021 study also includes a UAV Manufacturers Market Overview that reflects the possible shakeup of leadership in the industry as multiple next generation systems are developed,” said Finnegan. “New players are emerging, and the leadership of some companies is being threatened.”

The study reflects the rapid growth of interest in the UAV business by covering approximately 60 U.S., European, Asia-Pacific, and Israeli companies, and reveals the fundamental reshaping of the industrial environment as UAV technology proliferates worldwide.