US Precision-guided Munitions (PGMs) Market - 2024 - 2031

US Precision-guided Munitions (PGMs) Market - 2024 - 2031

The US Precision-Guided Munitions Market reached US$ 6.23 billion in 2023 and is expected to reach US$ 9.82 billion by 2031, growing with a CAGR of 5.85% during the forecast period 2024-2031.

Precision-guided munitions (PGMs) represent a cornerstone of modern military operations, offering unparalleled accuracy and efficiency in targeting while minimizing collateral damage. The advanced weapons utilize advanced guidance systems such as inertial measurement units, GPS receivers, laser seekers and radar systems to dynamically adjust their flight paths in response to real-time conditions. This technological precision ensures effectiveness even in challenging environments, including adverse weather or operational targeting errors.

The history of PGMs dates back to World War II, with significant advancements emerging during the 1960s and 1970s. The introduction of laser-guided bombs marked a turning point, transforming military capabilities and ushering in a new era of precision warfare. Their prominence was solidified during the 1991 Gulf War, where the use of PGMs exceeded that of traditional unguided munitions. Since then, PGMs have become integral to US military operations, supported by substantial investments in research, development, procurement and modernization efforts by the Air Force, Army, Navy and Marine Corps.

The US Department of Defense (DOD) continues to prioritize PGMs as a strategic asset. In FY2021, the DOD allocated approximately US$ 4.1 billion to procure over 41,000 weapons across 15 munitions programs. Subsequent years saw sustained funding, with US$ 3.3 billion requested for FY2022, US$ 3.9 billion for FY2023, US$ 3.9 billion for FY2024 and US$ 3.6 billion projected for FY2025. This reflects the growing reliance on PGMs to meet the evolving demands of modern warfare.

The US PGM portfolio is diverse, encompassing air-launched missiles like the Hellfire and JAGM, ground-launched systems such as the Precision Strike Missile and naval weapons like the Tomahawk cruise missile. These munitions enable precise execution of air, ground and naval operations, reinforcing their indispensable role in ensuring mission success in today’s military landscape.

Air-Launched Precision-Guided Munitions

The US military has employed air-launched precision-guided munitions (PGMs) extensively, integrating advanced technologies to enhance their accuracy and operational effectiveness. Among these, Paveway Laser-Guided Bombs and the Joint Direct Attack Munition (JDAM) stand out. The Paveway series originally developed during the Vietnam War, introduced guidance kits that transform unguided bombs into precision weapons. The kits, consisting of a laser guidance seeker and a tail assembly, enable precise targeting by detecting laser-marked objectives.

Paveway has undergone significant advancements, including the Paveway III (1990s) for low-altitude guidance and the Paveway IV with satellite guidance for enhanced accuracy. Despite the US primarily using Paveway II and III kits, Paveway IV is reserved for foreign militaries. Major producers like Raytheon and Lockheed Martin have delivered over 550,000 Paveway kits collectively.

Similarly, the JDAM modifies unguided bombs by equipping them with GPS guidance, achieving accuracy within 3 meters. JDAMs, operational since 1997, are compatible with all US fixed-wing strike platforms and boast a range of 13 nautical miles. Upgrades such as laser guidance allow JDAMs to strike moving targets effectively. Boeing’s ongoing developments aim to produce a powered JDAM, offering a cost-effective alternative to cruise missiles. These innovations underscore the US military's commitment to advancing air-launched PGMs, which continue to play a pivotal role in modern combat scenarios.

Ground-Launched Precision-Guided Munitions

US military employs advanced ground-launched PGMs like the Guided Multiple Launch Rocket System (GMLRS), Army Tactical Missile System (ATACMS) and the emerging Precision Strike Missile (PrSM) to enhance battlefield precision and effectiveness.

The GMLRS, developed in collaboration with several allied nations, is a GPS-guided 227-millimeter rocket operational since 2003. It features a 200-pound warhead with a maximum range of 70 kilometers and is launched from platforms like the M270 MLRS and M142 HIMARS. With over US$ 5.4 billion spent on procuring more than 42,000 rockets, the Department of Defense (DoD) plans additional investments exceeding US$ 4.3 billion for 29,000 GMLRS between FY2021 and FY2024. Notably, GMLRS is also exported to allies, including Bahrain, the UAE, Poland and Romania.

The ATACMS, initially developed in the 1980s, incorporates GPS guidance and specialized warheads for targeting armored and hardened structures. Upgrades include ship-targeting capabilities. However, the Army intends to phase out ATACMS, replacing it with the Precision Strike Missile (PrSM). The PrSM, designed for the M270 and M142 platforms, offers superior range exceeding 400 kilometers, anti-jam GPS antennas and dual-missile launcher pods. The PrSM successfully underwent its first flight tests in 2019, with plans for operational deployment by FY2023.

The munitions highlight the US military's focus on precision and adaptability in ground-based operations, ensuring effectiveness across diverse combat environments.

Naval Precision-Guided Munitions

Naval PGMs like the Tomahawk Cruise Missile, Standard Missile-6 (SM-6) and Naval Strike Missile (NSM) exemplify the US Navy's precision and versatility in maritime operations.

The Tomahawk Cruise Missile, operational since the 1970s, is a long-range missile capable of traveling up to 870 nautical miles at subsonic speeds. Initially used during Operation Desert Storm, over 1,600 Tomahawks have been deployed in various conflicts. The latest Block IV variant integrates GPS guidance, satellite communication and improved propulsion systems. Between FY1998 and FY2018, the Navy invested US$ 5.87 billion in 4,984 Tomahawks, with US$ 349.2 million allocated for 182 units in FY2021 and FY2022.

The SM-6, derived from the SM-2 Block IV, is a multi-role missile supporting anti-air, anti-surface and anti-ballistic missions. It integrates with the Naval Integrated Fires-Counter Air program, leveraging AEGIS radars and the E-2D Advanced Hawkeye for enhanced targeting. Since entering production in FY2009, the SM-6 has become a critical component of the Navy’s arsenal, with US$1.11 billion invested in 250 units through FY2021 and FY2022.

Lastly, the NSM, developed by Norway's Kongsberg, is a low-observable, anti-ship cruise missile with a range of up to 300 nautical miles. Integrated into Littoral Combat Ships, the NSM was procured beginning in FY2019. In FY2022, the Navy requested funding for 34 units, further solidifying its role in maritime defense. The naval PGMs demonstrate the Navy's commitment to maintaining technological superiority and precision in modern warfare.

Background

The Department of Defense (DoD) defines Precision-Guided Munitions (PGMs) as guided weapons designed to destroy point targets while minimizing collateral damage. In addition to accuracy, PGMs offer enhanced range and reduce the number of sorties required for effective battlefield operations. However, their primary drawback is cost, especially for long-range missiles. PGMs encompass air- and ship-launched missiles, guided bombs, and multiple-launch rockets, relying on advanced guidance systems like GPS, laser guidance, and inertial navigation systems for accuracy within three meters.

PGMs have significantly evolved since their inception in the 1940s, when the US Army Air Corps tested radio-guided glide bombs. Initial challenges, including high costs and limited technology, delayed widespread adoption. By the Vietnam War, laser-guided bombs had become pivotal, with the US military achieving unprecedented accuracy during operations. In Operation Desert Storm (1991), PGMs accounted for only 6% of munitions used but demonstrated unmatched precision, striking critical targets while minimizing civilian damage.

In recent conflicts, such as counter-Islamic State operations in Iraq and Syria, PGMs have become indispensable. Between 2014 and 2017, nearly 139,000 PGMs, primarily JDAMs and Hellfire Missiles, were employed, showcasing their strategic importance. Modern PGMs have transformed aerial attack operations, enabling single sorties to target multiple locations with high precision, drastically reducing the inefficiencies of traditional munitions. Their operational effectiveness underscores their centrality in contemporary warfare.

Dynamics

Advancing Precision and Affordability

The precision-guided munitions (PGMs) market presents significant opportunities with the advancements introduced by CoAspire’s innovative technologies. The Guided Training Round (GTR) offers a cost-effective, dual-mode GPS and laser-guided solution for fighter aircraft training, addressing the challenges of high training costs and range limitations associated with traditional munitions. Its compatibility with multiple platforms enhances its appeal to the Department of the Navy, US Air Force and international allies, bolstering readiness and operational efficiency.

The Rapidly Adaptable Affordable Cruise Missile (RAACM) expands market potential by combining affordability with extended range and advanced digital engineering. Its integration with standard airframes like the F-15E and F/A-18E/F ensures seamless adoption across allied forces. RAACM’s development leverages rapid prototyping, 3D printing and commercial off-the-shelf components, significantly reducing production costs and timelines. With increasing global demand for scalable, precise and affordable defense solutions, CoAspire's advancements uniquely position the company to capture substantial market share in the PGM sector.

Technological Advancements and Strategic Applications

The demand for precision-guided munitions is driven by the need for accuracy, operational efficiency and minimized collateral damage. The US military's adoption of PGMs reflects a strategic shift toward high-precision operations, particularly in complex conflict environments. Technologies like GPS-aided inertial navigation systems, radar seekers and multimode guidance systems enable these munitions to adapt to dynamic battlefield conditions.

The continuous modernization of munitions, such as the development of the Advanced Anti-Radiation Guided Missile–Extended Range (AARGM-ER) and Joint Direct Attack Munition (JDAM), showcases the military's commitment to maintaining a technological edge. Additionally, the shift from unguided to guided munitions highlights the increasing importance of precision in modern warfare. As military strategies prioritize intelligence-driven operations, PGMs align with the goals of accuracy and effectiveness, securing their position as a critical market driver.

Robust Defense Funding Driving the Precision-Guided Munitions Market

A key driver of the precision-guided munitions market is the significant investment in US Department of Defense (DoD) modernization initiatives. The Fiscal Year (FY) 2024 defense budget allocates US$ 315 billion for Procurement and Research, Development, Test and Evaluation (RDT&E). Of this, US$ 14.8 billion is dedicated to missile defense programs, emphasizing advancements in tactical ballistic missile interceptors and strategic missile systems. The implementation of Large Lot Procurement (LLP) strategies for precision missile programs, totaling US$15.1 billion across the FYDP, enhances production efficiency and accelerates delivery.

The budget also supports critical programs such as the AIM-120D AMRAAM and AGM-158B JASSM-ER, which exemplify a commitment to precision, affordability and adaptability. By funding expanded production capacities and advanced capabilities, these investments ensure technological superiority, addressing evolving threats while fueling growth in the precision-guided munitions market globally.

Budgetary Constraints and Program Complexity

Despite robust investments in defense modernization, the precision-guided munitions market faces significant restraints due to budgetary limitations and program complexities. The US Department of Defense (DoD) allocates substantial funding for Procurement and Research, Development, Test and Evaluation (RDT&E); however, the increasing number of Major Defense Acquisition Programs (MDAPs) and the rising cost of advanced weapon systems strain fiscal resources.

Programs like Large Lot Procurement (LLP), while aimed at cost efficiency, require upfront funding for Economic Order Quantities (EOQ) and long-lead item procurement. These expenditures, coupled with the intricacies of managing multiyear contracts and aligning production schedules, pose challenges. Furthermore, the focus on high-cost technologies such as the Next Generation Interceptor and advanced missile systems can limit investment flexibility for other programs. These financial and logistical hurdles can delay production timelines, restrict market scalability and impede the adoption of precision-guided munitions in broader defense strategies.

Regulations and Compliance

The development and deployment of PGMs are governed by stringent regulations to ensure compliance with international laws and ethical standards. The US Department of Defense (DOD) emphasizes precision in targeting to minimize collateral damage and uphold the principles of the Law of Armed Conflict. Technologies like M-code GPS receivers, featured in advanced munitions such as the Joint Air-to-Surface Strike Munition (JASSM) and JDAM, are designed to prevent misuse and ensure reliability in denied environments.

Furthermore, procurement processes for PGMs adhere to transparency and accountability standards, with detailed budgetary justifications outlined in documents such as the FY2025 budget requests. These processes ensure that investments in research, development and production align with national defense priorities. Collaborative programs, such as the Long Range Anti-Ship Missile (LRASM) developed by DARPA, the Navy and the Air Force, also highlight the importance of inter-agency compliance.

As international regulations evolve, particularly in areas like export controls and arms treaties, adherence to these frameworks ensures the responsible deployment of PGMs. By maintaining strict compliance, the sector balances innovation with ethical and legal considerations, reinforcing its commitment to global stability.

Segment Analysis

The US precision-guided munitions (PGMs) market is segmented based on type, guidance system, platform, end-user and application.

GPS-guided munitions use in different types of missiles

GPS-guided munitions utilize satellite navigation systems for precise targeting and enhanced accuracy. This includes various missile types such as air-to-surface, surface-to-surface and air-to-air, benefiting from GPS-based guidance for real-time targeting corrections. The key advantage lies in improved accuracy over long ranges and in complex environments. GPS-guided systems are widely used in defense applications, including tactical missiles and guided bombs. Their adoption is driven by increasing military needs for precision strikes, reducing collateral damage and enhancing overall operational efficiency in modern warfare scenarios.

Competitive Landscape

The major US players in the market include Lockheed Martin Corporation, Raytheon Technologies Corporation, Northrop Grumman Corporation, General Dynamics Corporation, BAE Systems, Inc., L3Harris Technologies, Inc., Boeing Defense, Space & Security, Harris Corporation, Textron Systems Corporation and AeroVironment, Inc.

Sustainability Analysis

The sustainability of the precision-guided munitions (PGM) market is largely influenced by ongoing advancements in defense technologies, coupled with financial and environmental considerations. The US Department of Defense’s continued investment in modernization, including the US$315.0 billion allocation for Fiscal Year 2024, supports the development of advanced PGMs, ensuring the long-term sustainability of the sector. The transition to multiyear contracts and Economic Order Quantities (EOQ) financing is designed to improve manufacturing efficiency and reduce production costs, contributing to the market's financial sustainability.

However, environmental concerns surrounding the lifecycle of PGMs, from production to disposal, pose challenges for sustainability. The defense industry is increasingly pressured to develop technologies that minimize environmental impact, including reducing the carbon footprint of manufacturing and enhancing the recyclability of components. Moreover, geopolitical instability and budgetary constraints could limit the scale of procurement, potentially slowing market growth and hindering long-term sustainability.

By Type

● Air-Launched Munitions

● Ground-Launched Munitions

● Naval-Launched Munitions

● Submarine-Launched Munitions

By Guidance System

● GPS Guided

● Laser Guided

● Infrared Guided

● Electro-optical Guided

● Radar Guided

● Combination of Guidance Systems

By Platform

● Unmanned Aerial Vehicles (UAVs)

● Ground Vehicles

● Naval Platforms

By End-User

● Military

● Air Force

● Navy

● Others

By Application

● Anti-Aircraft

● Anti-Ship

● Anti-Tank

● Surface-to-Surface

● Precision Strikes

● Training Simulators

● Others

Key Developments

● In January 2024, the US Department of Defense (DoD) requested a US$ 315.0 billion budget for FY 2024, allocating US$ 15.1 billion to Large Lot Procurement (LLP) for precision-guided missile systems. This funding supports programs like RIM-174 SM-6, AIM-120D AMRAAM and AGM-158C LRASM, aimed at enhancing missile capabilities and production efficiency.

● In January 2024, the DoD introduced an expanded Multiyear Procurement (MYP) strategy for precision-guided munitions, integrating Economic Order Quantities (EOQ) to optimize production and delivery schedules. The initiative covers four key missile systems, improving manufacturing capacity and reducing unit costs to meet growing defense needs.

Why Purchase the Report?

● To visualize the precision-guided munitions market segmentation based on type, guidance system, platform, end-user and application, as well as understand key commercial assets and players.

● Identify commercial opportunities by analyzing trends and co-development.

● Excel data sheet with numerous data points of the precision-guided munitions market with all segments.

● PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.

● Product mapping available as excel consisting of key products of all the major players.

The US precision-guided munitions market report would provide approximately 45 tables, 45 figures and 201 pages.

Target Audience 2024
• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies