According to Fortune Business Insights™, the global underwater warfare market size was valued at USD 14.70 billion in 2024 and is projected to grow from USD 15.68 billion in 2025 to USD 25.63 billion by 2032, exhibiting a CAGR of 7.3% during the forecast period. North America led the market in 2024, holding 41.5% of the global share, fueled by robust naval modernization programs and defense budgets.
The underwater warfare market is a vital component of global defense strategy, focusing on advanced technologies and platforms used in subsurface combat and security operations. This includes submarines, sonar systems, Autonomous and Unmanned Underwater Vehicles (AUVs and UUVs), torpedoes, and underwater communication and surveillance systems. The sector is witnessing strong demand amid increasing maritime threats, geopolitical conflicts, and innovations in AI and automation.
Key Players in the Underwater Warfare Market
-
Lockheed Martin Corporation (U.S.)
-
BAE Systems (U.K.)
-
Northrop Grumman (U.S.)
-
Thales (France)
-
RTX (U.S.)
-
Saab AB (Sweden)
-
L3Harris Technologies, Inc. (U.S.)
-
KONGSBERG (Norway)
-
General Dynamics Corporation (U.S.)
-
Elbit Systems Ltd. (Israel)
-
Raytheon Technologies (U.S.)
Source:
https://www.fortunebusinessinsights.com/underwater-warfare-market-110748
Market Segmentation
By Platform
In 2024, submarines dominated the underwater warfare market and are expected to remain the leading platform through 2032. Their strategic importance, combined with stealth capabilities and integration with advanced combat and surveillance systems, makes them indispensable to modern naval forces. Ongoing technological upgrades, such as improvements in nuclear propulsion and acoustic signature reduction, are further enhancing their operational effectiveness and survivability in contested environments. Other key platforms in the market include surface ships and naval helicopters, which continue to play supportive and tactical roles in underwater defense operations.
By System
The sonar systems segment led the market in 2024 and is projected to retain its dominance over the forecast period. This growth is driven by the integration of artificial intelligence, machine learning, and advanced signal processing technologies, significantly improving underwater detection, tracking, and Anti-Submarine Warfare (ASW) capabilities. These innovations make sonar systems essential for real-time underwater surveillance and threat identification. Additional system segments contributing to market growth include communications, electronic warfare, weapons, and unmanned systems, each playing a critical role in expanding the scope and functionality of underwater combat systems.
By End User
The naval segment held the largest share of the market in 2024 and is anticipated to maintain its leadership through 2032. The growing need for cutting-edge underwater defense technologies among global navies is a key driver for this segment. Enhanced investments in Unmanned Underwater Vehicles (UUVs), Autonomous Underwater Vehicles (AUVs), and sonar detection systems are elevating the efficiency and responsiveness of naval missions. These advancements are allowing naval forces to expand their operational capabilities in surveillance, reconnaissance, and combat, cementing the segment’s dominant position in the underwater warfare market.
Market Dynamics
Market Drivers
A key driver of the underwater warfare market is the rising investment in underwater robotics, particularly Unmanned Underwater Vehicles (UUVs) and Autonomous Underwater Vehicles (AUVs). These systems are enhancing the efficiency and scope of underwater missions, including mine detection, surveillance, and reconnaissance. Additionally, escalating geopolitical tensions and maritime disputes—especially in the Indo-Pacific region—are fueling military modernization and pushing demand for advanced undersea warfare systems.
Market Restraints
Despite growing demand, the adoption of underwater warfare systems is limited by technological complexity and high associated costs. The development and integration of cutting-edge systems require substantial R&D investments and highly specialized expertise, making them accessible only to nations and defense companies with strong financial capabilities.
Market Challenges
The high costs of research, development, and deployment pose a major challenge to market growth. Advanced technologies such as next-generation submarines and sonar systems involve significant investment and lengthy development timelines. Moreover, cybersecurity vulnerabilities and compatibility issues with legacy naval infrastructure present additional risks during system integration and operational deployment.
Market Opportunities
Shifting naval strategies emphasizing maritime dominance and autonomous capabilities are creating new opportunities for the underwater warfare sector. The increasing integration of artificial intelligence in sonar detection, stealth, navigation, and communication systems is transforming underwater defense. As AI-powered platforms become more prevalent, they are expected to drive operational efficiency and strategic advantage, offering substantial growth potential for industry players.
Key Market Trends
-
Growing demand for AI-driven sonar and sensor systems
-
Integration of stealth technologies in submarines and unmanned systems
-
Increasing focus on multi-domain operations and cross-platform interoperability
-
Collaborative defense R&D initiatives among NATO and allied forces
Regional Insights
North America
North America will continue leading the global underwater warfare market, supported by the U.S. Navy’s modernization of submarines, sonar, and unmanned underwater fleets. Partnerships among defense contractors and military agencies are advancing innovations in undersea capabilities.
Europe
Europe is witnessing strong growth, driven by rising defense budgets, modernization of submarine fleets, and a focus on protecting maritime assets from evolving threats. The presence of key industry players and EU naval projects supports the region’s strength.
Asia Pacific
Asia Pacific is projected to experience the fastest growth through 2032. Rising naval tensions in the South China Sea and increasing investments by China, India, and Japan in undersea defense technologies are fueling market expansion.
Rest of the World
The Middle East & Africa and Latin America are emerging markets, with investments in maritime security, port infrastructure, and coastal defense systems. These regions are adopting underwater warfare technologies at a moderate pace, influenced by regional conflicts and maritime sovereignty needs.
Russia-Ukraine War Impact
The ongoing conflict has accelerated global investments in unmanned underwater vehicles and smart weapon systems. Ukraine’s deployment of UMVs like the Magura V5 has shown the effectiveness of unmanned maritime systems in real-time naval combat, prompting broader defense adoption worldwide.
Competitive Landscape
The underwater warfare market is highly competitive and innovation-driven. Major players are focusing on:
-
Collaborations with defense ministries
-
Expansion of sonar and unmanned system portfolios
-
Development of stealth and acoustic signature reduction technologies
-
Enhancing underwater surveillance and combat readiness
Recent Industry Developments
-
April 2025 – Thales Australia integrated its BlueSentry sonar into Saildrone’s USV, demonstrating enhanced operational capability in a long-range mission off the U.S. coast.
-
March 2025 – Thales delivered a suite of high-performance sonar systems for the Royal Netherlands Navy’s next-generation submarines, ensuring improved acoustic awareness and mission superiority.
Report Coverage
This report offers an in-depth analysis of the underwater warfare market. It provides insights into:
-
Market size and forecast from 2025 to 2032
-
Segment-wise performance by platform, system, and end user
-
Regional market trends and geopolitical impacts
-
Competitive strategies, company profiles, and recent developments
-
Key growth drivers, restraints, and challenges affecting the market
