Saudi Arabia Defense Market

Saudi Arabia Defense Market, worth USD 58 Bn, focuses on localization to 50% by 2030, with key drivers including increased spending and technological advancements.

Region:Middle East

Author(s):Shubham

Product Code:KRAB0565

Pages:90

Published On:August 2025

About the Report

Base Year 2024

Saudi Arabia Defense Market Overview

  • The Saudi Arabia Defense Market is valued at approximately USD 58 billion, based on a five-year historical analysis. Growth is primarily driven by the country’s sustained focus on force modernization, regional security dynamics, and continuous investment in defense infrastructure and indigenous capacity-building under Vision 2030.
  • Key hubs include Riyadh, Jeddah, and Dhahran due to their strategic roles: Riyadh as the center for defense governance and procurement; Jeddah’s proximity to Western Fleet support and logistics; and Dhahran’s concentration of air bases and Eastern Province military-industrial activity.
  • In 2023, Saudi authorities advanced procurement reforms emphasizing streamlined acquisition, local production, and technology transfer—implemented through the regulator’s policies and Vision 2030, which targets 50 percent localization of defense spending by the end of the decade and has achieved about 19 percent localization by late 2023.
Saudi Arabia Defense Market Size

Saudi Arabia Defense Market Segmentation

By Type:The defense market can be segmented into various types, including Land Systems, Air Systems, Naval Systems, Air and Missile Defense, C4ISR, Cyber Defense and Electronic Warfare, Training, Simulation, and MRO, and Munitions and Precision Weapons. Each of these segments plays a crucial role in the overall defense strategy of Saudi Arabia, with specific focus areas based on regional threats and technological advancements.

Saudi Arabia Defense Market segmentation by Type.

By End-User:The end-user segmentation includes various government entities such as the Ministry of Defense, Ministry of National Guard, Ministry of Interior, Presidency of State Security, and the General Authority for Military Industries (GAMI) and SAMI-affiliated entities. Each of these end-users has distinct requirements and priorities, influencing their procurement strategies and the types of defense systems they invest in.

Saudi Arabia Defense Market segmentation by End-User.

Saudi Arabia Defense Market Competitive Landscape

The Saudi Arabia Defense Market is characterized by a dynamic mix of regional and international players. Leading participants such as Saudi Arabian Military Industries (SAMI), General Authority for Military Industries (GAMI), Lockheed Martin Corporation, The Boeing Company (Boeing Defense, Space & Security), Raytheon (RTX Corporation), Northrop Grumman Corporation, BAE Systems plc, Thales Group, Airbus Defence and Space, Leonardo S.p.A., L3Harris Technologies, Inc., General Dynamics Corporation, Rheinmetall AG, Elbit Systems Ltd., Turkish Aerospace Industries (TAI), EDGE Group (UAE), Navantia S.A., Denel SOC Ltd. contribute to innovation, geographic expansion, and service delivery in this space.

Saudi Arabian Military Industries (SAMI)

2017

Riyadh, Saudi Arabia

Lockheed Martin Corporation

1912

Bethesda, Maryland, USA

The Boeing Company (Boeing Defense, Space & Security)

1916

Chicago, Illinois, USA

Raytheon (RTX Corporation)

1922

Arlington, Virginia, USA

Northrop Grumman Corporation

1939

Falls Church, Virginia, USA

Company

Establishment Year

Headquarters

Saudi Footprint Scale (local workforce, facilities, JV count)

Revenue Exposure to Saudi Market (% of global revenue)

Contract Backlog in KSA (USD, years of coverage)

Localization KPI (share of production/services localized)

Technology Transfer Depth (licensing, co-dev, IP access score)

Portfolio Breadth in KSA (land/air/naval/C4ISR/cyber coverage)

Saudi Arabia Defense Market Industry Analysis

Growth Drivers

  • Increased Defense Spending:Saudi Arabia's defense budget for the future is projected to reach approximately $61 billion, reflecting a significant increase from $54 billion in the previous period. This rise is driven by the Kingdom's commitment to enhancing its military capabilities amid regional tensions. The government aims to allocate around 8% of its GDP to defense, underscoring the prioritization of national security and military modernization initiatives, which are crucial for maintaining stability in the region.
  • Regional Security Concerns:The ongoing geopolitical tensions in the Middle East, particularly with Iran and conflicts in Yemen, have heightened security concerns for Saudi Arabia. In the future, the Kingdom is expected to invest over $10 billion in advanced missile defense systems to counter potential threats. This focus on regional security drives demand for sophisticated defense technologies and capabilities, reinforcing the need for a robust military infrastructure to safeguard national interests.
  • Technological Advancements:The Saudi defense sector is increasingly embracing technological innovations, with an estimated $5 billion earmarked for research and development in the future. Investments in artificial intelligence, drones, and cybersecurity are pivotal for modernizing the military. The Kingdom's Vision 2030 initiative emphasizes localizing defense production, aiming for 50% of military equipment to be sourced domestically, thereby fostering innovation and reducing reliance on foreign suppliers.

Market Challenges

  • Geopolitical Instability:The persistent geopolitical instability in the Middle East poses significant challenges for the Saudi defense market. Ongoing conflicts and tensions can disrupt supply chains and deter foreign investments. In the future, the region is expected to witness increased military expenditures, but the uncertainty surrounding political alliances and conflicts may hinder long-term strategic planning and investment in defense capabilities.
  • Budget Constraints:Despite increased defense spending, Saudi Arabia faces budgetary pressures due to fluctuating oil prices and economic diversification efforts. The government aims to balance its budget in the future, which may limit the extent of defense investments. With oil revenues projected to stabilize around $70 per barrel, the Kingdom must carefully allocate resources to ensure sustainable growth in defense spending without compromising other critical sectors.

Saudi Arabia Defense Market Future Outlook

The Saudi Arabia defense market is poised for significant transformation as the Kingdom continues to prioritize military modernization and technological advancements. With a focus on local manufacturing and strategic partnerships, the defense sector is expected to evolve rapidly. The integration of advanced technologies, such as artificial intelligence and cybersecurity measures, will enhance operational capabilities. Furthermore, the ongoing geopolitical landscape will necessitate adaptive strategies, ensuring that Saudi Arabia remains resilient and prepared to address emerging security challenges effectively.

Market Opportunities

  • Defense Modernization Programs:The Kingdom's commitment to modernizing its military infrastructure presents substantial opportunities for defense contractors. With an estimated $20 billion allocated for modernization initiatives in the future, companies specializing in advanced weaponry and systems integration stand to benefit significantly from government contracts and partnerships.
  • Local Manufacturing Initiatives:Saudi Arabia's Vision 2030 emphasizes localizing defense production, creating opportunities for domestic and international firms. The government aims to increase local content in defense procurement to 50% in the future, fostering partnerships with global defense manufacturers. This initiative is expected to generate approximately $10 billion in investments in local manufacturing capabilities in the future.

Scope of the Report

SegmentSub-Segments
By Type

Land Systems (armored vehicles, artillery, air defense missiles)

Air Systems (fighter aircraft, helicopters, UAVs)

Naval Systems (surface combatants, patrol vessels, submarines support)

Air and Missile Defense (Patriot, THAAD, SHORAD)

C4ISR (command, control, communications, computers, intelligence, surveillance, reconnaissance)

Cyber Defense and Electronic Warfare

Training, Simulation, and MRO

Munitions and Precision Weapons

By End-User

Ministry of Defense (Royal Saudi Land, Air, Navy, and Strategic Missile Forces)

Ministry of National Guard

Ministry of Interior (Border Guard, Special Security Forces)

Presidency of State Security

General Authority for Military Industries (GAMI) and SAMI-affiliated entities

By Application

Conventional Warfare and Deterrence

Border Security and Counter?UAS

Maritime Security and Critical Infrastructure Protection

Training, Readiness, and Logistics Support

Homeland Security and Counter?Terrorism

By Procurement Type

Foreign Military Sales (FMS) and Direct Commercial Sales (DCS)

Localized Production and Licensed Manufacturing

Joint Ventures and Offset Programs

Maintenance, Repair, and Overhaul (MRO) Contracts

By Technology

Unmanned Systems (UAVs/UGVs/USVs)

Missile Defense Systems

Cybersecurity and Secure Communications

Sensors, Radars, and EO/IR

AI, Data Links, and Electronic Warfare

By Funding Source

Central Government Budget

Sovereign Funds and Specialized Programs

International Financing and Export Credit

By Policy Support

Vision 2030 Localization and Offset Policies

GAMI Licensing and Industrial Participation

R&D Incentives and Technology Transfer Programs

Key Target Audience

Investors and Venture Capitalist Firms

Government and Regulatory Bodies (e.g., Ministry of Defense, General Authority for Military Industries)

Defense Contractors and Suppliers

Military and Defense Agencies

Security and Defense Technology Firms

International Defense Organizations

Logistics and Supply Chain Companies

Financial Institutions and Investment Banks

Players Mentioned in the Report:

Saudi Arabian Military Industries (SAMI)

General Authority for Military Industries (GAMI)

Lockheed Martin Corporation

The Boeing Company (Boeing Defense, Space & Security)

Raytheon (RTX Corporation)

Northrop Grumman Corporation

BAE Systems plc

Thales Group

Airbus Defence and Space

Leonardo S.p.A.

L3Harris Technologies, Inc.

General Dynamics Corporation

Rheinmetall AG

Elbit Systems Ltd.

Turkish Aerospace Industries (TAI)

EDGE Group (UAE)

Navantia S.A.

Denel SOC Ltd.

Table of Contents

Market Assessment Phase

1. Executive Summary and Approach


2. Saudi Arabia Defense Market Overview

2.1 Key Insights and Strategic Recommendations

2.2 Saudi Arabia Defense Market Overview

2.3 Definition and Scope

2.4 Evolution of Market Ecosystem

2.5 Timeline of Key Regulatory Milestones

2.6 Value Chain & Stakeholder Mapping

2.7 Business Cycle Analysis

2.8 Policy & Incentive Landscape


3. Saudi Arabia Defense Market Analysis

3.1 Growth Drivers

3.1.1 Increased Defense Spending
3.1.2 Regional Security Concerns
3.1.3 Technological Advancements
3.1.4 Strategic Partnerships

3.2 Market Challenges

3.2.1 Geopolitical Instability
3.2.2 Budget Constraints
3.2.3 Supply Chain Disruptions
3.2.4 Regulatory Hurdles

3.3 Market Opportunities

3.3.1 Defense Modernization Programs
3.3.2 Local Manufacturing Initiatives
3.3.3 Cybersecurity Investments
3.3.4 International Collaborations

3.4 Market Trends

3.4.1 Shift Towards Asymmetric Warfare
3.4.2 Increased Focus on Cyber Defense
3.4.3 Adoption of AI and Automation
3.4.4 Growth in Defense Exports

3.5 Government Regulation

3.5.1 Defense Procurement Law
3.5.2 Foreign Military Sales Regulations
3.5.3 Local Content Requirements
3.5.4 Export Control Laws

4. SWOT Analysis


5. Stakeholder Analysis


6. Porter's Five Forces Analysis


7. Saudi Arabia Defense Market Market Size, 2019-2024

7.1 By Value

7.2 By Volume

7.3 By Average Selling Price


8. Saudi Arabia Defense Market Segmentation

8.1 By Type

8.1.1 Land Systems (armored vehicles, artillery, air defense missiles)
8.1.2 Air Systems (fighter aircraft, helicopters, UAVs)
8.1.3 Naval Systems (surface combatants, patrol vessels, submarines support)
8.1.4 Air and Missile Defense (Patriot, THAAD, SHORAD)
8.1.5 C4ISR (command, control, communications, computers, intelligence, surveillance, reconnaissance)
8.1.6 Cyber Defense and Electronic Warfare
8.1.7 Training, Simulation, and MRO
8.1.8 Munitions and Precision Weapons

8.2 By End-User

8.2.1 Ministry of Defense (Royal Saudi Land, Air, Navy, and Strategic Missile Forces)
8.2.2 Ministry of National Guard
8.2.3 Ministry of Interior (Border Guard, Special Security Forces)
8.2.4 Presidency of State Security
8.2.5 General Authority for Military Industries (GAMI) and SAMI-affiliated entities

8.3 By Application

8.3.1 Conventional Warfare and Deterrence
8.3.2 Border Security and Counter?UAS
8.3.3 Maritime Security and Critical Infrastructure Protection
8.3.4 Training, Readiness, and Logistics Support
8.3.5 Homeland Security and Counter?Terrorism

8.4 By Procurement Type

8.4.1 Foreign Military Sales (FMS) and Direct Commercial Sales (DCS)
8.4.2 Localized Production and Licensed Manufacturing
8.4.3 Joint Ventures and Offset Programs
8.4.4 Maintenance, Repair, and Overhaul (MRO) Contracts

8.5 By Technology

8.5.1 Unmanned Systems (UAVs/UGVs/USVs)
8.5.2 Missile Defense Systems
8.5.3 Cybersecurity and Secure Communications
8.5.4 Sensors, Radars, and EO/IR
8.5.5 AI, Data Links, and Electronic Warfare

8.6 By Funding Source

8.6.1 Central Government Budget
8.6.2 Sovereign Funds and Specialized Programs
8.6.3 International Financing and Export Credit

8.7 By Policy Support

8.7.1 Vision 2030 Localization and Offset Policies
8.7.2 GAMI Licensing and Industrial Participation
8.7.3 R&D Incentives and Technology Transfer Programs

9. Saudi Arabia Defense Market Competitive Analysis

9.1 Market Share of Key Players

9.2 Cross Comparison of Key Players

9.2.1 Company Name
9.2.2 Saudi Footprint Scale (local workforce, facilities, JV count)
9.2.3 Revenue Exposure to Saudi Market (% of global revenue)
9.2.4 Contract Backlog in KSA (USD, years of coverage)
9.2.5 Localization KPI (share of production/services localized)
9.2.6 Technology Transfer Depth (licensing, co-dev, IP access score)
9.2.7 Portfolio Breadth in KSA (land/air/naval/C4ISR/cyber coverage)
9.2.8 Program Delivery Performance (on-time delivery rate)
9.2.9 Aftermarket & MRO Penetration (MRO revenue share in KSA)
9.2.10 Strategic Partnerships Strength (MoUs/JVs with SAMI, GAMI approvals)
9.2.11 Compliance & Offset Performance (offset fulfillment rate)
9.2.12 R&D and Training Investment in KSA (annual spend, trainees)

9.3 SWOT Analysis of Top Players

9.4 Pricing Analysis

9.5 Detailed Profile of Major Companies

9.5.1 Saudi Arabian Military Industries (SAMI)
9.5.2 General Authority for Military Industries (GAMI)
9.5.3 Lockheed Martin Corporation
9.5.4 The Boeing Company (Boeing Defense, Space & Security)
9.5.5 Raytheon (RTX Corporation)
9.5.6 Northrop Grumman Corporation
9.5.7 BAE Systems plc
9.5.8 Thales Group
9.5.9 Airbus Defence and Space
9.5.10 Leonardo S.p.A.
9.5.11 L3Harris Technologies, Inc.
9.5.12 General Dynamics Corporation
9.5.13 Rheinmetall AG
9.5.14 Elbit Systems Ltd.
9.5.15 Turkish Aerospace Industries (TAI)
9.5.16 EDGE Group (UAE)
9.5.17 Navantia S.A.
9.5.18 Denel SOC Ltd.

10. Saudi Arabia Defense Market End-User Analysis

10.1 Procurement Behavior of Key Ministries

10.1.1 Ministry of Defense Procurement Trends
10.1.2 Ministry of Interior Procurement Strategies
10.1.3 Budget Allocation Patterns

10.2 Corporate Spend on Infrastructure & Energy

10.2.1 Investment in Defense Infrastructure
10.2.2 Spending on Energy Security
10.2.3 Budgeting for Technological Upgrades

10.3 Pain Point Analysis by End-User Category

10.3.1 Challenges Faced by the Ministry of Defense
10.3.2 Issues in Supply Chain Management
10.3.3 Budget Constraints in Defense Spending

10.4 User Readiness for Adoption

10.4.1 Training and Skill Development Needs
10.4.2 Technology Adoption Barriers
10.4.3 User Acceptance of New Systems

10.5 Post-Deployment ROI and Use Case Expansion

10.5.1 Evaluation of Defense Investments
10.5.2 Expansion of Use Cases in Defense
10.5.3 Long-term Benefits of Defense Technologies

11. Saudi Arabia Defense Market Future Size, 2025-2030

11.1 By Value

11.2 By Volume

11.3 By Average Selling Price


Go-To-Market Strategy Phase

1. Whitespace Analysis + Business Model Canvas

1.1 Identification of Market Gaps

1.2 Business Model Framework


2. Marketing and Positioning Recommendations

2.1 Branding Strategies

2.2 Product USPs


3. Distribution Plan

3.1 Urban Retail Strategies

3.2 Rural NGO Tie-ups


4. Channel & Pricing Gaps

4.1 Underserved Routes

4.2 Pricing Bands


5. Unmet Demand & Latent Needs

5.1 Category Gaps

5.2 Consumer Segments


6. Customer Relationship

6.1 Loyalty Programs

6.2 After-sales Service


7. Value Proposition

7.1 Sustainability Initiatives

7.2 Integrated Supply Chains


8. Key Activities

8.1 Regulatory Compliance

8.2 Branding Efforts

8.3 Distribution Setup


9. Entry Strategy Evaluation

9.1 Domestic Market Entry Strategy

9.1.1 Product Mix Considerations
9.1.2 Pricing Band Analysis
9.1.3 Packaging Strategies

9.2 Export Entry Strategy

9.2.1 Target Countries
9.2.2 Compliance Roadmap

10. Entry Mode Assessment

10.1 Joint Ventures

10.2 Greenfield Investments

10.3 Mergers & Acquisitions

10.4 Distributor Model


11. Capital and Timeline Estimation

11.1 Capital Requirements

11.2 Timelines for Market Entry


12. Control vs Risk Trade-Off

12.1 Ownership vs Partnerships


13. Profitability Outlook

13.1 Breakeven Analysis

13.2 Long-term Sustainability


14. Potential Partner List

14.1 Distributors

14.2 Joint Ventures

14.3 Acquisition Targets


15. Execution Roadmap

15.1 Phased Plan for Market Entry

15.1.1 Market Setup
15.1.2 Market Entry
15.1.3 Growth Acceleration
15.1.4 Scale & Stabilize

15.2 Key Activities and Milestones

15.2.1 Milestone Planning
15.2.2 Activity Tracking

Research Methodology

ApproachModellingSample

Phase 1: Approach1

Desk Research

  • Analysis of defense spending reports from the Saudi Arabian Ministry of Defense
  • Review of industry publications and white papers on defense procurement trends
  • Examination of geopolitical analyses affecting defense budgets and priorities

Primary Research

  • Interviews with defense procurement officials within the Saudi government
  • Surveys with executives from leading defense contractors operating in Saudi Arabia
  • Field interviews with military personnel to understand operational needs and gaps

Validation & Triangulation

  • Cross-validation of findings with multiple data sources, including government and industry reports
  • Triangulation of qualitative insights from interviews with quantitative data from market reports
  • Sanity checks through expert panel reviews comprising defense analysts and economists

Phase 2: Market Size Estimation1

Top-down Assessment

  • Estimation of total defense expenditure based on historical budget allocations
  • Segmentation of spending by military branches and defense categories (e.g., land, air, naval)
  • Incorporation of projected increases in defense spending due to regional security dynamics

Bottom-up Modeling

  • Analysis of contract values from major defense procurement projects
  • Estimation of market size based on unit costs of defense equipment and services
  • Volume estimates derived from historical procurement data and future military needs assessments

Forecasting & Scenario Analysis

  • Multi-factor regression analysis incorporating economic indicators and regional security threats
  • Scenario modeling based on potential shifts in defense policy and international relations
  • Baseline, optimistic, and pessimistic projections for defense spending through 2030

Phase 3: CATI Sample Composition1

Scope Item/SegmentSample SizeTarget Respondent Profiles
Land Forces Procurement100Procurement Officers, Military Strategists
Aerospace and Defense Technology80R&D Managers, Aerospace Engineers
Naval Defense Systems70Naval Commanders, Defense Analysts
Cybersecurity in Defense60IT Security Managers, Cyber Defense Experts
Logistics and Supply Chain in Defense90Logistics Coordinators, Supply Chain Managers

Frequently Asked Questions

What is the current value of the Saudi Arabia Defense Market?

The Saudi Arabia Defense Market is valued at approximately USD 58 billion, driven by ongoing force modernization, regional security dynamics, and significant investments in defense infrastructure as part of the Vision 2030 initiative.

What are the key drivers of growth in the Saudi Arabia Defense Market?

Which cities are the main hubs for the Saudi Arabia Defense Market?

What is the localization target for defense spending in Saudi Arabia?

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