UK Close-in Weapon System (CIWS) Upgrade Market Size, Share, Trends and Forecasts 2031

Key Findings

• The UK Close-in Weapon System (CIWS) Upgrade Market is witnessing accelerated demand as navies prioritize layered defense against increasingly sophisticated anti-ship missiles, unmanned aerial systems, and asymmetric threats.

• Legacy System Modernization And Life-Extension: Many navies are upgrading established CIWS platforms (sensor suites, fire-control, and effectors) to extend service life, improve mean-time-between-failures (MTBF), and reduce total lifecycle cost through modular retrofit kits and software updates.

• Integration With Multi-Layered Air Defense Architectures: Upgrades are focused on seamless integration with shipboard radars, combat management systems (CMS), and networked sensors to enable automatic cueing, cooperative engagement, and faster kill-chains against saturation attacks.

• Transition Toward Multi-Sensor And Multi-Effect Solutions: Programs increasingly combine radar, electro-optical/infrared (EO/IR), and passive RF sensors with kinetic guns, missiles, and directed-energy systems to create flexible, tiered short-range defense.

• Rising Role Of Directed Energy And Counter-UAS Capabilities: Experimental and initial operational upgrades now include directed-energy weapon (DEW) integration studies and counter-UAS packages (jammer + interceptor) to supplement kinetic interceptors and lower cost-per-engagement.

• Procurement And Geopolitical Drivers: Regional naval buildups, refurbishment of aging fleets, export-driven upgrade contracts, and defense budget reallocation toward force-protection systems are strengthening the upgrade pipeline in UK.

UK Close-in Weapon System (CIWS) Upgrade Market Size and Forecast

The UK Close-in Weapon System (CIWS) Upgrade Market is estimated to expand from USD 1.2 billion in 2025 to USD 2.7 billion by 2031, registering a CAGR of 13.8% during the forecast period. Growth is underpinned by retrofit projects on legacy Phalanx, Goalkeeper, Kashtan, AK-630, and Gepard systems, new-build platforms opting for modular, upgradeable CIWS architectures, and the growing need for counter-UAS and asymmetric-threat mitigation capabilities. Spending is split across hardware (sensors, guns, missiles, DEW integration), software (fire control, CMS integration, data fusion), services (installation, testing, maintenance), and R&D (directed-energy trials, advanced sensor fusion). Increasing emphasis on networked defense—where CIWS acts as the last engagement layer—plus opportunities for domestic production and offset arrangements in UK are enlarging contract sizes and multi-year modernization programs.

Introduction

Close-in Weapon Systems (CIWS) are rapid-response shipboard defenses designed to detect, track, and neutralize incoming threats at short ranges, typically ranging from fast sea-skimming anti-ship missiles to small surface craft and unmanned aerial systems. CIWS upgrades encompass improvements to radar and EO/IR sensors, fire control algorithms, ammunition types, auxiliary interceptors (short-range missiles), power and cooling upgrades for high-rate fire, and integration of non-kinetic effects such as high-energy lasers or electronic warfare modules. In UK, the CIWS upgrade market is shaped by navies seeking to maintain credible point-defense capability while keeping pace with evolving threats, extending platform service lives, and aligning with broader fleet modernization roadmaps. Retrofit solutions that minimize shipyard time, adopt open architecture interfaces, and provide incremental capability growth are particularly attractive to defense planners balancing budget constraints with urgent operational requirements.

Future Outlook

By 2031, UK CIWS upgrade activities will shift from purely reactive refurbishments toward forward-looking, modular defensive ecosystems that can accommodate mid-life insertions such as directed-energy effectors, modular missile interceptors, and advanced AI-driven target discrimination engines. The rise of swarm UAS and low-observable anti-ship missiles will drive investments in high-fidelity sensor fusion and multi-sensor correlation to reduce false positives and improve engagement confidence. Procurement strategies will increasingly favor upgradeable open-architecture CIWS kits and common interface standards that allow navies to mix and match kinetic and non-kinetic effectors based on mission profiles. Industrial collaboration—between prime contractors, national shipyards, and local suppliers—will expand, supported by offset clauses and technology transfer, accelerating regional upgrade programs. Overall, CIWS upgrades will evolve to become an essential, continuously refreshable layer within an integrated maritime air-defense posture in UK.

UK CIWS Upgrade Market Trends

• Sensor Fusion And AI-Enhanced Fire Control
  Navies in UK are investing in multi-sensor fusion upgrades that combine X-band radars, Ku/Ka supplementary radars, EO/IR trackers, and passive RF detectors to provide robust, redundant target tracks even in ECM-dense environments. AI and machine-learning models are being incorporated into fire-control loops to improve track continuity, reduce reaction times, and filter decoys and clutter, thereby increasing probability of kill (Pk) against agile, sea-skimming threats. These upgrades emphasize software-defined processing that can be patched and tuned in theater, reducing the need for major hardware overhauls. Vendors are offering modular processors and standardized APIs to enable third-party analytics and accelerated algorithm deployment. The net effect is that upgraded CIWS become smarter with time as databases expand and algorithms improve through operational feedback.

• Hybrid Kinetic and Non-Kinetic Effectors
  There is a marked trend toward combining traditional rapid-fire gun interceptors with short-range missiles and directed-energy systems in upgrade packages to provide layered short-range defense with flexible cost-per-shot profiles. Missile add-ons provide extended engagement envelopes and higher lethality against maneuvering targets, while DEWs offer low-cost engagement against small UAS and disrupted seeker heads. Upgrades commonly include launcher hardpoints, power and cooling enhancements, and combat management integration so the ship can dynamically choose the most appropriate effector. This hybridization reduces reliance on expensive interceptor ammunition for every engagement and introduces graduated response options for proportional escalation. Field trials in UK are increasingly validating mixed-effect suites for high-traffic littoral operations.

• Counter-UAS and Swarm Defense Capabilities
  The proliferation of small, low-cost unmanned systems has pushed navies in UK to prioritize CIWS upgrades with specialized counter-UAS (C-UAS) features such as waveform libraries for small-radar cross-section targets, RF detection and jamming payload interfaces, and precision dispensers for kinetic interceptors designed for small targets. Software updates enable rapid re-tasking toward small-target engagement modes and track correlation across multiple sensors to defeat swarming tactics. Many upgrade roadmaps now include autonomous engagement chains for low-value, high-volume targets to minimize operator workload. Asymmetric littoral threats make C-UAS capability a near-term procurement priority across coastal and expeditionary fleets in UK.

• Open Architecture And Modular Retrofit Kits
  Upgrades increasingly emphasize open systems architectures (OSA) to facilitate rapid insertion of new capabilities and to avoid vendor lock-in, allowing navies in UK to source best-of-breed sensors, processors, and effectors. Modular retrofit kits that fit existing mounting footprints and interface with legacy power and data buses reduce dry-dock time and cost. Standards-based interfaces for CMS integration allow upgrades to plug into existing combat systems with minimal custom coding. This trend lowers total cost of ownership by enabling incremental modernization rather than complete platform replacements, and it supports local industry participation through modular supply chains.

• Directed Energy Trials And Incremental DEW Integration
  Field experiments and prototype integrations of directed-energy weapons into CIWS upgrade roadmaps are accelerating in UK, initially for soft-kill roles against drones and sensor degradation of incoming seekers. Upgrades include power conditioning modules, thermal management upgrades, beam control software, and safety interlocks to permit staged fielding. While full operational DEW CIWS remains at varying maturity levels, many programs plan phased integration—starting with high-power microwave or dazzler attachments and advancing toward higher-energy continuous beams as shipboard power and cooling allow. This phased approach enables navies to gain operational experience and develop doctrine for DEW employment within the CIWS envelope.

Market Growth Drivers

• Escalating Missile Threats And Proliferation Of Advanced Anti-Ship Weapons
  The continued development and spread of supersonic, sea-skimming anti-ship missiles, tandem seeker architectures, and low-observable designs have increased the urgency for CIWS modernization in UK. Upgrades that shorten reaction chains, increase intercept reliability, and integrate real-time threat libraries are being prioritized to maintain ship survivability in contested littoral zones. This threat driver is a principal justification for budget allocations toward CIWS retrofit programs across both blue-water and coastal navies.

• Fleet Modernization And Life-Extension Programs
  A large portion of the in-service fleet in UK comprises platforms due for mid-life upgrades rather than replacement, creating strong demand for CIWS upgrade kits that can be installed at reduced cost and lead time. Life-extension programs bundle CIWS upgrades with other combat system modernizations to achieve economies of scale across refit cycles. Governments are leveraging these bundled modernization programs to extend platform utility while retaining deterrence capability, fueling steady market growth.

• Policy And Regulatory Emphasis On Force Protection
  National defense policies in UK increasingly recognize force protection and anti-access/area-denial (A2/AD) resilience as strategic priorities, directing capital toward point-defense enhancements like CIWS. Export controls, offset agreements, and local content requirements also shape procurement, encouraging foreign primes to deliver upgrade packages with domestic manufacturing participation. These policy levers create predictable programs of record that sustain supplier pipelines and stimulate further R&D investment.

• Cost Pressures And Cost-Effective Layered Defense Strategies
  Faced with constrained defense budgets, naval authorities in UK favor upgrade options that maximize cost-effectiveness—extending older systems, introducing reusable DEW options, and adding short-range missiles only where necessary. CIWS upgrades that reduce per-engagement costs and improve logistic simplicity (common ammo types, standardized spare parts) receive priority because they enable durable defense postures without the expense of complete system replacements. Economies of scale across multi-ship upgrades also reduce unit costs and accelerate procurement.

• Industry Partnerships, Offsets, And Technology Transfer Agreements
  Prime contractors increasingly form partnerships with local shipyards, system integrators, and defense ministries in UK to win upgrade contracts that include technology transfer and local production. These arrangements enable domestic maintenance, sustainment, and future upgrade iterations without full dependence on foreign suppliers. Such industrial cooperation is a significant growth enabler, expanding available funding pools and increasing political momentum for upgrade programs across regions.

Challenges in the Market

• Integration Complexity With Legacy Combat Management Systems
  Retrofitting modern CIWS sensors and effectors into ships with older combat management systems can require significant interface engineering, middleware development, and validation to ensure safe, deterministic engagement chains. In UK, integration testing and certification cycles can lengthen upgrade timelines and increase program costs, particularly where bespoke interfaces or classified data links are involved. Ensuring flawless CMS-to-CIWS communication under stress conditions remains a persistent technical and programmatic challenge.

• Shipboard Power, Cooling, And Structural Constraints
  High-energy DEW options and additional missile launchers impose increased power draw, cooling loads, and mechanical stress that many legacy hulls were not designed to support. Upgrades must carefully balance capability gains with structural and electrical upgrades that may be costly or technically infeasible on older platforms. In UK, program managers must evaluate whole-of-ship impacts early to avoid mid-program scope creep and parked vessels awaiting further yard work.

• Escalating Complexity Of Threat Environments And Countermeasures
  As adversaries evolve with sophisticated decoys, chaff, electronic countermeasures, and swarm tactics, ensuring that upgraded CIWS maintain high discrimination and resilience is challenging. Attackers may exploit gaps between networked sensors and short-range interceptors, necessitating continuous software updates, signature libraries, and sensor calibration—tasks that require sustained funding and skilled personnel. Keeping upgraded CIWS current against evolving tactics is a long-term sustainment burden.

• Budget Uncertainty And Competing Procurement Priorities
  Defense budgets in UK face competing demands (air power, submarines, cyber, logistics), and CIWS upgrades must compete for limited funds. Program deferrals or scope reductions can interrupt supplier investment cycles and hamper long-term roadmaps, particularly for novel systems like DEW where development and operational testing demand steady financial support. Demonstrating clear cost-benefit and operational necessity is essential to maintain political and fiscal backing.

• Export Controls, Certification, And Sovereignty Constraints
  Cross-border technology transfer and export of advanced CIWS components are tightly regulated, impacting delivery schedules and the scope of local production in UK. Certification to national safety and electromagnetic emissions standards, as well as interoperability with allied forces, adds program complexity. Negotiating offset arrangements and ensuring intellectual property protections can extend procurement timelines and divert engineering focus to compliance rather than capability.

UK Close-in Weapon System (CIWS) Upgrade Market Segmentation

By Upgrade Type

• Sensor And Fire-Control Upgrades (radar, EO/IR, data fusion)

• Effector Upgrades (gun barrels, ammunition types, missile add-ons)

• Directed-Energy Integration Kits (power, beam control, cooling)

• Counter-UAS Packages (RF detection, jamming, small-interceptor integration)

• Software And CMS Integration (AI fire-control, open APIs, middleware)

By Platform

• Surface Combatants (destroyers, frigates)

• Littoral Combat Ships And Corvettes

• Amphibious Ships And Auxiliaries

• Patrol Vessels And Offshore Support Vessels

By Deployment Mode

• Retrofit / Refit Programs

• New-build Integration (design-for-upgrade)

By End-User

• Navies (Blue-water/Coastal)

• Coast Guards and Maritime Security Forces

• Shipyards and Prime Integrators

Leading Key Players

• Raytheon Technologies (Phalanx/Upgrades)

• Leonardo S.p.A.

• Thales Group

• BAE Systems Plc

• Rheinmetall AG

• Kongsberg Defence & Aerospace AS

• Lockheed Martin Corporation

• Saab AB

• Aselsan A.S.

• Hanwha Defense (and other regional system integrators)

Recent Developments

• Raytheon Technologies announced incremental upgrade kits for Phalanx systems in UK, focusing on next-gen sensor processing and reduced crew workload for faster autonomous engagement cycles.

• Leonardo S.p.A. secured contracts in UK to retrofit Goalkeeper/Close-in variants with new EO/IR turrets and improved ammunition handling systems for extended service life.

• Thales Group delivered CMS integration packages enabling cooperative engagement between CIWS installations and medium-range air defense radars for several UK fleet modernization projects.

• BAE Systems completed sea trials of a mixed kinetic/non-kinetic CIWS upgrade in UK that demonstrated combined missile/gun engagement sequences and early DEW effectors for small UAS defeat.

• Kongsberg announced an export program in UK to supply short-range missile modules that integrate with existing naval gun-based CIWS, targeting littoral defense markets.

This Market Report Will Answer the Following Questions

1. What is the projected market size and CAGR for the UK CIWS Upgrade Market through 2031?

2. Which upgrade types (sensor, effector, DEW, C-UAS, software) will capture the largest share of retrofit spending in UK?

3. How are navies balancing kinetic versus non-kinetic investments within short-range defense architectures?

4. What integration, power, and structural constraints most commonly limit upgrade scope on legacy platforms?

5. Who are the leading suppliers and local industrial partners shaping CIWS upgrade strategies in UK, and what are their competitive differentiators?