Israel's tens of billion dollar weapons production and export machines

Israel is one of the world's leading arms exporters, with a highly developed defense industry thanks to advanced technology, combat experience and strong government export support policies.

Israel's main export items

Despite being a small country, Israel has a thriving defense industry and is considered one of the most advanced in the world. Based on the needs of a complex security environment, Israel has invested heavily in research and development of military technology.

Israel is not only self-sufficient in most of its defense needs, but is also one of the world's largest arms exporters, with customers ranging from the United States and India to Europe and Asia. Its ability to innovate, combining civilian and military technology, is what helps the Israeli defense industry maintain its competitive edge.

Israel's defense industry is also a driver of economic growth and technological innovation for the country.

In recent years, Israel's annual arms exports have accounted for about 2-3% of its total GDP, reaching $14.8 billion in 2024 (compared to $13 billion in 2023). The Middle Eastern country exports arms to the EU (54% in 2024), the UK, India, Azerbaijan and several Asia-Pacific countries.

Israel's Iron Dome defense system. Photo: BBC

Iron Dome, David's Sling and Arrow missiles are both a national security shield and Israel's main exports to Europe and Asia, reshaping the global arms market. They also include unmanned aerial vehicles (UAVs), radar systems, electronic warfare equipment, surveillance technology and precision-strike missile systems.

In 2024, of the total defense export turnover of 14.8 billion USD, missiles, rockets and air defense systems - including Iron Dome - accounted for 48% of the value compared to 36% in 2023.

Israel's David's Sling air defense system, jointly developed by Rafael Advanced Defense Systems (Israel) and Raytheon (USA), is an important part of Israel's multi-layered missile defense shield.

On the export front, David's Sling will start making its mark in 2023 when Finland signs a contract to purchase the system for around €317 million, marking its first export deal. Many NATO countries and others have expressed interest in the advanced air defense system.

In 2024, Israel's defense budget will increase by 65% ​​to $46.5 billion.

Some of Israel's major arms manufacturers

Elbit Systems Ltd. is one of the largest private defense companies in Israel's defense sector, founded in 1966 and headquartered in Haifa. The company has a market capitalization of $21 billion, up from $12 billion at the end of 2023. Last year, Elbit Systems had a revenue of more than $6.8 billion and a profit of $321 million.

Elbit stands out with its UAV (Hermes) drone products, armored vehicle systems (Sabrah), PULS missile launch systems, electronic warfare systems, navigation systems... According to Investors , by the end of the first quarter of 2024, Elbit had a record total backlog contract value of more than 23 billion USD, with more than 50% expected to be implemented in 2025-2026.

How the Iron Dome system works. Graphics: GN

Israel Aerospace Industries (IAI) is Israel's leading state-owned aerospace and defense company. IAI is known for its high-tech capabilities in the production of UAVs, missile defense systems, radars and satellites. It is one of the world's leading suppliers of UAVs with lines such as the Heron and Harop.

In 2024, IAI sees revenue rising 15.5% to $6.1 billion. Profits rise from $318 million to $493 million. The value of its backlog contracts is expected to reach $25 billion, up from $18 billion at the end of 2023. IAI exports $4.3 billion in 2024, up from $3.8 billion in 2023.

IAI has outstanding products such as the Barak missile defense system, combat UAVs and advanced radar systems...

Rafael Advanced Defense Systems (RADS) is a major Israeli defense company, state-owned. RADS is famous for its air defense systems such as Iron Dome, David's Sling, Trophy and the Iron Beam laser system. Rafael is a world leader in this field.

RADS is not publicly traded. However, Rafael Holdings, Inc. (RFL), a US-based company that owns a stake in RADS' intellectual property, is publicly traded on the NYSE and has a market capitalization of approximately $67 billion.

David's Sling air defense system. Photo: Israeli Ministry of Defense

In 2024, RADS will record revenue of approximately USD 4.8 billion (up 27% compared to 2023), of which approximately 50% will come from exports. Total order inventory will amount to nearly USD 17.8 billion.

RADS is producing a range of air defence systems (Iron Dome), anti-UAV missiles, missiles and tank protection equipment such as Trophy. Rafael also has a joint venture with Raytheon to produce the Tamir missile.

In addition, Israel also has Plasan Sasa Ltd. and Israel Weapon Industries (IWI). These are two leading defense enterprises in Israel, prominent in the field of manufacturing and exporting modern weapons.

Plasan Sasa specializes in manufacturing protective armor for military, civilian and personal vehicles. Its strength is its lightweight yet bulletproof composite material technology, which is equipped for many military vehicles in the US, Israel and NATO.

Meanwhile, IWI is a globally renowned manufacturer of personal weapons, with iconic products such as the Uzi submachine gun, Galil and Tavor rifles.

In recent years, Iron Dome has become a strategic export item thanks to its ability to accurately intercept short-range missiles, proven in many real conflicts. Countries such as the United States, South Korea, Azerbaijan and several NATO countries have expressed interest in or purchased this system.

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