VITA Technology Market Research

This report reviews highlights and developments during the third trading quarter of 2026 and the trends that are driving technology development for VITA technology boards and systems.

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Q3 2026 was characterised by strong and widening demand for VITA-standard embedded computing, driven by rising defense expenditure, record aerospace and defense backlogs, and investment in electronic warfare, air defense, space, autonomy and tactical-edge artificial intelligence. Publicly reporting suppliers generally recorded stronger order intake and backlog than near-term revenue, indicating continued growth potential. However, AI-led demand and memory suppliers’ changing production priorities tightened availability and increased pricing for DRAM, Flash memory, and other critical semiconductor components. These constraints delayed board and system deliveries, increased delinquent backlog and reinforced the importance of forward procurement, alternative sourcing, capacity planning and long-term supply assurance.

Commercial and technical activity continued to shift towards MOSA- and SOSA-aligned platforms. New contract wins for VPX and sensor-processing systems, together with launches across VPX, VME, SpaceVPX, VNX+, QMC, backplanes and rear-transition modules, demonstrated demand for open, scalable and reusable architectures. At the same time, product-status changes and accelerated processor end-of-life announcements reinforced the importance of obsolescence planning, forward procurement and long-term supply assurance.

This report reviews highlights and developments during the second trading quarter of 2026 and the trends that are driving technology development for VITA technology boards and systems.

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2Q 2026 showed a broadly supportive environment for VITA-standard boards and systems, driven by rising defense budgets, record aerospace and defense demand, and growing pressure to expand production capacity across constrained supply chains. U.S. procurement reform, including the launch of Deal Team Six, points to a stronger emphasis on long-term contracting, industrial-base investment, and supplier accountability, while the wider A&D sector continues to benefit from expanding defense backlogs, commercial aircraft demand, and space activity. Publicly reporting VITA product suppliers delivered growth, with annual and Q1 indicators suggesting high-single to low-double-digit market expansion, supported by strong results from Concurrent Technologies, Curtiss-Wright, Kontron, and Mercury Systems. Product activity also remained robust, with new VPX, SpaceVPX, QMC, chassis and backplane introductions highlighting continued movement toward SOSA-aligned, safety-certifiable, high-performance, and AI-enabled embedded computing architectures for defense, aerospace, and mission-critical applications.

This report reviews highlights and developments during the first trading quarter of 2026 and the trends that are driving technology development for VITA technology boards and systems.

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VITA-standard suppliers who have reported annual revenues increased the annual growth trend to 12% for 2025 compared to 2024. This was achieved against a background of delays in order placement due to the extended U.S. government shutdown.

Further potential headwinds in 2026 are arising from supply chain issues due to the lack of availability and rising prices of DRAM and other components required by the embedded industry.

Defense spending continues to grow and the latest SIPRI report claims the volume of major arms transferred between states increased by 9.2 per cent between 2016–20 and 2021–25. Total exports by the United States, increased by 27 per cent including a 217 per cent increase in U.S. arms exports to Europe.

A large number of new VITA standard product announcements were made and for the first time including new VNX+ and QMC solutions. A new VPX-based mission computer, new VPX SBCs, a new VME SBC and new chassis and backplane products were announced in the first quarter of 2026.

This report reviews highlights and developments during the fourth trading quarter of 2025 and the trends that are driving technology development for VITA technology boards and systems.

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A limited number of VITA technology suppliers report quarterly revenues, but the growth trend achieved in Q3 2025 maintains a healthy growth trend. Average revenue growth achieved in Q3 for companies reporting publicly compared to the same period in 2024 was 9%, slightly lower than the year to date. It is not clear whether the lengthy government shutdown had any effect beyond tier one defense contractors or if effects will manifest in Q4 results. The overwhelming picture however is one of increasing demand in spite of constraining political hurdles.

Increasing demand was highlighted by the SIPRI report published this quarter revealing that revenues from the sales of arms and military services by the one hundred largest arms-producing companies rose by 5.9 per cent in 2024, reaching a record $679 billion. Demand was boosted by the wars in Ukraine and Gaza, global and regional geopolitical tensions, and ever-higher military expenditure. For the first time since 2018, all the five largest arms companies increased their arms revenues.

Continuing this theme, VITA member companies have this quarter released details of several new contract wins together with new partnership agreements to enable new business opportunities to be better addressed. A large number of new product announcements were made, many of these announced to coincide with a busy trade show period.

VITA membership experienced remarkable growth over the past year, welcoming 35 new members and seeing 10 former members return. This surge brings VITA’s membership to its highest level since the peak of VMEbus in the 1990s. The renewed momentum is driven by significant activity around emerging standards, sparking fresh interest in solutions for critical embedded computing. VITA continues to lead the way in shaping the future of industry standards.

This report reviews highlights and developments during the third trading quarter of 2025 and the trends that are driving technology development for VITA technology boards and systems.

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First half 2025 results for VITA technology suppliers who publish financial reports continue the strong double-digit growth trend achieved in the first quarter of 2025. Average revenue growth achieved in H1 for companies reporting publicly compared to the same period in 2024 was 11.7%.

A recent study has suggested that the total addressable European defense equipment market in 2024 is estimated to be around $155 billion, representing about 30% of the core defense budget. Since the invasion of Ukraine, equipment spending has increased significantly, as a percentage of core expenditures, mainly due to quicker access to equipment compared to recruiting and training personnel. This may become the new normal for European defense equipment spending as the U.S. equivalent is around $290 billion in equipment expenditure which has actually remained at around 30% of total U.S. defense expenditure over the past decade.

VITA member companies have released details of several new contract wins in Q3. The flow of new equipment orders in Q4 may however be temporarily interrupted by the U.S. Federal government shutdown. This may oblige DoD personnel to handle related impacts with a resulting delay in defense contract awards.

This report reviews highlights and developments during the second trading quarter of 2025 and the trends that are driving technology development for VITA technology boards and systems.

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First quarter 2025 results for VITA technology suppliers who publish financial reports continue the strong revenue growth trend achieved in FY 2024 (14%). Average revenue growth achieved in Q1 for companies reporting publicly compared to the same period in 2024 was 16%.

Since Q1, the security challenges in Europe and the Middle East continued to increase and against that backdrop, commitments to increasing defense budgets continue to firm-up. Details of the U.S. defense budget request are available to view, program by program and the overall spending increase proposed is in the order of 14%. European NATO-member countries are finally recognising that they have underspent on defense in recent years and are proposing to increase spending to 3.5% of GDP on modernising and equipping their defense forces with an overall spend of 5% by 2035.

This also comes at a time when defense procurement strategy in the U.S. and increasingly in Europe, is focused on rapid deployment of innovative technology based on commercial off the shelf solutions with modular open standards. VITA standards based products are already the building blocks for many such systems.

A key challenge for the industry may be to build supply chain capacity quickly enough to meet the expected output demand. The order books of VITA members are growing as is order backlog, and shipment rates need to rise to ensure customers experience timely deliveries. There is evidence this quarter that planning for increasing present and future demand is happening in the VITA community via the reported corporate activity to grow supply chain capacity or by commissioning new production facilities. The increasingly bullish demand outlook described in this quarterly report may provide adequate evidence to support the business case for increasing supply chain capacity and output.

This report reviews highlights and developments during the first trading quarter of 2025 and the trends that are driving technology development for VITA technology boards and systems.

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The U.S. administration has, as expected, expanded its use of tariffs and the impact on the defense industry supply chain is beginning to concern contractors.

As the political fall-out over tariffs and halting military support for Ukraine threatens to weaken relations between the U.S. and European allies, significant increases in European defense spending have been announced. Whether this budget will be spent on European-made rather than U.S.-made equipment depends to a great extent on political developments.

Meanwhile full-year 2024 results for VITA-standard suppliers who publish financial reports continue the strong growth trend achieved to date in 2024 with an average of 14% annual growth compared to 2023. New VPX and chassis products have been announced in the quarter as well as the announcement of contract wins and new partnerships.

This report reviews highlights and developments during the fourth trading quarter of 2024 and the trends that are driving technology development for VITA technology boards and systems.

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The change in Administration decided by U.S. elections in Q4 has initiated discussions on how expected policy changes may affect U.S. defense manufacturers in 2025 and beyond. Key issues are first, the commercial relationship with China and how proposed tariff increases will impact on supply chains and costs. Second, is the threat of significant federal government spending cuts and how these might impact on the U.S. defense budget and programs. Third is the relationship with NATO allies including threats to withdraw support for Ukraine and the pressure on allies to increase significantly defense budgets.

The latter is already stimulating the growth in European defense spending and the rebuilding of the European defense industry to achieve a more robust, and to some extent less U.S.-reliant, defense posture in the face of Russian aggression.

New European joint ventures have been announced in Q4 which evidence this trend and VITA members are well placed to take advantage of new project opportunities by offering the modular open architecture components to build advanced systems. This may require building stronger direct relationships with European defense companies who see the benefits of following the U.S. military’s preferred open systems approach.

Meanwhile Q3 results for VITA-standard suppliers who publish financial reports continue the strong growth trend achieved to date in 2024 with an average of 13.5% growth compared to the same period in 2023. Many new VPX, XMC and chassis products have been announced in the quarter as well as the announcement of significant contract wins, in particular, Kontron’s major 165m Euro contract win for VPX computing and communication computing units for mobile and stationary surveillance applications.

VITA’s own Embedded Tech Trends conference in San Antonio January 13-14 will provide participating sponsors to showcase news on new standards developments.

This report reviews highlights and developments during the third trading quarter of 2024 and the trends that are driving technology development for VITA technology boards and systems.

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News that the U.S, Air Force future strategy is moving to disaggregate the purchase of mission systems capability from platform supply highlights the importance of the mission computer with the flexibility of exchangeable plug-in cards to achieve varying mission goals. It may also cause many VITA member companies to consider how this may change their future product offerings and customers relationships.

VITA member companies have published record half-year financial results with an average revenue increase of 14.3% on the same period of the previous year. New contract wins announced in Q2 support this growth going forward and it would seem that much of this growth is coming from recently announced new products.

VITA members working on new standards have been busy on two fronts both in terms of the eagerly anticipated VNX+, an emerging VITA small form factor computing standard and the VITA 100, next-generation plug-in module form factor currently being standardized by VITA as a follow-on to OpenVPX. Through the collaborative work of these VITA standards committees, the future of military and critical embedded computing is assured.

This report reviews highlights and developments during the second trading quarter of 2024 and the trends that are driving technology development for VITA technology boards and systems.

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Further confirmation of the significant increase in defense spending was provided by the latest SIPRI data. Meanwhile a boost to the European defense industry has been given by the announcement of €1,031 million of EU funding to support 54 joint European defense research and development projects. It will be interesting to see if VPX becomes the de facto standard for European military embedded computing.

Company results in the first quarter of 2024 continue the trend of generally strong growth in revenues. The semiconductor industry is also experiencing strong growth in shipments and investment in capacity.

It is refreshing to see that confidence is still strong in the veteran VME standard with Intel’s latest Atom processor now made available for customers looking for a simple, cost-effective upgrades to computing capability while remaining within the VME environment.

Several new VPX products have been launched this quarter. Announcements of significant contracts for VPX-based systems is also encouraging and validates VITA’s annual market research which identified the growing opportunities for VITA standard systems suppliers.