Lithuanian Defence Industry: Cyber-security and Unmanned Systems

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The Lithuanian defence industry has evolved significantly from its modest beginnings in the early 20th century, through the challenges of Soviet occupation, to its status as a burgeoning sector within the European defence landscape. It focuses on cybersecurity and such unmanned systems as drones.

Lithuania’s defence industry is poised for growth, driven by the country’s strategic focus on innovation, cybersecurity, and international collaboration. The integration of modern technologies such as drones, artificial intelligence, and cyber defence systems will be crucial for Lithuania as it seeks to enhance its military capabilities while contributing to regional security in the Baltic region. In defence technology, the Lithuanian industry’s emphasis is on R&D and partnerships with universities and international defence companies. The cybersecurity companies are developing cutting-edge solutions to protect against cyber threats. Particularly within NATO, Lithuanian companies are expanding into new markets in Europe and beyond. The most southern Baltic state is building alliances with key defence contractors in Europe and the United States.

The budget will grow because of modernization commitments by the Lithuanian government and additional threats, including the conflict in Ukraine, have heightened the need for military spending.

The Role of Government and Policy Support

The Lithuanian government plays a crucial role in supporting and guiding the defence industry. Through policies that promote innovation, investment in R&D, and incentives for export activities, the government can ensure that the industry remains competitive and aligned with national security needs.

The Lithuania defense budget was worth more than 2.1 billion euros in 2024 and will grow at a CAGR of more than 6 percent during 2025-2029, the Global Data reports. Lithuania is committed to meeting and exceeding NATO’s defence spending target of 2 percent of GDP provides a solid foundation for the industry’s growth. Continued government investment in defence infrastructure and procurement is thus essential. The Lithuanian military is planning e.g. the acquisition of armored vehicles, M142 HIMARS, and Black Hawk helicopters to provide it with more modern capabilities.

The government is encouraging collaboration between the public and the private sector, that can lead to more efficient development of defence technologies and capabilities. Public-private partnerships (PPPs) can be particularly effective in areas such as cybersecurity and infrastructure development.

Lithuania leads the European Cyber Rapid Response Teams (CRRTs), a collaborative initiative that brings together expertise from EU Member States to address cyber threats. The CRRTs offer support in areas such as training, vulnerability assessments, and other vital cybersecurity measures, strengthening the EU’s capacity to prevent and respond to cyber-attacks.

The Regional Cyber Defence Centre (RCDC), led by Lithuania’s Ministry of National Defence, serves as a key hub for cyber defence cooperation, focusing on threat analysis, information sharing, and critical infrastructure protection.

Lithuania’s cybersecurity ecosystem includes initiatives like Cyber City for innovation and Women4Cyber for promoting diversity. The ScaleWolf Venture Capital Fund, with €13.5 million, supports advancements in cybersecurity and defence technologies. The local game development industry, featuring companies like Wargaming and Unity, also presents opportunities for developing defence-related virtual training systems.

From Cybersecurity to Unmanned Systems

Looking forward, several strategic focus areas are critical for the continued growth and success of Lithuania’s defence industry. As cyber threats become more sophisticated, Lithuania’s expertise in IT and cybersecurity positions it well to lead in this critical area.

The development and deployment of drones and other unmanned systems are increasingly vital in modern warfare. Companies such as Elinta are pioneering in this space, creating innovative drone technologies that could play a crucial role in both national defence and international peacekeeping operations.

With a limited domestic market, expanding exports is essential. Lithuanian companies must continue to build relationships with international partners and secure contracts within NATO and beyond. Continuous investment in R&D is necessary to stay ahead of technological advancements. Defence Projects Lithuania and other R&D-focused companies need to collaborate closely with universities and research institutions to drive innovation.

Challenges and Opportunities

While the Lithuanian defence industry has seen considerable growth, it faces several challenges that must be addressed to sustain and enhance its capabilities:

  • 1. Limited Domestic Market
    – Challenge: The relatively small size of Lithuania’s domestic market limits the scale of production and development. This necessitates a strong focus on export markets, particularly within NATO and the EU, to sustain growth.
    – Opportunity: Building strategic alliances and partnerships with larger defence companies in Europe and the U.S. can help Lithuanian companies scale their operations and access new markets.
  • 2. Technological Advancements
    – Challenge: Keeping pace with rapid technological changes in defence requires significant investment in R&D, as well as collaboration with academic institutions and global tech companies.
    – Opportunity: Lithuania’s strong IT sector can be leveraged to advance its cybersecurity and unmanned systems capabilities, which are increasingly vital in modern defence strategies.
  • 3. Geopolitical Tensions
    – Challenge: The geopolitical landscape, particularly the tension with Russia, underscores the importance of a robust defence sector. However, it also poses risks, as the region’s stability remains fragile.
    – Opportunity: Lithuania can capitalize on its strategic location and NATO membership to attract defence investments and collaborations, turning potential vulnerabilities into strengths.
  • 4. Talent Acquisition and Retention
    – Challenge: The defence industry requires highly skilled workers, particularly in engineering and IT. Attracting and retaining this talent in a competitive global market is a challenge.
    – Opportunity: Initiatives to enhance STEM education and provide specialized training in defence technologies can help build a strong domestic workforce, reducing reliance on foreign expertise.

Players in the Lithuanian Defence Industry

Lithuania’s defence industry, though relatively small, is home to several companies that are making significant contributions both domestically and internationally. Here are some Lithuanian defence industry companies:

  • 3photon
    3photon Ltd specializes in the development and manufacturing of photonics technologies, catering primarily to the defence and aerospace sectors.
    Products: Laser systems, optical components, and photonics technology solutions.
    Market: International, with a focus on Europe and North America.
    Ownership: Privately owned.
    Size: Approximately 50 employees.
  • Abepa
    Abepa focuses on the maintenance and repair of military vehicles and defence machinery.
    Products: MRO services for military vehicles.
    Market: Domestic.
    Ownership: Privately owned.
    Size: Small.
  • AB Giraitės Ginkluotės Gamykla
    AB Giraitės Ginkluotės Gamykla is a key Lithuanian manufacturer of small arms ammunition for military applications.
    Products: Small arms ammunition (various calibres).
    Market: Domestic and international, particularly in European markets.
    Ownership: State-owned.
    Size: Approximately 200 employees.
  • Altechna UAB
    Altechna UAB specializes in laser optics and photonics, serving both military and civilian markets.
    Products: Optical components, laser systems, and photonics solutions.
    Market: Global, with a strong focus on Europe and Asia.
    Ownership: Privately owned.
    Size: Around 100 employees.
  • Arms of Freedom
    A defence contracting company that provides consultancy and integration services for defence projects in Lithuania and abroad.
    Products: Consultancy services, integration of defence systems.
    Market: International, with projects in Europe and the Middle East.
    Ownership: Privately owned.
    Size: About 50 employees.
  • Astrolight
    Astrolight develops space-to-ground optical communication solutions, including the ATLAS-1 optical communication terminal for LEO satellites and the OGS-1 portable optical ground station.
    Products: Optical communication terminals, ground stations.
    Market: Global.
    Ownership: Privately owned.
    Size: Small.
  • Axis Industries
    One of Lithuania’s largest engineering companies, Axis Industries specializes in the development of integrated security solutions for military and civilian applications.
    Products: Security systems, integrated defence solutions, engineering services.
    Market: Primarily domestic, with growing international exports.
    Ownership: Privately owned.
    Size: Over 1,000 employees.
  • Baltic Armaments
    Baltic Armaments focuses on the production and supply of small arms and ammunition.
    Products: Small arms, ammunition.
    Market: Baltic States, expanding into European markets.
    Ownership: Privately owned.
    Size: Approximately 200 employees.
  • Baltic Engineering
    Provides engineering solutions for the defence sector, including the development of modular military bases and infrastructure.
    Products: Modular buildings, military infrastructure.
    Market: Baltic States, expanding to Europe.
    Ownership: Privately owned.
    Size: Around 200 employees.
  • BME Services
    BME Services provides engineering and technical support, particularly in the maintenance and repair of military vehicles and equipment.
    Products: MRO services for military vehicles and equipment.
    Market: Domestic, with potential for regional growth.
    Ownership: Privately owned.
    Size: Medium-sized company.
  • Brolis Semiconductors UAB
    Brolis Semiconductors is a leading provider of advanced infrared sensor technologies for defence and aerospace applications.
    Products: Infrared sensors, semiconductors, laser systems.
    Market: International, with a focus on Europe and the U.S.
    Ownership: Privately owned.
    Size: Approximately 150 employees.
  • Defense Projects Lithuania
    Focuses on research and development for defence technologies, including unmanned systems and next-generation combat technologies.
    Products: R&D in defence technologies, unmanned systems.
    Market: Lithuania, with growing partnerships in the EU.
    Ownership: State-owned.
    Size: Approximately 80 employees.
  • Detonas
    Detonas is a key Lithuanian manufacturer of explosives and related products for both military and civilian applications.
    Products: Explosives, demolition systems.
    Market: Domestic and international.
    Ownership: Privately owned.
    Size: Medium-sized company.
  • Eisiga UAB
    Eisiga UAB specializes in providing cold storage solutions and logistics for military and civilian clients.
    Products: Cold storage systems, logistics services.
    Market: Primarily domestic.
    Ownership: Privately owned.
    Size: Small.
  • Ekspla UAB
    Ekspla UAB is known for its production of high-performance lasers and laser systems for industrial and military applications.
    Products: Lasers, laser systems, and related components.
    Market: Global, with strong sales in Europe and Asia.
    Ownership: Privately owned.
    Size: Around 150 employees.
  • Elinta
    Elinta is renowned for its expertise in automation and robotics, with applications in the defence sector including drone technology and autonomous systems.
    Products: Drones, robotics, automation systems.
    Market: International, with clients in Europe and Asia.
    Ownership: Privately owned.
    Size: Around 300 employees.
  • Elsis TS
    Elsis TS develops and integrates communication and command systems for military forces.
    Products: Communication systems, C4ISR solutions.
    Market: Primarily Europe.
    Ownership: Privately owned.
    Size: Around 200 employees.
  • Granta Solutions, UAB
    Founded in 2009, Granta Solutions initially focused on software development but expanded into mechanical and electronics engineering. Since 2015, the company has been building and operating fixed-wing UAVs.
    Products: Fixed-wing UAVs, software, mechanical engineering services.
    Market: Domestic and international.
    Ownership: Privately owned.
    Size: Medium-sized.
  • Didronai
    Didronai is involved in the development of drones and unmanned aerial systems for military use.
    Products: UAVs, drone systems.
    Market: Domestic and international.
    Ownership: Privately owned.
    Size: Small.
  • Lithuanian Defence Services (LDS)
    Lithuanian Defence Services (LDS) is a joint venture between Rheinmetall and KNDS, offering maintenance, repair, and overhaul (MRO) services for military machinery.
    Products: MRO services for military vehicles (Boxer Vilkas, Leopard 2, PzH 2000).
    Market: Primarily domestic and European.
    Ownership: Joint venture (50% Rheinmetall, 50% KNDS).
    Size: Medium-sized.
  • NT Service
    NT Service is known for its anti-drone systems and electronic warfare products, including the battle-proven EDM4S portable anti-drone device.
    Products: Anti-drone systems, cellular jamming devices.
    Market: Lithuania, Ukraine, Romania.
    Ownership: Privately owned.
    Size: Medium-sized.
  • RSI Europe
    RSI Europe develops radio and electronic systems for the defence sector, including the RISE-1 remote initiation system and FPV drones.
    Products: Radio and electronic systems, remote initiation systems, FPV drones.
    Market: International.
    Ownership: Privately owned.
    Size: Medium-sized.
  • Tampus Novum
    Tampus Novum provides technical and engineering solutions for the defence industry, with a focus on vehicle systems.
    Products: Military vehicle systems and solutions.
    Market: Domestic.
    Ownership: Privately owned.
    Size: Medium-sized.
  • Uvireso
    Uvireso specializes in the development of advanced radio frequency and communication systems for military use.
    Products: Communication systems, RF technology.
    Market: Domestic and regional.
    Ownership: Privately owned.
    Size: Small.
  • Vilkas Engineering
    Specializes in armored vehicle manufacturing and maintenance, providing crucial support to Lithuania’s mechanized units.
    Products: Armored vehicles, vehicle maintenance services.
    Market: Primarily Lithuania, with contracts in neighboring countries.
    Ownership: State-owned.
    Size: Approximately 150 employees.
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