Teal Group, FAIRFAX: Teal Group analysts report that even before North Korea's own “declaration of independence” on July 4, 2006, ballistic missile defense (BMD) was a huge defense electronics program in the United States, as sensors and C4I are the most crucial aspects of most programs. Teal analysts predict the BMD market will total some $50.5 billion from FY2006 to FY2015 (details below).
New interceptors (missiles) have also been developed, but locating, tracking, and destroying opposing ballistic missiles is largely controlled by sophisticated electronics as opposed to brute force, report Teal Group analysts.
“Now, with threats of even longer-range ballistic missiles from China as well as North Korea, Ballistic Missile Defense can be expected to remain the world's most important defense electronics market,” said Dr. David Rockwell, Teal Group's lead military electronics analyst.
Dr. Rockwell edits Military Electronics Briefing, the 1,400-page, monthly- updated, competitive intelligence service, in which the latest Ballistic Missile Defense forecast has just been published.
The mission of the United States Missile Defense Agency (MDA) is to develop a Ballistic Missile Defense System (BMDS) to defend the United States and its deployed forces, friends, and allies from ballistic missiles. The MDA's overall approach to developing and fielding a BMDS is an integrated, layered defense against threats of all ranges, in all phases of flight, which will ensure the defense is not vulnerable to any particular threat.
“The U.S. BMDS will likely provide the greatest funding of any defense electronics program over the next decade, with radar sensors and complex C4I systems earning the bulk of this,” said Dr. Rockwell.
Teal analysts predict BMD funding will decline after a peak of $6.0 billion per year in FY08. However, even with very few individual programs, BMD will remain one of the largest segments of the defense electronics market. It will exceed the total electro-optical (EO) market every year for the next decade, and will nearly match the entire radar market, with the largest world radar programs being for BMD, they said.
The only segment of the radar market that will approach BMD funding will be airborne fighter radars, with $21.1 billion forecast from FY06 to FY15, versus $25.8 billion for BMD radars.
Due to the importance of networking sensors for ballistic missile detection in many layers across the globe, BMD C4I will receive nearly as much funding as the sensors themselves ($22.3 billion from FY06 to FY15), probably the one defense sensor market where this will be the case. EO sensors, once the primary detectors of ballistic missile launch, will become a relatively small portion of the total ($2.5 billion), though not really a small market at all.
“As might be expected,” said Dr. Rockwell, “the Big Three defense sensor manufacturers will gain the lion's share of this $50.5 billion market (from FY06-FY15), though a large portion of our funding graph allocated to Raytheon, Lockheed Martin, and Northrop Grumman will in fact be subcontracted to other defense and commercial electronics firms, especially for C4I.”
Our “other” funding represents major contracts to companies besides the Big Three, and “available” indicates funding still uncontracted that could go to anyone (including, for example, Raytheon or Northrop Grumman, currently competing for the billion dollar Block 2012 STSS sensor contract).
“Raytheon will lead the overall BMD sensor and C4I market ($18.3 billion from FY06 to FY15), due in large part to its total dominance of numerous large X-band radar programs, said Dr. Rockwell.
“Lockheed Martin ($13.7 billion) will be equally dominant with Aegis, with this single huge program to provide the majority of their BMD funding. Northrop Grumman will bring up the rear ($6.2 billion), never quite achieving the status of heavyweights Raytheon or Lockheed Martin.
“Though Northrop will actually be number two to Lockheed Martin in C4I, and will lead the EO market with their SBIRS-High sensor, they will have a very small part in BMD radar programs and consequently will lack the power to control, or steer, any segment of the BMD market.”
Teal Group is an aerospace and defense market analysis firm based in Fairfax, Virginia USA. It provides competitive intelligence to industry and government worldwide.
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