Naval Vessel Defense Systems Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The naval vessel defense systems market is expected to exhibit a growth rate of more than 5% during the forecast period.

Key Highlights

• The increasing global use of unmanned systems, stealth systems, and supersonic/hypersonic threats have exponentially increased the threat for naval vessels forcing the militaries to strengthen their naval defense capabilities. This factor is expected to drive the market growth for naval defense systems during the forecast period.
• The market for directed energy systems will see a surge in the future due to their countering aerial threats. The United States is focusing its directed energy weapons research on technologies that are ready to field. It plans to install laser defense system HELIOS (High Energy Laser and Integrated Optical-Dazzler with Surveillance) on its destroyers from as early as 2021.

Key Market Trends

Missile Defense Segment had the Largest Market Share in 2019

The missile defense segment held the largest market share in 2019. Advanced naval defense systems are combining sensors, electronics, and modern weaponry to create robust missile protection. Countries such as the United States and Russia are focusing on integrated platforms to reduce infrared and radar signatures of warships that can reveal assets' positions to the enemy. Naval Missile Defense System such as Aegis, (developed by Lockheed Martin and Raytheon) is witnessing rapid adoption by countries such as the US, Japan, Canada, Spain, Norway, etc. Aegis System has introduced features such as open architecture and an open-source library capable of providing real-time data fleets in the combat area and leveraging for future improvements. The Aegis system will also propel the market for SM 3, SM 2, and SM 6 interceptor missiles for beyond and inside atmosphere interception of Intercontinental and Mid-Range ballistic missiles. Also, the demand for robust missile defense capabilities is increasing as countries try to mitigate threats for their assets on the sea. The US Naval Sea Systems Command awarded a USD 30.1 million contract to DRS Laurel Technologies in March 2020 for 59 AN/SPQ-9B missile defense system. Many naval vessel defense system manufacturers are now focusing on developing integrated missile defense systems that provide overall protection from nearly all kind of other aerial threats. For instance, the BARAK MX system developed by Israel Aerospace Industries uses BARAK MRAD, BARAK LRAD, BARAK ER missiles ranging from 35 kilometers to 150 kilometers. In addition to missile defense, it also protects aircraft (fighters, helicopters, and UAVs), cruise and ballistic missiles, and gliding bombs.

North America Expected to Dominate the Market During the Forecast Period:

In terms of geography, North America is expected to dominate the market during the forecast period, mainly due to great demand from the United States. The development of supersonic and hypersonic missiles by other countries is forcing the United States to invest in the development of existing systems and are not fully equipped to defend the country's sea-based assets in case of supersonic and hypersonic weapon attack since they function as a mere countermeasure. This reason is expected to fuel the development of more efficient and effective naval missile defense systems in the years to come. Also, the heightened tension between the US and its adversaries has led the country to develop a greater number of technologically advanced ships in water bodies around the Middle East and Europe, in addition to its territorial waters. Currently, the United States has Aegis, Phalanx, RIM-116 Rolling Airframe Missile (RAM) naval defense systems. Phalanx Close-In Weapon System uses a combination of forward-looking infrared radar (FLIR) and Ku-band radar for automatic detection and tracking of threats such as anti-ship missiles and fighter aircraft. Phalanx uses an M-61A1 Vulcan Gatling gun to fire at aerial threats at 4500 rounds per minute. The naval defense systems can be used in combination with one another. For instance, the SeaRAM missile system combines Phalanx's Close-in Weapon System and Raytheon's RAM System. By 2024, United States plans to introduce Aegis ballistic missile defense system (that combines weaponry with advanced radar systems) on 59 ships. Such procurement and deployment plans are expected to further boost the region's market growth during the forecast period.

Competitive Landscape

Lockheed Martin Corporation, General Dynamics Corporation, Raytheon Technologies Corporation, BAE Systems PLC, and Northrop Grumman Corporation are some of the prominent players in the market. As the naval vessels' threats are increasing, companies are involved in the R&D efforts to produce better naval vessel defense systems. As the existing naval defense systems are optimized to shoot down objects only in low-Earth orbit but not in the upper atmosphere, the threats from the newer hypersonic weapons are increasing for the naval vessels. In this regard, a significant amount of R&D is expected to be divested for obtaining those defense capabilities. In addition, the increasing focus on directed energy weapons for the naval ships is also expected to create significant growth opportunities for the players during the forecast period. For instance, US Navy plans to install a High Energy Laser and Integrated Optical-dazzler with Surveillance (HELIOS) weapon system aboard an Arleigh Burke-class Flight IIA destroyer in 2021. Such contracts are expected to boost the market prospects for the development programs' players during the forecast period.

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