The defense industry is looking with as positive a frame of mind as it can as 2011 unfolds and this appeared to be supported by a strong start to the year as evidenced by both M&A and contract activity (see the ADS report, Defense Electronics Industry Review: January 2011).

Merger & Acquisition activity in the sector maintained momentum as cash rich larger firms look to secure market share, key technologies or market entry. There were no less than a dozen defense-oriented mergers, acquisitions and partnerships in the past six weeks.

As well as a plethora of M&A activity, total contract orders also maintained momentum and January again saw contracts comfortably in excess of a billion dollars with strong demand for radar technologies as evidenced by contract awards to Raytheon, Lockheed Martin, Saab and Thales with airborne and naval platforms being the target markets. Electronic warfare activity was also strong with IED (improvised explosive device) jamming contracts going to ITT and Raytheon, while Cobham, Harris and Rockwell Collins featured amongst the recipients for communications-related contract awards.

There were also a number of notable announcements on the component front with UK-based Amplifier Technology introducing a number of GaN-based amplifer products targeting EW applications such as IED jamming. On the semiconductor front, Hittite launched a series of products while TriQuint announced a foundry agreement and separately, a contract with AFRL focused on GaN device development.

Looking ahead, DARPA has requested industry to find ways of combining DAC and high-power amplifier technology in a single device for electronic warfare, radar, and military communications systems. The emphasis appears to be focused on using the inherent integration capabilities offered by Si and SiGe technologies, but given the recent advances shown with BiHEMT process technologies, Strategy Analytics sees no reason why GaAs technologies could not be considered also.