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Advanced Technologies and Cyber will need to be the Focus for Defense Industry in 2013

by Asif Anwar | 12月 13, 2012

In contrast to the positive swing observed at the end of the second quarter, revenue growth came to a standstill in the third quarter of 2012, with a snapshot of company results showing revenues largely flat quarter-to-quarter. For most companies, there was a common thread with revenue growth in one or two parts of a company’s business activity being counteracted by declines at other business units.

Despite the challenging quarter, early indicators suggest that the defense industry will show revenue growth in 2012 and profitability will also continue to be maintained. This is despite the uncertainties surrounding sequestration and the “fiscal cliff” in the US as well as budget uncertainties in European and other international markets.

Moving into 2013, maintaining profitability will be the challenge for the industry especially if revenue growth starts to stall. The US elections have not so far resulted in a definitive political solution from the leadership on sequestration or avoiding the “fiscal cliff”. There is however some positive rhetoric coming through and in our opinion it is highly unlikely that sequestration will actually be implemented in January 2013. The more likely scenario will see legislation coming into play that offsets sequestration possibly through to the end of 2013 (calendar-year) while the two political parties continue to engage in tit-for-tat negotiations through the end of the calendar year on the issues surrounding the “fiscal cliff” and sequestration. It does appear that the US defense budget is close to approval and the industry will end up operating within essentially a “continuing resolution” as far as sequestration is concerned.

For 2013, the defense industry will need to look towards developing and offering solutions based on next generation technologies and competencies in areas such as cyber.

RF technologies such as GaN, for example, offer a clear path towards upgrading radar, electronic warfare and communications systems capabilities. The use of these technologies in AESA radar for example underpinned a number of radar milestones in November including Raytheon meeting critical performance requirements to advance ongoing system integration on the Cobra Judy Replacement program.  Northrop Grumman completed its technology demonstration contract for the US Navy's Air and Missile Defense Radar (AMDR).

There is also continued momentum behind Directed Energy Weapons using either laser or RF/microwave technologies continue to be explored. MBDA Germany completed a further major step towards a laser weapon system with a high-energy laser demonstrator that demonstrated a complete deployment sequence in countering rockets, artillery and mortar shells (C-RAM). Using 40 kW of laser power, the laser demonstrator successfully acted on airborne targets at a range of over 2 km. A similar effort from Lockheed Martin Space Systems is the Area Defense Anti-Munitions (ADAM) system which demonstrated a portable, ground-based military laser system in a series of tests against representative airborne targets.

The challenges of maintaining integrity in the network and protecting the users, platforms, systems and devices operating in a net-centric environment will provide a fresh avenue of opportunity for those companies that can offer a comprehensive suite of cyber solutions in 2013. This will provide a driver for companies to acquire capabilities to bolster their cybersecurity offerings.

There were several announcements from RF component suppliers related to GaN technology including RFMD introducing a series of high-power GaN broadband power transistors (BPTs) and highly linear GaN RF unmatched power transistors. Meanwhile, TriQuint's 0.25-micron GaN on SiC TQGaN25 process demonstrated a MTTF of greater than 10 m hours at 200C. As with GaAs, Northrop Grumman has also been at the forefront of developing GaN technologies through DARPA and other military research programs maintaining an emphasis on the defense sector. The company is now starting to showcase its GaN technology for commercial availability (see Northrop Grumman Breaks from Pack with GaN Products Targeting Higher Frequency Markets) with the introduction of a series of GaN MMIC products. Offering higher frequency capabilities through to Q-band, Northrop Grumman is breaking away from a pack of competitors that have largely focused on products at the lower end of the frequency spectrum.  

Clients of the ADS service can read the full report Defense Electronics Industry Review: November 2012 which details significant defense industry news, including product announcements, milestones, contract activity and defense industry financial performance.

For 2013, the defense industry will need to look towards developing and offering solutions based on next generation technologies and competencies in areas such as cyber. Radar, communications and EW systems capabilities will increasingly be underpinned by advanced component technologies and these technologies will also form the basis for weapon systems. The challenges of maintaining integrity in the network and protecting the users, platforms, systems and devices operating in a net-centric environment will continue to provide a fresh avenue of opportunity.

Don’t miss our regular column in Microwave Journal’s Military Microwaves.

See Defence iQ for more analysis on the defense industry, related news and events.

Finally it just remains to say Happy Holidays, Merry Christmas and Best Wishes to all for a Prosperous New Year.

Asif

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