ASELSAN`s Perspective on Naval Defense Systems, Products and Technologies

Zekeriyya ŞAHİN, ASELSAN Naval Systems Program Director

Issue 113 - April 2022

The global defense industry market size was approximately US$ 2 trillion in 2020. We observe that it increased due to cyclical developments and regional tensions, especially after 2013. Here, we see that military expenditures increased by 2.6%, especially from 2019 to 2020, despite the decrease in the Gross National Product of countries across the world. What I want to emphasize with this such noteworthy figure is that when compared with the 1990s, it rose more than three-fold in the Asia-Pacific region. It is not difficult to foresee that it will continue to increase in the upcoming period. In the second place, we see that the expenditures in the Middle East region are also increasing. Since the European and American regions are relatively dominated by the U.S. industry, although the main reason for the increase here is the expenditures of the U.S., we see that a relatively certain volume of defense expenditures continues in Europe. Now, if we look at the naval side, it is necessary to separately analyze it as sub-segments. In 2020, we see that the naval ship market reached US$ 57.8 billion. Upon examination of market analysis, especially that of Frost & Sullivan, in general, growth projections are upwards near 10% between 2022 and 2030, and this varies in sub-segments. For example, while growth of around 3% - 4% is expected in Naval Combat Systems, we see that the growth forecast for Unmanned Systems can be 25% annually. Therefore, I think it is important in terms of addressing the areas in which this sector may need to go. Generally, we can say there is substantial growth forecasted in all sub-segments.

When we look at the Turkish market, as illustrated in the SASAD report, the land systems side has the highest volume of turnover now and the naval systems side seems to have reached a turnover of US$ 673 million in 2020. Certainly, there are components for naval systems in other sub-segments such as missiles and maintenance-repair. It is observed that the business volume on the naval systems side has slightly decreased since 2018 due to the recent cyclical developments in security, land and military aviation. We anticipate that the volume will increase again with new platform projects in the upcoming period. When we look at market analysis, we see that various issues come to the fore, and I would like to highlight them separately. We can see that the multi-purpose platform concept, which can perform numerous tasks together, will gain significant importance in the coming period, especially instead of surface platforms that can perform single tasks. It calls attention to the fact that an important concept is that a platform can act as a network centric mother ship and carry out operations with unmanned platforms around it. New weapons, especially the electromagnetic rail gun, laser gun, hypersonic weapons can change the concept a little more. We can see such weapons have increased their importance a little further, especially in terms of point defense. We also observe this in market analysis reports. Modular architectures are still important, technological advancements are happening rapidly where we see that modularity is of great consequence. Automation and autonomy are observed to be an important concept in terms of both achieving unmanned systems and minimizing the need for personnel on board.