Asia-Pacific Submarine Market Perspectives – Part I

In this month’s Hot News, we cover two different submarine programs in the Asia-Pacific (A-P) region.  Articles detail how Malaysia and Taiwan are sustaining investments in key submarine programs and technologies, ensuring the capability to operate in the undersea domain for decades to come.

AMI reporting on these submarine programs provides another opportunity to emphasize our long-term perspective on key regions like the Asia-Pacific and key market segments, like submarines.  Our market intelligence and consulting draw on this long-term perspective to provide actionable information to key customers with a wide range of planning horizons—from strategic planners to business developers and capture leads.

So, in the first of a two-part editorial to be concluded next month, we outline the current state of the A-P submarine market, highlighting some trends behind the numbers.

First, submarines remain a “must-have” capability and make up a significant share of the investment portfolio for future naval force spending, both globally and in the Asia-Pacific region.  The proliferation of new submarine-launched land attack and anti-ship missiles accentuates this trend.

A-P countries are increasing their investment in both quantity and quality of submarines.  AMI’s A-P region comprises 21 countries.  Of those, 13 countries have new construction submarine programs either building now or in the planning stages for future construction.

Three years ago, AMI projected that new submarine procurements worldwide would total US$307B and account for almost one-third of all forecasted global naval spending thru 2035.  Three years later, the forecasts remain consistent:  global submarine spending out to 2038 is estimated at US$310B.  This still accounts for about 30% of the world’s total planned naval spending, made up of the hulls as well as shipboard systems.

The Asia Pacific region continues to track with world trends and represents a significant part of this global submarine market.  As seen in the chart below, forecasted spending on new submarines in A-P countries is just over US$80B.  That accounts for about 25% of the projected global market for new subs.

And tracking with global patterns, A-P submarines will make up about one-third of planned spending on all types of new naval platforms.

	US$B	Percentage of Total Ships	Number of Hulls	Percentage of Total Ships
A-P Subs Total	80.72	31%	115	11%
A-P All Ships Total	262		1048
World Subs Total	310.6	26%	304	38%

The table also shows how submarines remain the costliest naval platform to acquire on a per hull basis.  AMI forecasts 115 new submarines will be acquired by A-P navies over the next 20 years.  As a share of all new naval platforms to be acquired in the region, submarines make up just over 11%.  But on a value basis, submarines account for over 30% of all spending (total estimated acquisition cost).

The A-P region’s navies recognize the unique capabilities of submarines to perform a variety of missions relevant to the security landscape. The return on investment in submarine capabilities is a force multiplier and sea services are going forward with expensive programs to acquire even better undersea platforms well into the future.

Additional information on this article can be attained by contacting Tony Beitinger at AMI International (Tel: + 1 360 373 2686 or E-mail: cbeitinger@amiinter.com).