The Market for Surface Ship Anti-Surface Warfare (ASUW) Missiles  

In June 2018, AMI reviewed recent trends in the surface combatant radar market, noting how new technologies and materials are reshaping an already crowded and competitive market segment.

 

This month we will look at another surface combatant system segment–anti-surface warfare (ASUW) missiles–where similar trends are also reshaping the market.
Diffusion of propulsion and guidance technologies have lowered barriers to entry and sparked a number of new ASUW missile entrants, challenging a current market historically led by the Boeing Harpoon and Matra BAE Dynamics Alenia (MBDA) Exocet.

 

Additionally, the same technology and materials advancements that have affected radars are also affecting missiles, with the result that smaller, better and lower cost missiles are enabling navies to disperse ASUW lethality (and “strike back” capability) among a greater number of platforms.

Current Market:  A look at AMI’s Existing Ships Data Base demonstrates that the Harpoon and Exocet continue to be leaders in today’s surface ship ASUW missile market.  AMI shows 373 ships worldwide equipped with the Harpoon, with most concentrated on larger surface combatants (cruisers to frigates).

 

 

Harpoon			Exocet
	Hulls	%	Gen 1	Gen 2	Total Hulls	%
Cruiser	25	7%
Destroyer	59	16%	3	17	20	8%
Frigate	168	45%	17	37	54	22%
Corvette	56	15%	19	54	73	29%
OPV	1	0%	6	4	10	4%
FAC	55	15%	53	39	92	37%
Patrol	6	2%
Aux	3	1%
	373		98	151	249

 

The Exocet is more prevalent among smaller ships; fast attack craft (FAC) and corvettes together make up almost 75% of the 249 surface ships carrying the Exocet.

While Exocet and Harpoon hold a strong position in the current market, it is not uncontested.  The Italian Otomat, Israeli Gabriel, Swedish RBS-15, and Indian-Russian Brahmos taken together represent the main ASUW battery for another 150+ hulls worldwide.  And while not considered export markets for most of AMI’s customers, Chinese and Russian ASUW missile- equipped ships number in the hundreds.

Future Market: What does the future hold for the surface combatant ASUW missile market?  Still more new designs and missile types for one.  The recent U.S. award to the Raytheon-Kongsberg team offering the Naval Strike Missile (NSM) for the U.S. Navy’s (USN) Littoral Combat Ship (LCS) Over-the Horizon (OTH) weapons system highlights a strong contender to equip the U.S. Future Frigate and ships of similar size and mission.

AMI’s WNPR highlights an ASUW missile market segment characterized by sustained steady growth.  Some 6,000 new ASUW missiles are expected over the next 20 years, with about two-thirds of this demand front-loaded over the next 10 years.

While perhaps half of this future demand represents acquisitions by closed markets such as China, Russia, Iran and North Korea, there is still a significant and sustained market opportunity for missile suppliers.

 

These missile projections also fit with the latest AMI forecasts on major surface ship acquisitions over the coming two decades.  400 new cruisers, destroyers and frigates are expected to join navies worldwide in that period, with almost all ASUW missile-equipped.  Another 350 new corvettes and FAC, most carrying ASUW missiles, are forecasted for the same period.

With “High End” naval conflict scenarios appearing more likely, while naval missile threats to surface ships increase in numbers and capabilities, demand will go up for a next generation of new missile launcher designs.  These will use new materials and structures that go beyond current box/canister and vertical launch systems (VLS).  However, core engineering in areas such as ablatives and safety systems are expected to carry over to future ship-based launchers.

 

And while next generation ASUW missiles will take an increasing market share, the Harpoon and Exocet are still viable systems.  BAE’s win in the Australian frigate competition with the “GCS-A” will include Harpoon missiles.

The Royal Navy (RN) itself, while committed to a Harpoon replacement in the out years (2030), has reversed an initial plan to rely on helicopter ASUW missiles on the GCS and appears set to stay with Harpoon for the ships’ initial ASUW capability.

The Canadian Surface Combatant ASUW missile fit will also likely be equipped with Harpoon, given that the Harpoon is now in service on the Halifax class frigate.

 

AMI has a 30-year long record tracking and consulting on the world naval missile market.  We consider it one of our strengths and will continue to keep our focus sharp on this critical market segment in months and years to come.