Overview of Defense Electronics Market Trends
By Jessy Cavazos, Industry Director, Frost & Sullivan

With defense spending on the downward slope, the focus of those catering to the needs of the aerospace and defense (A&D) industry is shifting to areas less likely to be impacted by budget cuts, one of which is the unmanned vehicles, including unmanned aerial vehicles (UAV), as they are seen as a way to deliver the same or better capability at a lower cost than previous platforms requiring manpower. The growth of the data requirements in that space augurs well for test and measurement companies who are currently leveraged heavily for radio frequency (RF) and microwave testing of systems.

While there is a lot of focus on UAVs, they are certainly not the whole story in the defense market for test and measurement vendors. Electronic warfare (EW) is probably growth area Number 1, with research indicating investments in this area growing despite reduced defense budgets. There is continued work on EW to jam signals, specifically improvised electronic devices (IEDs), and be able to not only identify them but also disable them electronically.
Having said this, the biggest area of spending for defense electronics still remains radar. The use of electronically steered array (ESA) technology in advanced radars is stirring up activity in this area.

This article provides an overview of the trends in each of those markets.

UAV Market Trends
Frost & Sullivan research on the Department of Defense (DoD) unmanned aerial systems (UAS) market expects continuing combat operations and irregular warfare (IW) to drive UAS requirements despite troop withdrawal from Iraq. “In fact, intelligence, surveillance and reconnaissance requirements could increase as security will no longer be provided on the ground,” says Michael Blades, Senior Industry Analyst for the Aerospace & Defense Business Unit at Frost & Sullivan. “Moreover, U.S. forces will need to continue improving intelligence, surveillance, and reconnaissance (ISR) capabilities via advanced technologies and sophisticated information operations for which UASs will be critical.”

While the data requirements between the UAVs and their operators have gone exponential compared to the past, this is likely to further increase in the future. Despite technical challenges and an increased focus on cost reduction, there is still a significant push for high performance that translates into a need for higher frequencies, wider bandwidth, signal simulation and analysis, and the ability to measure signals with very high precision and low noise floors.

Another key factor expected to drive the growth of the UAS market is the increasing use of commercial off the shelf (COTS) technology to reduce costs. UAS manufacturers, especially those manufacturing tactical-size platforms and smaller, are advertising the capabilities of their platforms to incorporate COTS sensors and subsystems to reduce cost. The DoD is also looking to increase the use of PC technology in ground control stations for cost and configurability reasons.

The push for COTS technology has also impacted the test and measurement market, with the DoD purchasing COTS test solutions. While it enabled them to reduce the upfront acquisition cost, it is costing them more in the long run in some cases. Going forward, the DoD is expected to revert back to its old ways, specifying what they want depending on what they are doing. There will be a mix of test solutions used in A&D moving forward, some COTS and some custom.

The trend towards the use of COTS technology is not new and has been a continuing trend in the military, with the emphasis varying depending upon priorities. With the current budget environment increasing the focus on cost, the emphasis on using COTS technology is expected to be strong over the next few years.

With the most recent war- time activities on the ground and small, informally organized combatants, the focus of the industry has shifted towards unmanned vehicles as they are seen as a way to deliver the same or better capability at a lower cost than previous platforms requiring manpower. However, efforts are also being made towards the greater autonomy of those devices. This is expected to contribute to the growth of the UAS market in the future and concerns both high-altitude long-endurance (HALE) and medium-altitude long-endurance (MALE) UAVs as well as tactical size and smaller ones. The operation and monitoring of large UASs still require significant manpower currently, while manufacturers of smaller UASs hope to reduce the need for highly experienced UAS operators. Boeing’s A160 Hummingbird is testament to this trend towards the greater autonomy of UAVs.

On the other hand, there is also a push for common control and data links, as the creation of the Unmanned Control Segment Working Group (UCS-WG) by the DoD suggests. Common data links and communication services between UAS platforms are still a work in progress. This is part of a larger trend in this industry that is their overall desire for commonality.

Another ongoing trend is the continued emphasis on reducing the size, weight and power consumption (SWaP) of UASs, translating into increased development efforts from manufacturers on sensors and subsystems. Work on tiny UAVs that can fly through windows and remain in a room without attracting attention or can be thrown in the air for a few seconds to provide valuable information to those on the ground without being located is in progress. Testament to that is the opening of the Laboratory for Autonomous Systems Research (LASR) by the Navy in April. Manufacturers are looking to increase the usefulness and effectiveness of small UASs while increasing loiter times for large ones. While the achievements of Boeing’s A160 Hummingbird are impressive, future UAVs are expected to be able to stay in the air for months. Manufacturers are also striving to increase the survivability of UASs.

The SWaP trend has made its way into the test and measurement industry, translating into increased demand for modular instruments whose primary advantages over traditional instruments are size, weight and power consumption. While not a new trend, the emphasis on SWaP is expected to increase in the short and medium terms as a result of the current budget environment. “Reductions in size, power or weight have a direct impact on costs,” says Carl Heide, Market Development Manager, Aerospace & Defense at National Instruments. “While modular instrumentation requires a capital investment, total ownership cost is not limited to the initial acquisition cost but also includes logistics, calibration requirements, repair, etc.” As defense customers better understand the total cost of ownership, their demand is increasingly trending toward modular instrumentation. When taking into consideration the ability of the platform to evolve over time, the importance of the initial acquisition cost further decreases. “The rapidly changing environment in which defense companies evolve requires platforms that can adapt to new threats, enabling customers to test new countermeasures, devices,” adds Heide.

The need for rapid evolution is certain in the defense industry. Testament to that is the increased use of FPGA on platforms so they can adapt quickly. This is also true for the instrumentation and prototyping activities. Reality is that it is difficult at times to get a hold of a plane or device to perform testing or prototyping. As a result, there has been an increase in hard-in-the-loop (HIL) applications that enable reduction in development times. There is a requirement to quickly cycle on devices at a lower cost. The industry wants to capture any defect or opportunity to improve the system before it is implemented into the end product.
Another important advantage of modular instrumentation is the flexibility of those solutions, enabling users to mix and match modules depending on their uses. Reuse is better facilitated with modular instrumentation than traditional boxes.

Looking ahead in the UAS market, technical challenges are expected as a result of simultaneous communication security, spectrum management, and bandwidth use concerns. DoD UAS platforms need the ability to encrypt data and transmit/receive that data across dedicated frequency spectrums to minimize cross-channel interference. This, as well as SWaP requirements, affects range and bandwidth capabilities. Moreover, the amount of information across communication channels and data links is bound to increase. However, technologies that encrypt large amounts of data for rapid transmission are still being developed. UAS platforms will also need to be protected from DoD offensive weapons designed to affect enemy communications. Spectrum management is required to reduce data loss and mitigate signal interference.

Lacking the ability to respond effectively to human-voice controllers, UASs must be granted certificates by the FAA in order to fly. Also, there are regulations on the exportation of UASs and related equipment. This restricts competition in the marketplace currently, however initiatives are in place, such as removing items from ITAR to put them onto CCL, which could alleviate such challenges in the future and lead to greater competition and hence greater growth in the UAV market. Another restraining factor for the UAS market is that technologies for efficient data exploitation and sense-and-avoid that will allow UAVs to operate in the same air space are still being developed.

While the UAS market is not expected to be affected by program cuts, and will perhaps benefit from cuts made elsewhere, there will certainly be an increased focus on spending. Price sensitivity will be more of a factor in all market segments including UASs as a result of the greater emphasis of the DoD on cost control.

EW Market Trends
As mentioned earlier, EW as a whole is probably the highest growth area for test and measurement manufacturers. They have witnessed increased investments in this area despite reduced defense budgets due to increased activity to jam signals, especially IEDs, and be able to identify and electronically disable them.

Frost & Sullivan research on the U.S. airborne and naval surface EW market, which excludes ground EW including IED EW and signal intelligence (SIGINT), highlights foreign adversary EW developments from China, North Korea, and Iran as a key driving factor for the growth of this market in the foreseeable future. “The expansion of China’s military budget is fueling the need to modernize EW programs and capabilities in the U.S.,” says John Hernandez, Senior Industry Analyst for Aerospace & Defense at Frost & Sullivan. “North Korea has been reported as developing an electromagnetic pulse bomb and having conducted jamming of global positioning devices in the South, while Iran unveiled two destroyers last year that were reportedly fitted with updated radars and advanced EW capabilities.” Frost & Sullivan Aerospace & Defense experts predict that the DoD will add EW attack capabilities to unmanned combat air vehicles to serve the needs of both Air Force and naval EW missions.

Moreover, modern EW capabilities are required by the Air Force to maintain an edge over adversaries and continue to improve radar and air defense networks. EA-18G performance for NATO forces in support of operation ODYSSEY DAWN reinforces the importance of effective EW capabilities. EA-18G Growler inventory will grow and military departments will opt to continue program funding for its EW upgrades. The JSF program includes modernized EW capability that includes next generation jammer (NGJ) capability. Controversy over the F-35 price tag only reinforces that it be equipped with state-of-the-art EW capabilities.

The next generation of jammers initiative, NGJ, is also expected to be a key driving factor for the U.S. airborne and naval EW market. Its success will set the standard for how the government expects companies to work together to meet defense requirements. Partnerships have taken a whole new meaning in the defense industry. A lot of the contract awards now involve several companies dividing up the work that has to be done among different vendors, allowing each one to participate at their level best.

At the same time, Frost & Sullivan research foresees reduced defense spending as a key restraining factor for this market over the next four years. Plagued with cost overruns and delays, the F-35 platform is bound to suffer from budget cuts. Any EW package design for a F-35 electronic variant may have to wait for testing to be completed.

Another factor expected to restrain the overall airborne and naval EW market is the shortage and retention of EW expertise.

Radar Market Trends
The radar market constitutes perhaps the largest revenue stream for test and measurement companies. An area in which test and measurement vendors are seeing significant activity has been around the use of ESA technology in advanced radars. “These are actively steered arrays that are made up of many transmit/receive (T/R) modules that are individual elements of an array, allowing users to steer the array, divide it into multiple beams,” says John Hansen, Senior Application Engineer for Agilent Technologies’ Electronic Measurement Group. Beyond the technological aspect, this is an important trend in the defense industry because it has historically been concerned with absolute performance and reliability for small quantities only, while the sheer number of T/R modules is staggering, translating into test throughput concerns in addition to performance and reliability objectives.

Frost & Sullivan research published in the early part of 2011 predicted stable funding for radar, with the procurement of Army programs as the priority. “Additional overseas contingency operations (OCO) spending requests centered on radar upgrades for fixed wing aircraft and unmanned aerial systems were expected,” says Brad Curran, Senior Industry Analyst with Frost & Sullivan’s Aerospace & Defense Business Unit. “The DoD was also expected to seek continued improvements in radar SWaP, bandwidth efficiency, detection, cross cueing to other types of sensors, and data collaboration.”

Driving factors for the market included the near end of service of the current fleet of manned airborne surveillance and reconnaissance platforms requiring reinvestments and radar systems led by the Navy’s P8. R&D activity in sensor fusion, open architectures, W band millimeter wave, non-jammable, high angular resolution moving target indication, ground penetrating and next generation over the horizon (OTH) radars was expected to drive this market growth over the next few years.

Cognitive radar based on knowledge aided computer processing was expected to enhance detection and target ID in the crowded frequency spectrum and complex interference and clutter environment. At the same time, research into power amplifier circuits and waveform optimization was expected to allow a wider use of the frequency spectrum and new designs.

The key restraint to the market was GPS and electro-optical/infrared technologies taking over air traffic control and surveillance and reconnaissance functions that once relied on radars and the continued radar cross-cueing of other sensors. In addition, the postponing of radar upgrades, such as for F-15E, and of radar maintenance for some naval aircraft and ships was expected to restrain the market over the forecast period (2011-2016).

On the technological side, the SWaP trend strikes again, limiting the use of radars on smaller platforms. In addition, the crowded RF spectrum was expected to limit operational flexibility and new architecture designs. Finally, there would be fewer platforms of all types. Future buys were expected to move away from high-end platforms towards proven and reliable designs that afford maximum jointness, mission flexibility, and the capability to be quickly and easily upgraded and integrated as COTS technology matures, in line with the overall themes discussed thus far in this article, including flexibility, cost reduction, and ability to evolve over time.

Test & Measurement Corner
The defense electronics market is a key market for many of the top test and measurement companies, including Agilent Technologies, Tektronix, Aeroflex, Anritsu, National Instruments, and LeCroy, etc. These companies have broad portfolios of solutions for defense electronics customers. An example of a recent product introduction for this market that can help address the challenges faced by defense customers highlighted earlier in this article is Agilent’s M1890A arbitrary waveform generator, offering a sample rate of 12 Gigasamples per second (GSa/s). “It allows customers to simulate very wide band signals that may be used by UAVs or radars as well as simulate spectrum. This product is able to simulate any kind of electromagnetic environment that might be encountered in the field,” says Hansen. “For example, while testing an IED defeat system, the user can simulate the background spectrum consisting of FM radio stations, cellular phones, cordless phones, etc. that may be polluting the spectrum behind the signal the user is looking for.”

Anritsu also continues to focus on developing high performance leading-edge test equipment that enables defense industry customers to assure the performance of their mission-critical components and systems. Anritsu's Marketing Manager for General Purpose products, Bob Buxton, emphasized that “the defense industry has always needed high performance test and measurement solutions “this continues to be true today, whether it be to solve the challenges of locating small slow-moving targets or Mach 2 airplanes”. Anritsu's flagship Vector Network Analyzer, the ME7838A, illustrates the company's commitment to performance covering frequencies from 40 kHz to 125 GHz and offering calibration and measurement stability of 0.1 dB over 24 hours in a compact and lightweight format.”

Another test and measurement company who has listened to customers in the defense market is Aeroflex, with the development of the Aeroflex Common Platform on which the 7200, 7300, 7100, GPSG-1000, ALT-8000 and S-Series products are based. The company leverages a synthetic software-defined test platform to generate the solutions customers are looking for, such as a radio test set or an avionic test set or a combination of both. “The flexibility and integration of different subsystems into one test platform has been the key aspect of the solution attracting customers,” says Marv Rozner, Vice President of Market and Business Development for Aeroflex. “For example, we just shipped 350 radio test sets to the U.S. Marine Corps for the Ground Radio Maintenance Automatic Test System (GRMATS) program with a solution based on our 7200 Configurate Automated Test Set. The ability of the solution to grow over time by adding other complementary capabilities such as GPS, SATCOM, data bus, or other testing capabilities, in addition to performance upgrades such as increased frequency, signal processing, etc. was critical in their buying decision.”

Enabling customers across various industries to improve their development and manufacturing processes, National Instruments is also helping defense customers decrease development times. The company has been involved in HIL applications. For instance, National Instruments’ PXI solution was used by FADA-CATEC to test UAV guidance navigation and control (GNC) solutions in the early stages of development. A comparison was performed that demonstrated the accuracy and similarity of the HIL test environment with real-world results. Performance, flexibility and SWaP are also trends which National Instruments is very familiar with and an expert at addressing. Among other projects, the company was involved in the development of an ozone instrument on the Global Hawk UAV. The company’s CompactRIO solution was used to provide the command, control and communication for the UAS ozone instrument payload. The processing speeds, low power consumption, ruggedness, and compactness of CompactRIO were key aspects for the success of the project. In line with the themes discussed throughout this article, the company’s PXI solution was leveraged by KOR Electronics to develop a low-cost EW simulator for the military services that not only was modular, flexible and expandable but also leveraged COTS technologies.

“There is a wonderful coincidence of timing here, summarizes Larry Desjardin, president of Modular Methods LLC. While the services and defense industry need smaller and more flexible instrumentation, the commercial test industry is embracing modular instrument standards, like PXI and AXIe, that deliver exactly that. The latest product announcements from Aeroflex, Agilent, and National Instruments show that these platforms deliver more than me-too capability. It's a win-win for the industry.”

Conclusion
Despite lower defense spending for the next few years, the defense industry simply can’t afford to scale back on performance and reliability. Such times call for true innovation. Test and measurement companies have realized that and are ready to help the defense industry meet its number one challenge of continuing to improve performance, pushing technological barriers further, while reducing costs.

References
U.S. DoD Unmanned Aerial Systems (NA4A-16), February 2012.
U.S. Airborne and Naval Surface Electronic Warfare Market (N9C3-16), December 2011.
U.S. DoD Radar Markets (N84A-16), April 2011.
High-growth Test and Measurement Market Opportunity: Modular Instruments (N946-30), September 2011.
Analysis of the Signal Generator and Arbitrary Waveform Generator Market (N903-30), December 2011.

Frost & Sullivan

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