That's the prediction from market researcher Teal Group Corp. in Fairfax, Va. Teal analysts say the top U.S. defense electronics prime contractors over the next 10 years, in order of the anticipated value of their contracts over the period, are:
-- Lockheed Martin Corp. in Bethesda, Md.;
-- Raytheon Co. in Waltham, Mass.;
-- Northrop Grumman Corp. in Falls Church, Va.;
-- BAE Systems in London;
-- General Dynamics Corp. in Falls Church, Va.;
-- L-3 Communications in New York;
-- Exelis Inc. in McLean, Va.;
-- Boeing Co. in Chicago;
-- DRS Technologies Inc. in Arlington, Va.;
-- Telephonics Corp. in Farmingdale N.Y.; and
-- FLIR Systems Inc. in Wilsonville, Ore.
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Teal released portions of their annual Manufacturers Market Shares Overview this week at the Association of the U.S. Army (AUSA) conference and trade show in Washington. The full report will be released later this month.
Over the next decade Lockheed Martin, Raytheon, and Northrop Grumman will dominate the defense electronics market, together earning slightly more than 40 percent of prime defense electronics contracts that will total $373.4 billion, Teal analysts say.
Lockheed Martin will lead with $52.5 billion in total defense electronics prime contracts, based on leadership in command, control, communications, computers and intelligence (C4I), says David Rockwell, Teal Group's senior electronics analyst and author of the manufacturer market shares overview.
Lockheed Martin will have "dominant positions in electro-optics (EO) due to airborne fighter and attack helicopter targeting system markets, and in sonar due to A-RCI (Acoustics-Rapid COTS Insertion)," Rockwell says. Lockheed martin also will hold a solid third in the radar market based on the naval AN/SPY-1 Aegis system, Rockwell says.
Raytheon will place second in the defense electronics prime contracting sweepstakes over the next 10 years with $51.6 billion, analysts say. Raytheon will place number one in radar, second in C4I and sonar, and third in EO.
One caveat to Teal's 10-year defense electronics forecast involves the F-35 Lightning II Joint Strike Fighter (JSF), on which Lockheed Martin, Raytheon, and Northrop Grumman have substantial electronics contracts.
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Although Teal analysts predict high-volume series production of the F-35 over through 2023, "if JSF dies or production is seriously truncated, Raytheon will likely vault back into a dominant first place in electronics," Rockwell says.
Northrop Grumman will be in third place for defense electronics prime contracting over the next 10 years with an expected $47.9 billion in prime funding, Rockwell says. Northrop Grumman will have dominant positions in military electronic warfare (EW), EO, and radar contracting.
BAE Systems will follow in fourth with $15.8 billion in defense electronics prime contracts -- $12.5 billion of that from electronic warfare, Teal analysts say.
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In fifth place is expected to be General Dynamics with an expected $10.4 billion in defense electronics prime contracts, due almost entirely to C4I work.
In sixth place in defense electronics prime contracting over the next 10 years is expected to be L-3 Communications with $6.8 billion, followed by Exelis with $3.9 billion; Boeing with $3.1 billion; DRS Technologies at $3 billion; Telephonics with $2.1 billion; and FLIR Systems with $2 billion, Teal analysts say.
Many companies, especially outside the Big Three will earn considerable additional funding as subcontractors, Rockwell says. For more information contact the Teal Group online at www.tealgroup.com.
