A Turn Around on the Horizon for Mil/Aero


The military and aerospace electronics industry has perhaps received the shot in the arm required to turn the market back to growth.  Even prior to the results of the American Presidential election, which most argue will be beneficial to defense and space OEMs, several large manufacturers have provided upbeat guidance on the coming year.

In its recent financial release, Lockheed Martin has announced that 2017 revenue is expected to outperform this year by 7 percent.  Boeing is reporting robust backlog and has revised guidance for this year upward by $500 million driven by improved delivery for commercial aircraft and higher than expected revenue for military aircraft.  These market expectations are of course contingent on ongoing support of existing programs that the companies are engaged in.

Most of the other top manufacturers such as Raytheon and General Dynamics continue to see improvements in the market, but credit improved operations for growth in the current quarter.  It appears that the somewhat flat market conditions are about to transition out, much in the same way as the current US government administration.

Nearly all the top OEMs are continuing to invest and innovate in key growth areas of this market including cyber security, terrorism deterrents and modernization of the existing nuclear defense systems.  In vertical segments opportunity continues to gain momentum for aircraft production as well as smaller technology application areas such as drones and unmanned ground vehicles which have application in both the military and in commercial markets.

Semiconductors used in this market make up a small percentage of global revenue, but with other markets ending 2016 with less than stellar results, it is good news to the suppliers that are also competing in mil/aero.  This year, the market for semiconductors in the military and aerospace market is expected to remain around $2.8 billion but with improved market conditions moving forward revenue is expected to grow by 8 percent reaching over $3 billion by next year.

For more information on the latest market conditions for semiconductors used in military and aerospace applications and other semiconductor market research, please visit www.databeans.net and Know Your Market.