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Boom decade seen for U.S. electronic warfare business

SPECIAL TO WORLD TRIBUNE.COM
Saturday,February 17, 2001
WASHINGTON —The U.S. electronic warfare market is expected to grow rapidly
over the next decade. Market analysts expect the Pentagon to sign
multi-billion dollar contracts for systems. Foreign sales are also expected
to increase.

The Forecast International/DMS predicts that the EW market will be fueled by
upgrades of land, air and sea systems. The Newtown, Conn. firm said that
platforms are becoming too expensive to replace.

"The next 10 years are definitely the decade of production and procurement
for the U.S. defense electronics market," Forecast International/DMS analyst
Richard Sterk said. "Based on current production alone, defense electronics
is predicted to generate nearly $128 billion in forecast sales, averaging
about $12 billion a year."

In its annual review of the U.S. defense electronics market, Forecast
International/DMS said many of the next-generation defense electronics
systems developed in the late 1990s are now being produced and deployed.

This latest production run is expected to continue until at least 2015. The
result is that the EW market will become the healthiest and most profitable
segment within the overall U.S. defense industry, the report said. The firm
said procurement will surge in 2005 to $13.9 billion as the newest versions
of military electronics equipment begin deployment. The following two years
will be the peak and from 2008 a slight drop is expected.

"Over the next 10-year period a frenzy of electronic equipment procurement,
upgrades, and modernization is forecast," Sterk said.

By 2010, the report said, the U.S. defense market will level off at $10.9
billion. For the next decade, production lines will be running at full speed,
producing the latest high-tech equipment.

At that point, the market will decrease as money is pumped into research and
development for more advanced systems. The firm said U.S. contractors must
keep their systems affordable with advanced capabilities and off-the-shelf
components.

"Systems and products will need to be modular and easily adapted to different
wants and changing requirements, and upgrades a matter of months, not years,"
Sterk said.




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