Submarine Combat System Market - By System, By Installation, By End Use & Forecast, 2024 - 2032

Submarine Combat System Market Size

The global submarine combat system market was valued at USD 11.4 billion in 2023 and is estimated to grow at a CAGR of 7.2% from 2024 to 2032.
 

As geopolitical tensions rise, many nations are increasing their defense spending, focusing heavily on naval capabilities, including submarine fleets. This is driven by the need for deterrence and defense in disputed regions like the South China Sea, the Arctic, and the Indian Ocean.
 

For instance, in August 2024 the Russian Navy commands one of the world's largest submarine fleets with 64 vessels, including 16 nuclear-powered ballistic missile submarines (SSBNs) vital to its strategic deterrence. Despite financial struggles after the Soviet Union's collapse, Russia has modernized its submarine force significantly, enhancing its naval capabilities in recent years. Countries such as the U.S., China, India, and Russia are expanding their submarine fleets. These larger budgets are fueling growth in submarine combat system procurement, including advancements in weaponry, sonar systems, and stealth technologies, which are boosting global market demand.
 

Rapid innovations in stealth technology, autonomous systems, and artificial intelligence (AI) are transforming submarine combat systems. These advancements allow submarines to perform complex missions with less risk of detection. Integrating AI into fire control, sonar, and electronic warfare systems increases efficiency and reduces crew workload. For instance, the Navy's AI team is utilizing artificial intelligence to predict and counter undersea threats, while AI-enabled drones are actively conducting surface and sub-surface missions, marking significant advancements in submarine operational capabilities. Autonomous underwater vehicles (AUVs) complement submarines for reconnaissance and surveillance, further strengthening underwater capabilities. Enhanced stealth features, like improved sound insulation and propulsion systems, are also driving demand, as nations seek to deploy submarines with better survivability in hostile environments.
 

Submarine Combat System Market Trends

Rapid technological advancements and the evolving landscape of naval warfare are driving significant changes in the submarine combat system industry. A prominent trend is the growing incorporation of artificial intelligence (AI) and autonomous systems. AI enhances threat detection, refines decision-making, and streamlines mission planning. Simultaneously, autonomous underwater vehicles (AUVs) conduct reconnaissance and surveillance, safeguarding human lives.
 

For instance, In October 2023, at the Indian Navy's Naval Innovation Seminar, India unveiled its Autonomous Weaponized Boat Swarms and Autonomous Underwater Vessel (AUV) technology. The announcement came with a confirmed partnership with Sagar Defense Engineering and an approved procurement of 30 AUVs, marking a significant leap in India's submarine combat and naval prowess. These AI-enhanced systems are transforming undersea warfare, bolstering sonar, fire control, and communication capabilities. Additionally, as nations strive to make submarines less detectable, the demand for stealth technologies aimed at reducing acoustic signatures continues to surge.
 

Another pivotal trend centers on multi-domain operations and interoperability. Today's combat systems are crafted for seamless integration with diverse military assets, including surface ships, aircraft, and satellites. For instance, In August 2024, the U.S. Navy's newest attack submarine, the future USS IDAHO (SSN 799), was launched from General Dynamics Electric Boat’s shipyard into the Thames River. This "float off" signified a pivotal construction milestone, with the submarine entering the water for its final outfitting, testing, and crew certification, moving closer to operational deployment. This synergy facilitates coordinated operations spanning air, sea, and space. Such interconnectedness elevates the submarine's role in naval strategies, encompassing everything from strategic deterrence to tactical maneuvers.
 

Moreover, geopolitical tensions, especially in the Asia-Pacific and Europe, are propelling upgrades to existing submarine fleets. Nations are keen to bolster their anti-submarine warfare (ASW) capabilities and modernize naval forces, driving robust market growth in response to emerging threats.
 

Submarine Combat System Market Analysis

High development and maintenance costs significantly restrain the market, making it less accessible for smaller nations. Lengthy procurement cycles and potential delays further slowdown the adoption of advanced technologies. However, these challenges open doors for innovation, such as creating cost-effective solutions and modular systems that allow for gradual upgrades. Additionally, the growing importance of cybersecurity offers specialized companies the chance to provide advanced protection against increasing threats in network-centric submarine operations.
 

Based on installation, the market is segmented into new, retrofit/ upgrade. In 2023, the new segment accounted for the largest market share with over 85% share.
 

The new installation segment in the submarine combat system market is driven by rising naval modernization efforts and the procurement of next-generation submarines. Many countries, especially in Asia-Pacific and Europe, are expanding their fleets with cutting-edge combat systems to enhance naval capabilities. This segment benefits from advancements in technologies like AI, autonomous systems, and integrated C4ISR, ensuring that newly built submarines are equipped with state-of-the-art defense systems.
 

Additionally, new installations offer an advantage in terms of system integration, as they are designed from the ground up to accommodate the latest technologies. Unlike retrofit systems, new installations can seamlessly integrate advanced weapon systems, sonar, and navigation tools, maximizing operational efficiency. Increased global defense budgets and heightened maritime security concerns continue to fuel demand in this segment.
 

Based on end-use, the market is divided into conventional nuclear, others. In 2023, the nuclear segment is the fastest growing segment with a CAGR of over 8.7%.
 

The strategic significance of nuclear-powered submarines (SSNs and SSBNs) fuels the growth of the nuclear segment in the market. With enhanced endurance, stealth, and operational range, these submarines serve as pivotal assets for deterrence and prolonged underwater missions. Nations including the U.S., Russia, China, and India are making substantial investments to upgrade or expand their nuclear submarine fleets. These upgrades include the integration of cutting-edge combat systems, such as long-range missiles, AI-driven navigation, and advanced sonar technologies.
 

Given their capability to undertake extended missions lasting months without surfacing, nuclear submarines demand highly sophisticated combat systems. These systems empower nuclear submarines to conduct surveillance, reconnaissance, and strategic deterrence operations, even in hostile settings. The focus on nuclear deterrence and maritime supremacy, especially in areas like the Asia-Pacific and Arctic, propels the demand for advanced and resilient combat systems, specifically designed for these formidable underwater assets.  
 

In 2023, the North America market held the largest share of over 35%, and it is predicted that it will hold its dominant position throughout the forecast period. In North America, the U.S. leads the submarine combat system market, bolstered by significant defense budgets and ongoing naval modernization. The U.S. Navy is channeling investments into next-gen nuclear-powered submarines, including the Virginia-class and Columbia-class, and is embedding state-of-the-art technologies such as AI, cybersecurity, and autonomous systems. Industry frontrunners, General Dynamics Electric Boat and Lockheed Martin, are at the forefront of innovations in combat management systems, sonar, and stealth technologies. Rising geopolitical tensions and competition with global powers, notably China and Russia, intensify U.S. efforts to uphold its naval dominance in undersea warfare.
 

China is heavily investing in submarine combat systems as part of its naval modernization, focusing on increasing its submarine fleet for strategic deterrence and power projection. With ongoing territorial disputes in the South China Sea, China is enhancing its capabilities in stealth, anti-submarine warfare, and AI-driven systems. The People's Liberation Army Navy (PLAN) is building more nuclear-powered and diesel-electric submarines, positioning itself as a key player in submarine warfare and boosting regional naval dominance.
 

Japan is prioritizing the development of advanced submarine combat systems to strengthen its self-defense capabilities, particularly against regional threats like China and North Korea. The country is focusing on stealth technology, sonar systems, and anti-submarine warfare (ASW) capabilities. Japan’s fleet of diesel-electric submarines, including the Soryu-class, is being modernized with cutting-edge combat systems. The government’s emphasis on autonomous technology and AI integration is also driving growth in this sector.
 

Germany is a key player in the global submarine market, known for its highly advanced diesel-electric submarines, particularly the Type 212 and 214 class. The country focuses on developing cutting-edge stealth technology, sonar systems, and fuel cell-powered propulsion for increased underwater endurance. German defense companies, like ThyssenKrupp Marine Systems, are actively innovating in submarine combat systems, which are sought after by NATO allies and other international customers, boosting market presence.
 

South Korea is rapidly enhancing its submarine capabilities due to rising tensions with North Korea. The country is investing in advanced diesel-electric submarines, such as the KSS-III, equipped with state-of-the-art sonar, missile systems, and stealth technologies. South Korea is also focusing on developing indigenous submarine combat systems, including AI-enabled solutions and autonomous systems, aiming to reduce reliance on foreign technologies and boost its domestic defense industry in response to regional security concerns.
 

Submarine Combat System Market Share

The submarine combat system industry is highly competitive, with major players like General Dynamics, Lockheed Martin, and Raytheon constantly innovating to enhance their systems with AI, advanced sonar, and stealth technologies. Companies like Atlas Elektronik, Kongsberg Gruppen, and Thales Group focus on developing cutting-edge sensors and autonomous systems, while BAE Systems and Leonardo S.p.A. leverage their partnerships and defense contracts to expand market reach.
 

Others, such as Thyssenkrupp Marine Systems, Naval Group, and Mazagon Dock, offer specialized submarine platforms, with customized solutions from Havelsan and Safran that address unique customer needs. Damen Shipyards and Huntington Ingalls maintain competitive advantage through efficient production and strong after-sales support, catering to the evolving demands of global naval forces.
 

Submarine Combat System Market Companies

Major players operating in the industry are:

• Atlas Elektronik GmbH
• BAE Systems PLC
• DCN Intl
• General Dynamics Corporation
• Havelsan Inc.
• Huntington Ingalls Industries Inc.
• Kongsberg Gruppen ASA
• L3Harris Technologies Inc.
•  Leonardo S.p.A.
• Lockheed Martin Corporation
• Mazagon Dock Shipbuilders Limited
• Naval Group
• Raytheon Company
• Saab AB
• Safran
• Thales Group
• Thyssenkrupp Marine Systems
   

Submarine Combat System Industry News

• In March 2024, Indonesia has selected Naval Group and PT PAL to bolster its navy with two Scorpene Evolved submarines powered by full lithium-ion batteries. These advanced submarines will be constructed at PT PAL’s shipyard in Indonesia, facilitated by a technology transfer from Naval Group, enhancing local shipbuilding expertise and defense capabilities.
   
• In January 2024 Lockheed Martin, the Pentagon's top weapons supplier, has secured a $312 million contract modification for advancing submarine electronic warfare systems. The contract covers design, testing, and production of the AN/BLQ-10 system for Technical Insertions 20, 22, and 24. All work will be conducted in Syracuse, New York, with completion expected by February 2029.
   

This submarine combat system market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Million) from 2021 to 2032, for the following segments:

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Market, By System

• Command and control system
• Sonar systems
• Torpedo and missile launch systems
• Electronic warfare (EW) systems
• Combat management system (CMS)
• Communication systems
• Navigation and fire control system
• Others

Market, By Installation

• New
• Retrofit/ Upgrade

Market, By End Use

• Conventional
• Nuclear
• Others

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • Australia 
• Latin America
  • Brazil
  • Mexico 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa