Search, Detection, Navigation & Guidance System Manufacturing
Description
Companies in this industry make products such as aircraft instruments, flight recorders, navigational instruments, and radar and sonar systems. Major companies include FLIR and divisions of defense contractors such as Boeing, General Dynamics, Northrop Grumman, and RTX Corporation (all based in the US), as well as Airbus Group (the Netherlands), BAE Systems (the UK), Bharat Electronics (India), Furuno Electric (Japan), and Thales (France).
The US and China continue to lead in overall defense expenditures, according to PricewaterhouseCoopers (PwC). Additionally, both Israel and Russia have significantly increased their purchases. Global aerospace and defense revenue, a key demand driver for search, detection, navigation, and guidance systems, had a revenue of about $920 billion in 2024. According to Deloitte, although travel demand is slow, the global aerospace and defense industry is expected to recover as countries have not significantly reduced their defense budgets.
The US search, detection, and navigation equipment manufacturing industry includes about 550 companies with combined annual revenue of about $50 billion. Production of GPS equipment is covered in the Wireless Telecommunications Equipment Manufacturing industry profile.
COMPETITIVE LANDSCAPE
Demand depends on discretionary consumer income, general economic conditions, and federal budgets for defense and homeland security. Large companies have advantages in purchasing power, manufacturing volume, and distribution efficiencies. Small companies compete by offering specialized products and providing subcontracting services to larger system integrators. The US industry is highly concentrated: the largest 50 firms account for about 96%.
In 2024, the US exported about $2.5 billion in navigation equipment, according to The Observatory of Economic Complexity (OEC). The main destinations include Mexico, Canada, Japan, Saudi Arabia, and Australia. Meanwhile, the US imported navigation equipment products from Mexico, China, Taiwan, Canada, and Germany.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include search, detection, navigation, and guidance systems, which account for about 75% of the industry revenue. Other products include aeronautics, nautical, and navigational instruments account (about 20%) and airframe equipment instruments (about 5%). Military applications include most of these products, along with radar defense systems.
Radar was discovered in the late 1800s. Many advancements have been made in the technology, but the underlying scientific principle remains: a radio (electromagnetic) signal traveling at the speed of light is emitted from a transmitter and, when a solid object is in its path, the signal rebounds (echoes) off the solid object and returns to a receiver. The direction and time required to receive the echo is used to calculate the exact location, distance, and speed of the object.
Sonar operates under a similar principle, employing sound waves that travel much slower than radio waves. Sonar, therefore, typically is good for underwater search and detection applications where slow moving ships, fish, or permanent objects are targets.
Thermographic technology detects and measures variations in heat emissions and transforms them into visible signals that can be recorded photographically. Thermal imaging devices are used to identify, locate, and inspect people and objects in a variety of commercial, industrial, and military settings. Applications include search and rescue, surveillance and reconnaissance, security, equipment monitoring, and narcotics detection.
Raw materials and parts used in the manufacturing process include printed circuit boards; receivers; transmitters; semiconductors; liquid crystal displays; miscellaneous components and accessories for electronic circuitry; sheet metal; and other metal assemblies, primarily of aluminum and steel. Raw material costs are about one-third of revenues.
Commercial products are typically built to stock with emphasis on low cost. Manufacturing processes are highly automated for smaller stationary and portable units. The manufacturing process involves assembling and integrating parts (receivers, transmitters, controllers, switches, screens and monitors), followed by enclosing contents in metal or plastic covers. Quality is checked using statistical testing.
Large systems for defense applications are custom-made and may take several years to manufacture to complex design specifications. Prime contractors often use subcontractors to fill an order. Due to extended development and manufacturing times, contracts may be awarded in phases. The government monitors, inspects, and signs off on periodic progress reviews and awards progress payments. Subsequent phases proceed based on satisfactory performance to date. Some projects involve leading-edge technology developments, so the initial contract award is for R&D only. Upon successful proof of concept, the company is then awarded a manufacturing contract as the next step of a multi-phase contract.
Company R&D drives revenues. Commercial manufacturers bring many new products to market annually via new additions, upgrades, and modifications to existing technologies. Companies may benefit from R&D paid for by government agencies.
The US and China continue to lead in overall defense expenditures, according to PricewaterhouseCoopers (PwC). Additionally, both Israel and Russia have significantly increased their purchases. Global aerospace and defense revenue, a key demand driver for search, detection, navigation, and guidance systems, had a revenue of about $920 billion in 2024. According to Deloitte, although travel demand is slow, the global aerospace and defense industry is expected to recover as countries have not significantly reduced their defense budgets.
The US search, detection, and navigation equipment manufacturing industry includes about 550 companies with combined annual revenue of about $50 billion. Production of GPS equipment is covered in the Wireless Telecommunications Equipment Manufacturing industry profile.
COMPETITIVE LANDSCAPE
Demand depends on discretionary consumer income, general economic conditions, and federal budgets for defense and homeland security. Large companies have advantages in purchasing power, manufacturing volume, and distribution efficiencies. Small companies compete by offering specialized products and providing subcontracting services to larger system integrators. The US industry is highly concentrated: the largest 50 firms account for about 96%.
In 2024, the US exported about $2.5 billion in navigation equipment, according to The Observatory of Economic Complexity (OEC). The main destinations include Mexico, Canada, Japan, Saudi Arabia, and Australia. Meanwhile, the US imported navigation equipment products from Mexico, China, Taiwan, Canada, and Germany.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major products include search, detection, navigation, and guidance systems, which account for about 75% of the industry revenue. Other products include aeronautics, nautical, and navigational instruments account (about 20%) and airframe equipment instruments (about 5%). Military applications include most of these products, along with radar defense systems.
Radar was discovered in the late 1800s. Many advancements have been made in the technology, but the underlying scientific principle remains: a radio (electromagnetic) signal traveling at the speed of light is emitted from a transmitter and, when a solid object is in its path, the signal rebounds (echoes) off the solid object and returns to a receiver. The direction and time required to receive the echo is used to calculate the exact location, distance, and speed of the object.
Sonar operates under a similar principle, employing sound waves that travel much slower than radio waves. Sonar, therefore, typically is good for underwater search and detection applications where slow moving ships, fish, or permanent objects are targets.
Thermographic technology detects and measures variations in heat emissions and transforms them into visible signals that can be recorded photographically. Thermal imaging devices are used to identify, locate, and inspect people and objects in a variety of commercial, industrial, and military settings. Applications include search and rescue, surveillance and reconnaissance, security, equipment monitoring, and narcotics detection.
Raw materials and parts used in the manufacturing process include printed circuit boards; receivers; transmitters; semiconductors; liquid crystal displays; miscellaneous components and accessories for electronic circuitry; sheet metal; and other metal assemblies, primarily of aluminum and steel. Raw material costs are about one-third of revenues.
Commercial products are typically built to stock with emphasis on low cost. Manufacturing processes are highly automated for smaller stationary and portable units. The manufacturing process involves assembling and integrating parts (receivers, transmitters, controllers, switches, screens and monitors), followed by enclosing contents in metal or plastic covers. Quality is checked using statistical testing.
Large systems for defense applications are custom-made and may take several years to manufacture to complex design specifications. Prime contractors often use subcontractors to fill an order. Due to extended development and manufacturing times, contracts may be awarded in phases. The government monitors, inspects, and signs off on periodic progress reviews and awards progress payments. Subsequent phases proceed based on satisfactory performance to date. Some projects involve leading-edge technology developments, so the initial contract award is for R&D only. Upon successful proof of concept, the company is then awarded a manufacturing contract as the next step of a multi-phase contract.
Company R&D drives revenues. Commercial manufacturers bring many new products to market annually via new additions, upgrades, and modifications to existing technologies. Companies may benefit from R&D paid for by government agencies.
Table of Contents
- Industry Overview
- Quarterly Industry Update
- Business Challenges
- Business Trends
- Industry Opportunities
- Call Preparation Questions
- Financial Information
- Industry Forecast
- Web Links and Acronyms
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