GUEST BLOG: Worldwide Market for Warships and Submarines
BlogNovember 29, 2023
Ray Alderman
VITA Standards Organization
WARFARE EVOLUTION BLOG. In previous episodes, we explored the two largest military platform markets: ground combat vehicles and tanks, and fighter planes and bombers. This time, we’ll take a look at the third market for big iron: warships and submarines. I’m going to throw a lot of numbers around in this composition but don’t take them as absolute. Warships sink all the time (Ukraine has sunk or damaged 17 Russian ships in the war so far), and shipyards are launching a new warship now and then. So, look at these numbers as estimates. Let’s start from the top.
There are 195 countries in the world today. According to Global Firepower, 115 of those have a navy and operate warships. There are 44 countries that are landlocked in Europe, Asia, Africa, and South America (no access to an ocean) but 16 of those have navies that patrol their rivers and lakes with small boats. The U.S. has 17.9% (484) of the world’s big military ships, but that includes tankers, amphibious landing ships, destroyers, cruisers, frigates, corvettes, aircraft carriers, and submarines. That suggests that there are 2,704 large military ships in the world today (484/0.179= 2,703.9), but that number omits all the smaller patrol boats. We’ll deal with that later.
According to GlobalData (a market research company), the worldwide market for naval vessels and surface combatants is $44.2 billion in 2023, growing to $65.8 billion by 2033. That’s a compound annual growth rate (CAGR) of 4.1%.
Aircraft carriers are the best place for us to start. There are 22 aircraft carriers in the world today, operated by seven countries. The U.S. operates 11. The rest with two a piece are China, India, Italy, the United Kingdom (U.K), and France. Russia has one. Putting Russia on this list is a stretch: their Admiral Kuznetsov carrier has been tied up at the dock for six years undergoing extensive repairs. There are sseven countries with new carriers in design or construction: U.S., China, India, Russia, South Korea, France, and Turkey. It takes five to six years to build a new carrier and bring it into service. The cost to build a nuclear powered Ford-class carrier in the U.S. is $13 billion. Smaller oil-fired carriers can be built faster and cheaper.
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Only the U.S. and France operate nuclear powered carriers today. Three U.S. carriers are under construction now. The USS John F. Kennedy will be delivered in 2025. The USS Enterprise and USS Doris Miller are under construction. France will start their new carrier construction in 2026. The other countries are still in the planning stages.
That leads us into the next classes of surface warships: cruisers, destroyers, frigates, and corvettes. There are 14 countries that operate cruisers and destroyers. Only three of those countries are in Europe (U.K., Italy, and France), and six countries are in the Pacific (India, Australia, Taiwan, South Korea, Japan, and China). The distribution of cruisers and destroyers by country show how Pacific nations are more concerned about defending themselves in a sea war. Countries buy the appropriate weapons platforms for the threats they perceive.
For what’s happening in the U.S., we are compelled to examine the latest U.S. Navy fleet plan (as of November 2023). The plan specifies 104 large surface combat ships. Today, we have 86 (13 Ticonderoga-class cruisers and 73 Arleigh-Burke class destroyers). No new cruisers are in the plan. The cruisers presently in service will be replaced by the latest generation A-B class destroyers starting in 2027. Out of the 104 large surface combatants, 84 will be Arleigh-Burke destroyers. Contracts for the first ten ships were issued in September to two shipyards (Huntington Ingalls and Bath Iron Works). It takes about four years to build a destroyer, and they cost about $2 billion each.
The only country in the Eurpean Union (E.U.) building a new destroyer is Italy, scheduled for delivery in 2028. The U.K. is planning for a new destroyer (Type-83). The remaining E.U. countries are just upgrading their present ships. In the Pacific, Japan is planning to build two large destroyers (nearly as big as a cruiser) for missile defense against North Korea and China. GlobalData’s latest research report says the worldwide market for destroyers was $9.5 billion in 2023, growing to $14.3 billion by 2033, a 5.4% CAGR.
The keel for the first U.S. missile frigate (FFG-62) was laid in August and will be delivered in 2026. According to the Navy’s plan, 20 frigates will be built and join the 84 A-B destroyers (for a total of 104 ships). The Constellation-class frigates cost a little more than $1 billion each and take 18 to 24 months to build. Frigates are smaller, faster, and more maneuverable than destroyers. There are about 411 frigates in the world today, operated by 55 countries: 15 countries in the Pacific and 12 in Europe. The rest are scattered around in the Middle East and South America.
Plans for new corvettes (smaller and faster than frigates) will probably show up as unmanned surface vessels (USV) in the U.S. Navy’s fleet plans, but that’s a different subject. However, there are about 403 manned corvette ships in the world today, operated by 46 countries. They are lightly armed and typically used for coastal defense. They don’t venture into blue water very often. Back in 2019, Italy and France started the EPC project (European Patrol Corvette). Greece and Spain have both joined the effort (Portugal is observing). The plan is to lay the keel on the first EU corvette in 2026 with deliveries starting in 2030. Portugal, Sweden, Finland, Germany, Greece, India, Israel, and Turkey are looking at acquiring new corvettes. From what I can tell, since corvettes are smaller ships, they can be built faster and cheaper than frigates.
That brings us to the bottom of the ship markets: small patrol boats used in brown water and green water. According to Markets.US (a market research company), the worldwide market for patrol boats will grow from $21.2 billion in 2023 to $40.5 billion by 2033, a CAGR of 6.7%. However, their numbers include boats used for anti-smuggling operations, local police craft, immigration authorities, and the military. For military applications in small countries, they might be armed with a few deck-mounted machine guns. For very small countries with very small navy budgets, they can buy the Poloz-M16 2-man assault kayak with a NATO UAG-40 grenade launcher mounted on the bow for about $2,500. That’s better than a row boat and a rifle.
The final category is submarines. There are about 505 submarines in the world today, operated by 43 countries (according to Gobal Firepower). The top five countries with the most submarines are China, Russia, U.S., North Korea and South Korea (in that order). Six countries operate 104 nuclear-powered subs today: U.S. (71) Russia (11), U.K. (seven), France (six), China (six), and India (two). The remaining 400 submarines in the world are diesel-powered. All U.S. submarines are nuclear powered.
The 71 U.S. submarines are divided into 53 fast attack subs (SSN), 14 ballistic missile subs armed with nuclear warheads (SSBN), and four guided missile subs, each armed with 154 Tomahawk cruise missiles (SSGN). These subs are a mixture of classes (based on how they are outfitted). The SSNs are a mixture of Los Angeles class, Seawolf class, and Virginia class. As many as five of these subs could be sold to Australia (under the AUKUS agreement). The older Los Angeles and Seawolf class boats would be retired and replace by 66 new Virginia class boats. There are nine new Virginia-class SSNs in various stages of construction today. It takes more than five years to build a Virginia class submarine and they cost about $4.3 billion each. Planning is now underway for the next generation attack sub: SSN(X).
The 12 Ohio class SSBN nuclear missile submarines will be replaced by the new Columbia class. The keel was laid for the first Columbia boat in 2020, with delivery planned for 2027. They cost just over $9 billion each. The remaining four SSGN Tomahawk missile subs will stay in the fleet until retirement. The U.S. Navy fleet plan calls for a total of 78 submarines by the 2050s: 66 SSN fast attack subs (Virginia class) and 12 SSBN nuclear missile subs (Columbia class).
Poland, Norway, and Netherlands are forming a group to collectively buy new submarines (and get a price break). The U.K. is designing the next generation of their subs with Australia and the U.S. (called SSN-AUKUS). Looks like France will be joining the AUKUS group. Germany is building three new subs for Israel and six for India. Italy is building two new subs for their navy. Sweden has two new subs on order, to be delivered in 2027 and 2028. Germany is also building six additional submarines, four for Norway and two for the German navy, to be delivered starting in 2029. All these are diesel-powered subs to be used for maritime defense.
Taiwan launched their first domestically-made submarine in September. They have seven more on order. Japan launched their new Taigei class submarine and have another under construction. They plan to build four more and are interested in joining the AUKUS submarine program. The Philippines is planning on buying two new subs. Indonesia is buying two new subs from France. Thailand is looking into buying new submarines. I may have missed a few sub deals here and there, but you get the general idea. According to GlobalData, the world market for military submarines was $30 billion in 2021, growing to $45 billion by 2033, a CAGR of 4.3%.
So, let’s compare what we see here with what we learned about the ground combat vehicle/tank market, and the fighter plane/bomber market in previous articles. Thousands of ground combat vehicles and tanks will be built over the next few years, and that market is growing at a 7% CAGR. It takes a few months to build a tank or ground combat vehicle. Hundreds of fighter planes and bombers will be built over the next few years, and that market is growing at about 4.3% CAGR. It could take many months to build a fighter plane, and a year for a bomber. Maybe 20 or 30 big warships will be built over the next few years, and that market is growing at about 4.1% CAGR. It takes one and a half to six years to build corvettes, frigates, destroyers, carriers, or submarines. Here’s an observation: if you are selling sophisticated electronic systems for military ships (radar, sonar, electronic warfare, weapons fire control, communications, etc), you might have a problem. The only components the warship industry buys in volume are steel, welding rods, and grey paint.
I said at the beginning not to take these numbers as absolute, Let me give you my reasons. Worldwide capacity to build warships is limited and very difficult and expensive to expand, so volumes are not likely to grow. Also, consider that it takes three years to refuel and overhaul a nuclear aircraft carrier (RCOH, refuel and complex overhaul), one to two years to refuel a nuclear submarine, and months to overhaul a destroyer (depending on the work required). Maintenance of these big ships takes up scarce dock space.
Second, any glitches in the supply chain could significantly increase the time required to build these big warships. Third, if inflation hangs around longer, the cost to build these big ships will increase substantially, possibly leading to cancellations. Finally, world economic conditions are deteriorating, so the plans countries have for building the ships and submarines mentioned above could be delayed. On the surface, this looks like a very challenging market for suppliers.
So, there you have it. We have now taken a cursory look at the three “big iron” military platform markets, to get a general idea about what is going on, and you got it for free here on the Military Embedded Systems website. Digging much deeper into these segments would take hundreds of hours of research, or thousands of dollars to buy the market research reports. Both those options are above my pay grade.
There are three more military market segments we need to explore: military satellites, UAVs (unmanned aerial vehicles), and unmanned naval vessels (UNVs). From what I can tell so far, over the next few years we will be building more UAVs than ground combat vehicles and tanks, more satellites than fighter planes and bombers, and more UNVs than manned warships and submarines. I don’t know which market to investigate next. I’ll have to do some study and see what crystallizes.
