The Impact of the Top 3 Strategic Imperatives on the Global Anti-tank Missile Industry

Geopolitical Chaos

Why

• The challenge in supporting allials involved in separate global wars is degrading weapons stocks at an unprecedented scale with increased needs for specific weapons systems, particularly anti-tank missiles and artillery shells.
• This requires vast upgrading of the defense industrial base (DIB) and enhancing production lines.

Frost Perspective

• The anti-tank missile industry and supply chain are expected to experience vast changes during the forecast period, reshaping the traditional competitive landscape.
• Prominent regions for anti-tank solutions during the forecast period are the United States, Ukraine, Eastern Europe, and the Middle East, as their growing needs increasingly impact demand in the global anti-tank industry.

Transformative Megatrends

Why

• The evolution of anti-tank warfare is speeding up due to the growing need to counter armored vehicles following their recent impressive performance on the battlefield.
• As such, improvements to ground offensive weapons systems pose a fundamental threat to ground forces, main battle tanks (MBTs), and armored personnel carriers (APCs).

Frost Perspective

• Anti-tank weapons systems are becoming a strategic factor for lethal effectiveness on the battlefield.
• Supply chain shortages will likely impact leading industry providers and their competitiveness. However, the intensified focus of OEMs on procurement and R&D technological initiatives in the industry could change the vendor landscape, paving the way for the entry of relevant small and medium industry participants during the forecast period.

Competitive Intensity

Why

• The growing need for anti-tank systems influences the characteristics of industry competition and emphasizes the changing nature and duration of contracts. Long-term deals with major suppliers and partnerships between leading companies such as Lockheed Martin and RKY highlight the monopolistic characteristics of the industry.
• Industry adoption and penetration of disruptive technologies could also change the competitive landscape.

Frost Perspective

• Global defense OEMs need to navigate the emergence of new technologies and platforms, system integrations, novel business models, and M&A to enhance competitiveness in this volatile business domain.
• The defense industry continues to be open to facilitating innovative environmental workplaces and laboratories to support faster and more robust processes to adopt new anti-tank solutions amid a growing number of defensive high-end solutions for armored vehicles.

Growth Drivers

The Changing Nature of Warfare

• The Russo-Ukrainian war and the Israeli military campaign against the Hamas terrorist group in Gaza both underscore the importance of maneuvering armored vehicles to maximize military objectives on the battlefield after decades of global negligence of ground symmetric platforms. As a result of the impressive operational performance of MBTs, there is increasing demand for affordable, user-friendly, and lethal anti-tank weapons systems and platforms to counter and eliminate armored vehicles on the battleground.
• The changing nature of theater military threats brings into discussion the need for advanced operational offensive capabilities against MBTs. This challenge intensifies as active protection systems (APS) penetrate the industry and shape modernization build-up plans for armored fleets globally.

Rising Demand for Anti-tank Weapons Systems

• Demand for extended-range anti-tank missiles integrated with augmented weapon inventory is on the rise, as managing the challenges associated with urban warfare battlefield become crucial factors for operational effectiveness and lethality of ground forces to counter armored vehicles maneuvering threat.

Advanced Target Acquisition and Recognition Applications

• Acquiring target recognition (ATR) as visual real-time intelligence (primarily based on AI technologies) has become a central tool for the infantry commander’s tactical decision-making process. Integrating ATR capabilities into anti-tank weapons systems boosts the fire-lethal capabilities of those platforms dramatically while keeping the shooter out of the range of sophisticated fire capabilities of near-peer adversaries. Hence, a prime anti-tank vendor need is cutting-edge thermal imaging sensors for advanced ATR applications to enhance operational effectiveness and lethality to counter armored vehicles on the ground.
• As such, the sensor-to-shooter loop is a must for advanced ATGMs, as it simultaneously neutralizes multiple targets at stand-off ranges. The most advanced anti-tank weapons systems include real-time tactical intelligence and battle damage assessment (BDA) for target recognition, operating in offensive and defensive scenarios.

Growth Restraints

Supply Chain Shortages and Economic Burdens

• Rising inflation rates and global geopolitical instability impact the Defense Industrial Base (DIB) to some extent. For example, the Russo-Ukrainian war and the Yemen crisis exacerbate aerospace and defense supply chain disruptions, increasing business uncertainties, especially for vendors focused on fixed-price contracts. This trend is slowing long-term contract awards and new military procurement programs across NATO countries and other regions, such as the Middle East and Asia-Pacific.
• Despite growing defense budgets, the West has not faced such supply pressure since the Cold War era, as the US and NATO officials express concerns that shortages could hamper their ability to fight. As such, leading defense OEMs such as Lockheed Martin and Raytheon Technologies (RTX) declared that it would take 4 years to double the production of Javelin missiles as broader global supply chain problems persist (e.g., shipping costs of chips and bullet bearings). Looming defense budgets will likely impact the prioritization of budgetary flexibility for anti-tank programs and contracts.

Anti-tank Warfare Limitations

• Advanced technologies generating APS are on the rise amid the impressive recent operational performance of ground armored platforms on the battlefield.
• The most advanced APS systems pose a serious threat to anti-tank platforms, countering their capabilities. The struggle between offensive and defensive ground capabilities will continue to shape this dynamic industry and its competitive landscape.