Market Trends of Saudi Arabia C4ISR Industry
Saudi Vision 2030 is Anticipated to Boost Market Growth
Despite the huge defense spending, Saudi Arabia has lagged in developing its local defense industry. As part of Vision 2030, Saudi Arabia announced in February 2021 its plan to invest more than USD 20 billion in its domestic military industry over the decade as part of aggressive plans to boost the local defense industry. By 2030, the country intends to increase military R&D spending from 0.2% of total armaments expenditure to around 4%. The Saudi government facilitated the formation of the General Authority of Military Industries (GAMI) and Saudi Arabian Military Industries (SAMI) to develop the national military manufacturing capabilities.
In July 2022, the Saudi Arabian government revealed that it has around 76 investment opportunities in six different areas of the military and defense industries. On the other hand, the Saudi Data and AI Authority's National Strategy for Data and Artificial Intelligence aim to make the country a global AI leader by 2030. This is expected to drive the integration of such emerging technologies into C4ISR systems in the country in the years to come.
Furthermore, in August 2022, the United States approved the sale of Patriot MIM-104E Guidance Enhanced Missile-Tactical Ballistic Missiles and related equipment to Saudi Arabia. The country proposed to buy 300 Patriot MIM-104Es, test equipment, range and test programs, and other equipment. The program cost was worth USD 3.05 billion. Thus, growing investment in enhancing defense capabilities and procurement of advanced weapons drive the growth of the market.
Rising Expenditure in Naval Modernization Initiatives Would Drive Market Growth
Over the years, Saudi Arabia started to focus on upgrading its relatively small and outdated naval arm. The country is currently working on a huge armed forces modernization project focusing on the Royal Saudi Naval Forces (RSNF), which used to receive less attention than the Air Force or Army. The Saudi Naval Expansion Programme (SNEP II) program focuses specifically on modernizing the aging Eastern Naval Fleet. The RSNF is procuring naval vessels, fixed-wing aircraft, helicopters, and unmanned aerial vehicles (UAVs), which will be equipped with advanced data-sharing and situational awareness capabilities as part of the program. Procuring such platforms is expected to generate significant demand for related C4ISR systems.
On the other hand, the country has allocated USD 18 billion for the Royal Saudi Navy's extensively planned C4I command and control and intelligence-sharing network. This project includes large-scale facilities, hardware, and software upgrades that support naval forces, including the country's small marine and naval special warfare contingents. Furthermore, procuring new naval vessels is expected to increase the demand for sea-based C4ISR systems.
In December 2021, Navantia launched the fifth and final corvette being built for the Royal Saudi Naval Forces (RSNF), named "Unayzah." The work on the corvette is expected to be completed by the end of 2023. The design of the corvettes is of the latest generation, maximizing the participation of Navantia by incorporating its products, such as the CATIZ combat system, the HERMES integrated communications system, the DORNA firing direction, the Integrated Platform Control System, and the MINERVA integrated bridge. The corvette is designed to conduct anti-surface warfare (ASuW), electronic warfare, maritime protection, intelligence gathering, search and rescue (SAR), humanitarian aid, marine pollution control, as well as combat smuggling, drug trafficking, and illegal immigration. Such procurements are expected to drive the growth of the sea segment during the forecast period.
