Semiconductor in Military Aerospace Market Trends

The use of semiconductors in aerospace and defense industries has become widespread, and their demand is expected to grow as funding for space exploration and research continues to increase. Semiconductors play crucial roles in various applications, including power management, RF systems, avionics, integrated vehicle systems, and military systems. The constant rise in government and space agency spending for military and space exploration efforts has fueled the desire for more durable and effective technology.

The growth of the semiconductor market in these industries is influenced by active space exploration projects and the advancement of cutting-edge networking and communication capabilities. Despite the global economic impact of the COVID-19 pandemic, there has been a significant increase in capital expenditure by governments worldwide over the last decade to strengthen their military capabilities. Geopolitical tensions have made military programs vital for national defense, contributing to a stable defense budget even amid economic challenges.

According to the Stockholm International Peace Research Institute (SIPRI), global military expenditure reached USD 1,981 billion in 2020, marking a 2.6% increase from 2019. Notably, the top five spenders – the US, China, India, Russia, and the UK – accounted for 62% of the global military expenditure in 2020. The US alone spent USD 778 billion in 2020, representing a 4.4% increase from the previous year and comprising 39.27% of the total global military spending.

The surge in military spending is evident in substantial investments in research and development (R&D) and long-term projects, such as the modernization of military equipment and aircraft, the US nuclear arsenal, and the procurement of large-scale arms. This increased investment and focus on military advancements contribute to the growing demand for semiconductors.

Additionally, the need for modern defensive systems and navigational tools to address the rising threat of terrorism has led to significant funding for these developments. This funding is distributed across major industrialized regions, making the semiconductor industry in military and aerospace promising for economic growth. For example, the US government allocated approximately USD 23.3 billion for NASA in 2021, reflecting a 3% increase from the previous year.

Companies involved in space research and development have also seen substantial growth. Major players like Teledyne Technologies Incorporated, Texas Instruments Incorporated, Infineon Technologies AG, Microchip Technology Inc., and TE Connectivity have increased their investments in developing radiation-hardened and radiation-tolerant semiconductor solutions for space applications. This includes solutions for processors, memory, data conversion, and power semiconductor devices.

Furthermore, both developed and emerging nations have witnessed significant increases in their space research and development activities. The demand for advanced space systems and component solutions is expected to rise as major companies increase their investments in space exploration. For instance, Microchip Technology Inc. introduced the GMICP2731-10 GaN MMIC power amplifier, designed for satellite terminals, utilizing GaN-On-Silicon Carbide (SiC) technology to maintain signal fidelity at high RF levels.

In conclusion, the increasing military expenditure, driven by geopolitical tensions, government priorities, and the need for advanced defense capabilities, is boosting the demand for semiconductors in the military and aerospace sectors. The continuous growth in funding for space exploration and research further contributes to the expansion of the semiconductor market in these critical industries.