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The global tactical data link market size was valued at USD 6.64 billion in 2021. The market is projected to grow from USD 7.00 billion in 2022 to USD 11.70 billion by 2029, exhibiting a CAGR of 7.61% during the forecast period. The global COVID-19 pandemic has been unprecedented and staggering, with tactical data link experiencing lower-than-anticipated demand across all regions compared to pre-pandemic levels. Based on our analysis, the global market exhibited a low growth of 3.9% in 2020 as compared to 2019.
Tactical data link (TDL) is a communication standard that uses different data links for the transmission and exchange of tactical information among arm forces. It provides a secure communication network for military missions. Such tactical networks are IDM, Link 11, AFAPD, Link 16, Link 22, SADL, JREAP, VMF, and SIMPLE. The network can be selected based on the application's needs. For example, the Link 16 data link is used for line of sight communication. SADL is used for situational awareness. The Link 22 data link is used for beyond line of sight communication applications.
Secure communication through TDL allows military personnel to make accurate decisions in critical situations. Furthermore, this technology easily integrates with a variety of military systems, which improves the capabilities of that system. Therefore, the defense industry witnessed a surge in replacing traditional military communications systems with these links to enable real-time and secure communication. This factor is driving the market growth during the forecast period.
Disruption in Supply Chain to Hinder Short Term Growth amid COVID-19 Pandemic
The pandemic situation has resulted in restrictions on transportation activities. Moreover, to prevent COVID-19 spread, several manufacturing facilities are closed for a specific time. These factors result in a sluggish year-on-year growth rate, mostly during 2020-2022, due to supply chain analysis and low production disruption.
In addition to this, several countries such as South Korea and Chile prioritize their defense expenditure to the healthcare industry to build the required infrastructure facilities to tackle the growing coronavirus cases. This factor has created a slight impact on the growth of the market.
Despite the coronavirus situation, developed and developing countries such as the U.S., U.K., India, and China have witnessed increased military expenditure in 2020 and 2021.
Moreover, the increasing focus on improving military communication security and system performance is expected to overcome the pandemic's impact on the tactical data link market growth faster during the forecast period.
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Growing Development of Network-Enabled Weapons (NEWs) and Manned Unmanned Teaming is a Prominent Market Trend
An increase in military expenditure on research and development activities leads to the development of network-enabled weapons and teaming of manned and unmanned systems. Western air forces face two major trends; the rise of Integrated Air Defense Systems (IADS) that leads to more complex and challenging operational environments and a decline in the numbers of western combat aircraft. Moreover, teaming of manned aircraft and unmanned systems provides the augmented combat mass required in highly contested environments. Unmanned Aerial Vehicles (UAVs), also known as Remote Carriers (RCs), teamed up with next-generation fighters (NGF) that are used in a variety of missions such as target acquisition and reconnaissance, air-to-air combat, and airborne electronic attack.
Furthermore, the increasing use of network-enabled weapons (NEWs) is the latest trend in the market. NEWs can find, track, and engage a target faster than conventional weapons. As a result, it helps avoid duplication of efforts, reducing the potential for fratricide, de-conflicting operations, and increasing the possibility of real-time target hitting.
Rising International Security Threats and Disputes among Neighboring Countries to Drive Market Growth
In recent years, there has been an exponential rise in terrorist activities across the world. This factor increased the defense budget to enhance the country’s defense capabilities by adopting advanced military communication technologies and systems. Moreover, the rising cross-border activities across the globe have emphasized strengthening military application system capabilities. Emerging economies such as China and India are increasing their defense expenditure to modernize the conventional communication system. In addition, these countries are spending on the procurement of unmanned aerial vehicles (UAVs), unmanned underwater vehicles (UUVs), and fighter jets.
The growing need to improve the safety and security of military personnel is driving the development of automated fire control systems. Thus, the advent of automated fire control systems leads to increased demand for tactical communication software solutions to control weapon-based systems from a remote location.
Rising Demand for Enhanced Interoperability to Boost Market Growth
The growing demand for improved interoperability among armed forces and coalition partners is accelerating the production of advanced system solutions. The interoperability allows the system or arm forces to work together in a particular situation and improve communication security. Therefore, there is an increase in the adoption of tactical data link solutions from end-users due to the increasing need for secure communication. The North Atlantic Treaty Organization (NATO) is an intergovernmental alliance between North American and 30 European countries.
Furthermore, increasing procurement of TDL systems by defense forces to enhance military communication capabilities is expected to drive market growth.
Rigorous Military Standards and Shifting Defense Budgets to Healthcare from Several Countries to Hamper Market Growth
In the defense sector, the secure communication of data links is very important as it may alter an incorrect interpretation of severe accidents. Therefore, the defense sector defines some standards to develop and test this data link solution. The North Atlantic Treaty Organization (NATO) has described standards that all NATO members and other countries apply. However, these stringent norms hamper the growth of the market. Moreover, defense equipment has to pass through different military standards to qualify for procurement by defense forces. Apart from the military standards, the defense products should meet the size, weight, and power (SWaP) requirements used in military aircraft.
The declining defense budget and diverting it to the healthcare sector due to the COVID-19 pandemic temporarily hampers the growth of the market. In addition, South Korea cuts USD 245 million from the country’s defense budget. Thus, declining defense expenditure amid the pandemic and stringent military standards restrict the market growth.
Software Segment to Grow at Faster Pace
Based on solution, the market is divided into hardware and software.
The software segment is projected to be the fastest-growing segment during the forecast period. The growth of the segment is due to the growing adoption of advanced processing software from the defense forces. The software system is used to enhance the capabilities of hardware components by providing seamless connectivity among hardware systems.
The hardware segment held a significant share in 2021. The TDL system consists of advanced hardware components such as sensors, antennas, weapon data link controllers, and processors. Therefore, the growing adoption of a tactical data link system due to increasing international security threats and political conflicts among neighboring countries is expected to support the segment growth.
Growing Demand for Link 22 Will Support to Grow the Others Segment Size During the Forecast Period
Based on data link type, the market is classified into Link 16 and others.
The Link 16 segment will witness significant growth during the initial period of the forecast year. The growth of the segment is attributed to the increasing demand for link 16 network-enabled solutions from airborne, sea, and ground-based units. Link 16 data link is used for the information exchange between tactical command, control, communications, computers, and intelligence (C4I) systems.
The other segment includes data link types such as Link 1, 4, 6, 7, 10, 11, 14, 22, SADL, Inter/Intra Flight Data Link (IFDL), situation awareness data link (SADL), JREAP, and SIMPLE. The segment registered the largest share in 2021 and is anticipated to grow at the highest CAGR during the ending year of the forecast period. This growth is attributed to the growing demand for Link 22 network-enabled solutions in the U.S. and other NATO countries. Link 22 provides Beyond Line-of-Sight (BLOS) communications. The growing adoption of drones for BLOS operation is expected to increase Link 22 demand during the forecast period. In addition, Link 22 is the newest NATO standard for tactical information exchange between military units. The Link 22 network layer structure permits transmission of any kind and length of data with automated routing and relaying mechanisms.
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Rising Demand for UASs in Military Applications to Propel Market Growth
Based on platform, the market is classified into air, ground, and sea.
The air segment is anticipated to register the highest growth during the review period. This growth is attributed to the increasing demand for unmanned aerial vehicles (UAVs), fixed-wing, and rotary-wing aircraft for defense operations. The growing use of tactical data links in military aircraft improves command and control, and situational awareness capabilities are expected to propel market segment growth.
The ground segment is expected to dominate the market with the highest share in 2021. This growth is attributed to the high adoption of TDL radio for real-time communication between military personnel and the rising procurement of network-enabled weapons and military vehicles from defense forces to drive the growth of the segment.
The sea segment is anticipated to showcase significant growth during the forecast period. This growth is due to the increasing defense expenditure, and rising focus on strengthening the naval sector due to increased warfare activities boosts the market growth. The development of advanced frigates, destroyers, and other warships is expected to drive the segment growth.
Radio Communication Applications Segment to Dominate
Based on application, the market is divided into command & control, Intelligence, Surveillance, and Reconnaissance (ISR), electronic warfare, radio communication, and situational awareness.
The radio communication segment registered the largest share in the base year. This large share is accredited to the rising demand for TDLs for radio communication due to rapid growth in warfare activities, terrorism, and cross-border conflicts driving segmental growth.
The electronic warfare segment will witness the highest growth during the forecast period due to the growing adoption of electronic warfare in UAVs and the introduction of next-generation weapons. This factor is supporting to drive the segment growth.
The command and control segment is projected to grow at a significant CAGR during the forecast period. The growth is due to the rising need to improve military forces' decision-making capabilities in tactical situations. The data link enhances the command and control applications by providing real-time information to the defense forces.
North America Tactical Data Link Market Size, 2021 (USD Billion)
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The global tactical data link market is segmented North America, Europe, Asia Pacific, and the rest of the world based on region.
The North America market size stood at USD 2.52 billion in 2021 and is expected to dominate the market owing to the highest defense expenditure by the U.S. Moreover, increasing spending on developing advanced military security solutions and the presence of many hardware and software developers across the region further supports the market growth during 2022-2029. In addition to this, the U.S. is a NATO member, which allows them to use link 1, link 2, link 11, link 16, and link 22 tactical data link capabilities.
The market in Asia Pacific is anticipated to witness the highest compound annual growth rate during the forecast period. The growth is due to the increasing defense expenditure from China, India, South Korea, and others. South Korea has developed a TDL network called Link-K.
Europe has registered a significant share in the market in the base year. The growth is accredited to the military modernization programs from the U.K, France, Russia, and others. The presence of key players, such as Thales Group, Leonardo S.p.A., and others, drive the market growth across Europe.
The rest of the world is expected to experience moderate growth during the projection period. The growing UAE government contract with NATO to strengthen their military capabilities is anticipated to support the market growth. However, the limited defense expenditure by several countries in the Middle East & Africa and Latin America except for Saudi Arabia, the UAE, and Turkey is anticipated to restrict the market growth during the forecast period.
Constant Product Innovation and Secure Long-Term Defense Contracts are Strategies Adopted by Key Players to Endure their Positions
The competitive landscape of this market depicts the presence of several large and medium-sized companies such as BAE Systems plc, Thales Group, Raytheon Technologies Corporation, Viasat, Inc., and Curtiss-Wright Corporation. The key players involved in the market mainly focus on developing upgraded systems, software solutions, and associated tactical communication equipment to meet application demand.
The key players also adopt organic and inorganic growth strategies such as increasing investments in R&D activities, mergers, and acquisitions and entering into long-term contracts with the defense ministry.
An Infographic Representation of Tactical Data Link Market
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The research report provides a detailed analysis of the market and focuses on key aspects such as renowned manufacturers, products, demanding technologies, and end-users. Moreover, it offers insights into the TDL trends and highlights key industry developments. In addition to the factors mentioned above, the report encompasses several direct and indirect factors contributing to the market growth in recent years.
Value (USD Billion)
By Solution, Data Link Type, Platform, Application, and Geography
By Data Link Type
Fortune Business Insights says that the global market size was USD 6.64 billion in 2021 and is projected to reach USD 11.70 billion by 2029.
Registering a CAGR of 7.61%, the market will exhibit steady growth during the forecast period (2022-2029).
The software solution segment is the leading segment in the market.
BAE Systems plc, Northrop Grumman Corporation, Leonardo S.p.A., Raytheon Technologies Corporation, and Thales Group are the leading players in the global market.
North America dominated the market in terms of share in 2021.
Command & control, Intelligence, Surveillance and Reconnaissance (ISR), electronic warfare, radio communication, and situational awareness are the major applications of TDL.
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