31 Oct 2022

Nuclear subs, diesel subs and remodelled frigates fuel a healthy naval market

Nuclear subs, diesel subs and remodelled frigates fuel a healthy naval market
Image of a TKMS Dakar-class Submarine. Source: TKMS image from Naval News.

China’s emergence as a superpower, the AUKUS response and, the sinking of the Moskva has put the naval domain in the spotlight over the past year. The sea is seen as a frontier of inter-state conflict for which the industry makes ready to provide innovative products and solutions as revealed in Shephard Media’s Naval Warfare Handbook.

Momentous sinking of the Moskva

Classed as both a victory for morale and a strategic win, the sinking of Russia’s Black Sea flagship, the Moskva, is a major event in recent Naval history. Many sources suggest that the ship, which boasted advanced air and missile defence systems, was sunk by Ukrainian-made shore-based Neptune anti-ship missiles. It was a triumph in the ongoing David-and-Goliath battle that continues to rage between Ukraine and Russia, demonstrating the capabilities and innovations being forged and deployed in Ukraine’s fight to defend its sovereign territory.

The impact of AUKUS

The AUKUS agreement sent shockwaves through the industry back in September 2021 when it was announced that the United Kingdom and United States would create a pact with Australia, cancelling a major deal with Paris. The focus of the agreement is to develop nuclear-powered submarines and to a lesser extent, hypersonic missiles. Some reports have suggested that the nuclear submarines will cost anything from $70 billion upwards. The agreement signals a major investment and innovation opportunity, where the United Kingdom and United States are set to further materialise their tilt towards the indo-pacific, supporting allies in Seoul, Tokyo, Canberra and others.

Early indications suggest that the current phase of the agreement is on track to determine Australia’s needs and fact-find potential opportunities. It is also worth noting that Australian sailors are set to begin training on the UK’s Astute-class submarines in preparation for the fulfilment of the agreement in years to come.

TKMS dominate diesel-sub production

Elsewhere in the submarine industry, Thyssenkrupp Marine Systems (TKMS) have dominated recent news with the largest order in their history to provide Norway with four and Germany with two Type 212 Common Design Submarines. A further order for three Dakar-class submarines for Israel, Shephard notes may include vertical launch systems. This adds to a trend in the latest generation of diesel-electric submarines. According to TKMS, 70% of NATO’s non-nuclear submarine fleet has been produced in their shipyard, solidifying their position of strength in the market.

The growing might of China’s Navy

Back in June, China launched its largest (80,000t) and most capable aircraft carrier yet, its only second indigenously-produced carrier to enter service. Shephard media notes that the US DoD is expecting the carrier to be ready for deployment in 2024. This will be a major milestone for the Chinese PLAN, as the world’s largest navy will acquire its third carrier asset. It brings with it some major concerns about the sheer increases in Chinese naval capability and the perceived threats posed to allies in the region. This sentiment is felt to justify the tilt to the Indo-Pacific, amid fears around an invasion of Taiwan which would likely involve a significant naval incursion.

Such fears reinforce the emphasis being placed on NATO members to meet their budgetary targets and innovate to offset the growth in potential threats, suggesting a demand for adaptive SMEs and primes to provide governments with tangible technological advances.

Frigates of the future

In another interesting set of opportunities, featuring Australia’s RAN, progress is being made on the Hunter-class frigates (A$35 billion programme) which are being modelled from the United Kingdom’s City-class Type 26 frigates. The Hunter-class programme positions Australia as a major collaborative player in the naval market, with AUKUS and its own acquisitions standing out as major opportunities for suppliers and innovators.

In Europe Greece’s Hellenic Navy has begun construction of its Defence and Intervention Frigate, with the entire batch set to be delivered by 2026. Babcock was awarded a contract to enhance Poland’s shipbuilding programmes including the production of three Arrowhead 140 frigates. BAE released renderings of the future Type 32 Adaptable Strike Frigate described as part frigate, part container ship, offering a solution for the UK's Type 32 requirement and export opportunities. BAE’s Type 26 Frigate programme is well underway as it prepares to ‘float off’ the first of the UK Royal Navy’s new Type 26 frigates at the end of this year, while Babcock are due to deliver five Type 31 units to the Royal Navy by 2028.

The constant development and acquisition of frigates is no less noticeable in the United States, where the construction of Constellation-class frigates has been followed by multi-billion-dollar additional purchases.

 

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