Saudi Arabia C4ISR - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts 2019 - 2032

The Saudi Arabia C4ISR Market size is estimated at USD 795.05 million in 2024, and is expected to reach USD 867.08 million by 2032, growing at a CAGR of 1.09% during the forecast period (2024-2032).

Over the past decade, Saudi Arabia has consistently ranked in the top 10 for the total amount of defense spending and the amount spent on importing armaments. However, even before the outbreak of COVID-19, Saudi Arabia began reducing its defense expenditures. This can be attributed to various factors like the decrease in oil revenues and the government's increased focus on non-military sectors such as healthcare and social development. The country is expected to further reduce its defense expenditure in the years to come. Saudi Arabia plans to spend USD 55.6 billion on its military in 2021, an approximately 3% decrease from the 2020 defense budget of USD 57.5 billion, according to the SIPRI report. The reduction in defense spending is expected to challenge the growth of the C4ISR market during the forecast period.

Nevertheless, the defense spending of the country is one of the highest in the world, which enables the country to focus on its objective of military capability modernization. Factors like growing threats from adversaries, increasing territorial tensions, and growing risk from asymmetric warfare in the region are propelling the military to enhance its battlefield data-sharing capabilities.

There is a growing emphasis on increasing investments in the integration of advanced technologies like machine learning and artificial intelligence into C4ISR solutions to enhance the efficiency and situational awareness of military personnel. Saudi Arabia made data and artificial intelligence key focal points of its Saudi Vision 2030, which is expected to propel market growth in the coming years.

Saudi Arabia C4ISR Market Trends

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.

Saudi Arabia C4ISR Industry Overview

The Saudi Arabian C4ISR market is consolidated and characterized by a few players who provide various C4ISR systems. Some of the prominent players in the Saudi Arabian C4ISR market are Saudi Arabian Military Industries, General Dynamics IS&T Arabia (General Dynamics Corporation), Lockheed Martin Corporation, Raytheon Technologies Corporation, and L3Harris Technologies Inc. With the growing focus on the localization of the defense industry, the country is expected to invest in the capability enhancement of the local players. This is expected to boost the growth of the local player, Saudi Arabian Military Industries (SAMI).

Moreover, SAMI has enhanced its presence in the C4ISR market by acquiring Advanced Electronics Company in 2021, which is the largest military industry deal ever concluded in Saudi Arabia. On the other hand, foreign players are formulating new strategies to expand their presence in the country and capture new contracts from the armed forces. These market players are actively forming joint ventures and partnerships with local manufacturers to expand their presence in the country. In addition to such plans, investments in R&D for the development of C4ISR systems integrated with technologies like AI and quantum networking are also anticipated to help the companies increase their market share during the forecast period.

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