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VR Industries Blog

Peering Into The Future of The Military and Defense Contractors Market

by VR Industries

The military and defense contractors are now more technologically advanced than ever, and the success of the industry is translating into big paydays in the future for printed circuit board manufacturers.

Sector is booming
Over the past five years the U.S. economy has been bolstered by strong export growth rates for military defense products. A study by Deloitte Press reported that the sector is set to grow by 3.2 percent in 2016, and its past performance certainly dictates that it will reach that expectation.

Between 2010 and 2015, the aerospace and defense industry was America's largest contributor to gross domestic product growth. In 2015 it hit a market cap of $183 billion, according to Defense News, which accounted for 9.5 percent of total exports. This figure was around 7.1 percent in 2010, Deloitte reported.

With electronics being incorporated into nearly every product made today, it shouldn't come as a surprise that the PCB industry has been doing just as well with the increased spending. Venture Outsource reported that military-linked PCB products garnered $1.1 billion in 2015. This sector represents a healthy industry for PCBA to latch itself onto, even more so than the growing wearables market.

The military and defense contractor industries are growing rapidly, which is good news for PCBA.The military and defense contractor industries are growing rapidly, which is good news for PCBA.

PCBA and defense contractors moving forward
Military technology will become increasingly dependent upon super-fast and flawlessly produced printed circuit boards. According to Venture Outsource, command and control applications are being relied on heavily as drone warfare begins to reshape the industry.

PricewaterhouseCooper recently released a report detailing how the defense industry can keep the good times flowing. It found that continued success relies on a number of factors, rather than just one tangible aspect.

The most important step these organizations need to take is to find a stable and suitable supplier when it comes to PCBs. In a sector flush with regulatory laws, these companies often pass this burden on to to PCBA businesses without necessarily investigating whether they apply to a specific design. This can further complicate a product from both a design and cost standpoint.

Because of this, lean manufacturing techniques must, not should, be used moving forward. PCBA suppliers should understand, according to PwC, that small changes can impact costs greatly, in which case alternative methods of production should be found. The source reported that through identifying these inefficiencies in process and transaction, defense contractors can yield reduced procurement costs of nearly 30 percent at the best.

The industry will undoubtedly become more complex as time goes on, as history has dictated that it will. Electronics will be relied upon heavily moving forward and the Internet of Things will be incorporated so military bases can "communicate" with missiles en route. Beneath all of this is an advancing design process to manufacture these products. PCB suppliers will be at the heart of this growth, granted circuit boards can advance just as quickly as the defense industry. Based on the past five years' performance, though, it seems that it will be a lucrative venture for both parties.

Topics: Military, News

Written by VR Industries