The development prospects of the industrial electronics industry are broad and usher in a new round of opportunities
Analysis of the structure of the military electronics industry chain
Military electronics is an indispensable part of the national defense science and technology industry, and its technical level is the cornerstone of national defense information construction. From top to bottom, the industrial chain of the military electronics industry mainly includes: raw materials, components, chips, components, modules, subsystems, and overall equipment. As the final user of the first equipment, the army generally directly purchases overall equipment from large state-owned military industrial groups and their subordinate enterprises and scientific research institutes, while the state-owned or private enterprises upstream of the overall equipment manufacturers mainly provide supporting products and services around the procurement needs of the overall equipment manufacturers. Generally speaking, the supporting level of military electronics enterprises is gradually increased from top to bottom along the industrial chain.
Structure diagram of military electronics industry chain
At present, defense spending is still not commensurate with the status of the economy, and there is still a lot of room for growth in the future
As China continues to make progress in economic construction, the country's fiscal expenditure in the field of national defense is also growing to meet the needs of the new international and domestic situation, and the national general public budget in 2023 will arrange national defense expenditure 158 trillion yuan, an increase of 7 over the previous year2%, of which: ** expenditure at this level 155 trillion yuan, an increase of 7 over the previous year2%。
The scale of China's national defense budget expenditure
Although China's national defense expenditure budget has hit new highs year after year, the proportion of national defense spending in GDP is on the low side compared with major countries in the world. "China's National Defense in the New Era" pointed out that China is the only major country in the world that has not yet achieved complete reunification, and is one of the countries with the most complex peripheral security situation in the world, and faces severe challenges in safeguarding national sovereignty, territorial integrity, and maritime rights and interests. China is getting closer to the world stage, and the international community is expecting the squadron to provide international public security products. The squadron is in the stage of transformation to informatization, and the task of conforming to the development trend of the world's new military revolution and promoting military reform with Chinese characteristics is arduous and arduous. There is still a big gap between China's defense spending and its needs to safeguard national sovereignty, security and development interests, to fulfill its international responsibilities and obligations as a major country, and to its own construction and development. China's defense spending will continue to grow moderately and steadily in line with the country's level of economic development.
The military expenditure of China and other countries accounted for the GDP of the same periodproportional situation
The increase in the national defense expenditure budget is the basic guarantee for the improvement of our national strength, and the development of national defense science, technology and industry is the necessary support for building a modern army. The "14th Five-Year Plan" clearly states that "promote the simultaneous improvement of national defense strength and economic strength", and the proportion of China's defense expenditure in GDP is expected to further increase. The progress of national defense science and technology industry is also related to the development of cutting-edge science and technology, and is one of the most important industries in a country. Focusing on the field of national defense science and technology, China has established a relatively complete modern industrial system covering nuclear, aerospace, aviation, shipbuilding, weapons, military electronics, and supporting industries.
Analysis of the development characteristics of the military electronics industry
1) The military electronics industry has the characteristics of a high concentration of downstream customers.
The performance and reliability of equipment is one of the key factors that determine the combat capability of the troops, and the troops have strict requirements for the performance and quality of the equipment. In order to clarify the main body of responsibility and strengthen the control of the entire industrial chain, the overall design and integration unit (or "overall unit") of the current equipment is generally held by large state-owned military industrial groups and their subordinate enterprises and scientific research institutes. On the one hand, this is determined by the operational needs of the troops and the state's macroeconomic regulation and control policy on the industry, and on the other hand, it is also the embodiment of the strength of the large state-owned military industrial groups themselves: the overall unit often needs to bear long-term R&D investment and coordinate a large number of supporting resources, and private enterprises generally do not have such capital strength and resource endowment. Therefore, the military electronics industry has the characteristics of a high concentration of downstream customers.
2) The military electronics industry is a technology-intensive industry with a high entry threshold.
The electronic information industry is a technology-intensive industry, and product research and development involves mathematics, mechanics, optoelectronic science, atomic physics, radio frequency signals, software engineering, material science and other professional technologies, which is a comprehensive application of cross-category and multidisciplinary knowledge, and the manufacturing precision of the product is high, the system complexity is high, the application scenarios are diverse, and there are high technical barriers.
The products of the national defense industry need to maintain a high degree of reliability under extreme working conditions, and at the beginning of the design, they need to take into account various emergencies and countermeasures that may be encountered in the actual combat environment, so their leading suppliers need to have good quality control capabilities and rich supporting experience. These factors, combined with strict access standards and stable delivery capabilities, make the national defense industry have high comprehensive barriers. The military electronics industry is at the intersection of the electronic information industry and the national defense industry, and has both the technical barriers of the electronic information industry and the comprehensive barriers of the national defense and military industry.
, the development trend of military electronics industry**
1) The overall market size of the military electronics industry will maintain rapid growth.
The integrated development of mechanization of national defense construction to informatization and intelligence is triggering a comprehensive and profound military transformation and reform around the world. Benefiting from the gradual implementation of strategic goals such as "accelerating the upgrading of first-class equipment and the development of intelligent first-class equipment" in the "14th Five-Year Plan", the upgrading of traditional first-class equipment has created a large demand for military electronic products. With the deepening of the trend of intelligent equipment, it is expected that the overall market size of the military electronics industry will maintain rapid growth.
2) The overall ecosystem of the military electronics industry has been improved, and the demand has increased significantly.
Since the beginning of the new century, China has made great progress in economic construction, and its role in international affairs has become more and more important, which has attracted the attention of the traditional powers of the West. During the Obama administration, the United States put forward the "Asia-Pacific rebalance strategy", and since then, the Sino-US game has begun to enter a period of normalization, and successive United States have put forward strategic plans to enhance its influence in Asia and the Pacific.
Since 2017, in order to curb China's progress in the field of cutting-edge technology, the United States has continuously imposed sanctions on Chinese companies, and has successively imposed export restrictions and technical blockades on leading enterprises in the communications, electronic information, and semiconductor industries such as ZTE, Huawei, and SMIC. At the same time, the U.S. Department of Commerce continues to influence the development of China's defense science and technology industry through the Entity List of the Export Administration Regulations, and a large number of Chinese companies have been included in the Entity List for reasons such as being accused of "purchasing and attempting to purchase U.S.-origin items to support China's military modernization." In view of the long-term and repeated nature of the Sino-US game, the national defense science and technology industry, as the best relationship, must establish an effective chain system, and the overall ecological system of the military electronics industry has increased significantly.
3) The equipment is developing towards informatization, intelligence and integration.
The future war will be an information-based war under nuclear deterrence, and informationization, intelligence, and integration will be the overall trend of the development of advanced equipment in the future. This trend is mainly reflected in the shift from scattered and independent development of various services and arms to interoperability and compatible development, and more attention is paid to the combination of system support and advanced systems. A comprehensive electronic information system that integrates the three main functions of battlefield situational awareness, effective use of forces, and reliable service network will become the focus of equipment construction. Since the related products of the military electronics industry are the key to improving the informatization and intelligence of advanced equipment, they will play an important role in this overall trend.
For more industry information, please refer to PwC ConsultingMilitary electronics industry market research and development trend ** report".At the same time, PwC Consulting also provides services such as industrial research reports, industrial chain consulting, project feasibility reports, specialized and special new little giant certification, 14th Five-Year Plan, post-project evaluation report, BP business plan, industrial map, industrial planning, national manufacturing single champion enterprise certification, IPO fundraising feasibility study, IPO working paper consulting and other services.