Tactical Data Link Market Size, Share & Industry Analysis, By Solution (Hardware and Software), By Data Link Type (Link 16 and Others), By Platform (Air, Ground, and Sea), By Application (Command & Control, Intelligence, Surveillance, and Reconnaissance (ISR), Electronic Warfare, Radio Communication, and Situational Awareness), and Regional Forecast, 2024-2032

The global tactical data link market size was valued at USD 7.43 billion in 2023 and is projected to grow from USD 7.94 billion in 2024 to USD 14.71 billion by 2032, exhibiting a CAGR of 8.01% during the forecast period. North America dominated the tactical data link market with a market share of 37.55% in 2023. Moreover, the tactical data link market size in the U.S. is projected to grow significantly, reaching an estimated value of USD 4,967.7 million by 2032, driven by rising demand for enhanced interoperability to boost market size & growth.

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.

The onset of the COVID-19 pandemic led to restrictions on transportation activities and resulted in a sluggish year-on-year growth rate, mostly during 2020-2022. This was due to supply chain disruption and low production. Despite the health crisis, developed and developing countries such as the U.S., U.K., India, and China witnessed increase in military expenditure in 2020 and 2021. The increasing focus on improving military communication security and system performance is expected to help overcome the pandemic's impact on the tactical data link market growth during the forecast period.

Tactical Data Link Market Trends

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.

• According to an updated fact sheet on Government Expenditures on Defense Research and Development by the U.S. and Other OECD Countries 2020, The U.S. had spent USD 55.4 billion on defense research and development activities in 2017.

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.

• In January 2021, the U.K. defense ministry signed a contract worth USD 750 million with MBDA to equip its F-35B combat jets with a new mini-cruise missile. Spear 3 missile is a network-enabled, high precision, and surface attack system.

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Tactical Data Link Market Growth Factors

Rising International Security Threats and Disputes among Neighboring Countries to Drive Market Growth  

In recent times, there has been a significant increase in the frequency of terrorist activities throughout the globe. This factor increased the defense budget, thereby enhancing the defense capabilities of the nation by implementing advanced military communication technologies and systems. Furthermore, the escalating transnational activities across the globe have underscored the necessity of enhancing the capabilities of the military application system. Emerging economies such as China and India are increasing their defense expenditure to modernize the conventional communication system. Furthermore, these nations are investing in acquiring unmanned aerial vehicles (UAVs), unmanned underwater vehicles (UUVs), and fighter jets.

• In April 2021, according to new data published by the Stockholm International Peace Research Institute (SIPRI), China and India's military expenditure reached an estimated USD 252 billion and USD 72.9 billion, respectively.

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.

• In 2019, conflicts between Saudi Arabia and Yemen led to more than 7,500 civilian casualties in ballistic attacks. In 2020, conflicts between Armenia and Azerbaijan militaries, Israel and Palestine, and others led to instability and insecurity. Thus, increasing cross-border issues and growing terrorist activities in Middle Eastern countries drive market growth.


• In December 2021, The French Armament General Directorate (DGA) awarded a USD 11.3 billion contract to Airbus Helicopters for the development and procurement of the H160M in the frame of the Light Joint Helicopter program (HIL). The H160M Guépard will be equipped with the Safran Euroflir 410 electro-optical system and will also carry a self-protection suite, a satellite communication system and a tactical data link system.

Rising Demand for Enhanced Interoperability to Boost Market Growth

The increasing demand for improved interoperability among armed forces and coalition partners is driving the development of advanced system solutions. The interoperability enables the system or military to collaborate in a specific circumstance and enhance communication security. Therefore, end-users are increasingly demanding tactical data link solutions due to the increasing need for secure communication. The North Atlantic Treaty Organization is an international alliance between North American and European countries.

• On March 27, 2020, the North Macedonia state became a member of NATO. NATO used military data link 16 networks to communicate with its coalition partners. Additionally, Link 16 is used to command the partner and make a decision by communicating with the NATO members.

Furthermore, increasing procurement of TDL systems by defense forces to enhance military communication capabilities is expected to drive market growth.

• In November 2019, Northrop Grumman signed a three-year contract with the Australian Defense Force Tactical Data Link Authority (ADFTA) to deliver TDL systems and training as part of the ADF’s Joint Data Network development. The ADFTA ensured TDL-functionality to achieve single, joint, and combined TDL interoperability for the Australian Defense Force (ADF).

RESTRAINING FACTORS

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.

Tactical Data Link Market Segmentation Analysis

By Solution Analysis

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Software Segment to Grow at Faster Pace Due to Rising Adoption of Advanced Processing Software

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.

• In January 2021, Defense Advanced Research Projects Agency (DARPA) developed software that bridges multiple disparate radio networks to enable communication between incompatible tactical radio data links.

The hardware segment held a significant share in 2023. 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.

By Data Link Type Analysis

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.

• In January 2021, Viasat Inc. increased production rates to over 200 Non-Developmental Item (NDI) Link 16 Next-Generation Tactical Data Links radios per month to meet pending orders from the U.S. and global military forces. Thus, the growing need for these advanced systems will spur opportunities during the forecast period.

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.

By Platform Analysis

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 2023. 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.

By Application Analysis

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.

REGIONAL INSIGHTS

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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 2.79 billion in 2023 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 2024-2032. 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.

• In November 2020, the South Korean defense agency selected Hanwha Systems to develop the main and auxiliary equipment of Link-K, improve its transmission speed, and interlock with foreign data links.

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.

List of Key Companies in Tactical Data Link Market

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.

LIST OF KEY COMPANIES PROFILED

• BAE Systems plc. (U.K.)


• Curtiss-Wright Corporation (U.S.)


• Elbit Systems Ltd. (Israel)


• General Dynamics Corporation (U.S.)


• Honeywell International, Inc. (U.S.)


• L3Harris Technologies, Inc. (U.S.)


• Leonardo S.p.A. (Italy)


• Northrop Grumman Corporation (U.S.)


• Raytheon Technologies Corporation (U.S.)


• Saab AB (Sweden)


• Thales Group (France)


• Viasat, Inc. (U.S.)

KEY INDUSTRY DEVELOPMENTS

• November 2023 – Bellinger Systems signed an agreement with Leonardo DRS (USA) to bring Tactical Data Link technologies to Australia. The execution of this long-term agreement serves as the foundation for several recent contract awards aimed at delivering and integrating Link 22 Tactical Data Link (TDL) technologies into the Australian Defence Force (ADF).


• October 2023 – Northrop Grumman was awarded a USD 732 million firm-fixed price Other Transaction Authorities contract to build 38 satellites for the Tranche 2 Transport Layer (T2TL)-Alpha constellation. The Tranche 2 Transport Layer-Alpha satellites will be able to transmit beyond line-of-sight Link 16 data to military forces from space, while the Tranche 2 Transport Layer-Beta satellites will transmit over Ultra High Frequency S-band for tactical satellite communications. Future Tranche 2 Transport Layer-Gamma satellites will use an advanced tactical data link.


• September 2023 – Commtact, a provider of cutting-edge wireless communication solutions for the defense, security, first responder teams, and robotic platforms, announced a multi-million contract to supply its cutting-edge broadband Phoenix data link systems to an Asian nation.


• August 2023 – A multi-year agreement worth around USD 30 million was announced by Israel's Rafael Advanced Defense Systems, which will cover maintenance services for the navy's Typhoon and Mini-Typhoon remote control weapon stations, naval Spike ER and Spike NLOS missile systems, electro-optical surveillance systems, and electronic warfare Integrated Decoy Systems.


• July 2023 – The Bengaluru-based Alpha Design Technologies Limited (ADTL) executed an order to procure 400 indigenously manufactured Software-Defined Radios (SDRs) for installation on tanks operated by the Indian Army in forward areas.


• March 2023 – Elbit Systems shared plans to exhibit a wide range of products and systems at its booth, which would include both visual and interactive displays. Elbit Systems would present a range of cutting-edge technological solutions that aid in meeting both the present and forthcoming operational requirements of the armed forces.


• January 2022 – BAE Systems Technology Solutions and Services was awarded a contract to provide research and development, engineering, technical, and logistics support services in support of the delivery of radio communication systems valued at USD 32.3 million. The contract is projected to be completed in June 2027


• January 2022 – Curtiss-Wright Corporation updated its entire Link 16 tactical data link product line to comply with the Link 16 Cryptographic Modernization (Crypto Mod) capability mandate from the U.S. National Security Agency (NSA)

REPORT COVERAGE

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.

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