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Electronic subsystems are an integral part of all modern military fighter jets, with a substantial portion of the electronics supporting intelligence, surveillance and reconnaissance (ISR) systems, electro-optical/infrared (EO/IR), avionics, munitions and radar related subassemblies. This equates to a very high content of PCBs and SMT assembly requirements.
Let’s explore recent market developments that bode well for ITAR-certified, domestic PCB and electronics contract manufacturers, particularly for those subcontractors participating on the F-35 and F-16 platforms.
In early August, after 15 years on contract— and amid considerable scrutiny and consternation over the seemingly never-ending technological development issues and cost overruns—the United States Air Force declared its first squadron of Lockheed Martin’s Lightning II F-35A Joint Strike Fighters as “Ready for Combat.”
“Ready for Combat” status is officially known as Initial Operational Capability (IOC) confirmation. Previously, on July 31, 2015, the United States Marines also advised of IOC status for their F35B variant Joint Strike Fighter.
The Air Force F-35A variant IOC proclamation is especially noteworthy as the Air Force is the single largest customer of the Joint Strike Fighter and plans to procure 1,763 of the F-35A fighter jets.
There are three variants of the F35 platform: the F-35A conventional takeoff and landing (CTOL) Air Force variant; the F-35B short takeoff/vertical landing (STOVL) Marine Corps variant; and the F-35C Navy carrier variant (CV). The variants are primarily distinguished by their take-off and landing capabilities.
Through my business activities and general market knowledge, I am aware of at least 20 PCB fabricators and electronic contract manufacturers that have participated for many years on the F-35 program—either through their work directly for the prime, Lockheed Martin, or through the many subcontractors supporting different electronics systems that are integrated into the F-35 platform. Primary subcontractors for electronic subsystems on the F-35 platform include Northrop Grumman and BAE Systems.
It is important to note that participation in the military sector is very certification-driven. The barriers for entry from both a certification and capital expenditure standpoint, at both the bare printed circuit board and circuit card assembly level, are understandably high in support of our nation’s warfighters. There are currently only a handful of PCB fabricators and CMs deemed capable and are certified to support our military.
Appropriately, the level of commitment by those that currently support F-35 through advanced certifications such as IPC Class 3 Trusted Source, IPC J-STD 001 with Space, and AS9100—and that have also made the required CAPEX and process development investments—are well-poised to enjoy near term dividends as the U.S. Air Force moves the F-35 program from its current LRIP (low rate initial production) build rate to more of a matured production status.
While a 15-year commitment to a program is certainly long, the potential reward is commensurate. The F-35 Joint Strike Fighter is full of electronics suites, has a cost per aircraft of over $100 million each, and the program is both the largest airplane and the largest weapons system procurement in Pentagon history, with a projected service life of sixty years. To those that made a sustained commitment to support the F35 program, well played!
In a March 2014 column, Foreign Military Sales: Back to the Future for Sales Opportunities, I detailed what I felt to be the tremendous upside opportunities to support legacy electronics manufacturing as the prime contractors, in a sequestered U.S./DOD budget environment, repositioned their businesses to support foreign military sales (FMS) initiatives. The column closely examined Lockheed Martin’s F-16 fighter jet, the potential for increased sales of the F-16 to our allies, and identified the prime contractors that had significant electronics content position for the upgrade packages. As the F-35 consortia countries recognize that their ability to actually procure and field the 5th generation fighter (F-35) could take up to a decade, their primary near-term initiative is to purchase the 4th generation alternative F-16 fighter with upgraded electronics suites.
The demand for USA technology is so high in the FMS market, that there are now ongoing government initiatives to streamline the approval process by all the stakeholders: DoD, Commerce and State. American competitiveness in the global market is highly dependent upon the ability to expedite the FMS process, as it is a highly competitive landscape. Our current turn-time on the approval process is one to two years, with other countries offering platform alternatives to the F-16 and turning deals in months. Despite the approval delays, and highlighting the tremendous growth in FMS spending, the Defense Security Cooperation Agency (DSCA) announced 2014 FMS FY spending of $34.2 billion and 2015 FY FMS spending of over $47 billion.
The upward trend continues in 2016, with Defense News highlighting a Guggenheim Securities report that shows FMS spending through the first half of FY 2016 is on track to meet or surpass last year’s totals. There are several pending FMS cases that could increase this substantially; one example, according to Defense News, is a pending $40−50 billion FMS military funding plan for Israel which could include F-35s, Boeing F-15s (Israeli version) and the TextronBoeing MV-22s.
The FMS spending environment warrants a deeper dive as many munitions programs are now processing through the DSCA process in support of United Arab Emirates (UAE) initiatives to combat ISIS.
I will explore that in detail in the next column.
Lastly, for those of you attending SMTAI in Chicago in late September, I am honored to be named the Chair for Roadmaps in their Spot light session and invite you to attend. This will be a particularly informative Spotlight as we have both Mack Miller from Naval Surface Warfare Center–Crane and Chuck Richardson from iNEMI slated to present. Plan to join us for a forward technology look and to identify your technology gaps to best prepare your business for future success.
Naval Surface Warfare Center (NSWC) Crane Division is chartered by the DoD as the Executive Agent for Printed Circuit Board and Interconnect Technology to ensure access to trusted technologies for critical national defense and Warfighter superiority. The NSWC-Crane Roadmap will look closely at PCB fabrication and technology, supply chain and counterfeit issues, PCB assembly, constrained materials and lead-free issues. A preview of iNEMI’s Q2 2017 release of the 2017 Technology Roadmap will be presented by Chuck Richardson with particular emphasis on IoT/Wearables, Board Assembly and Optoelectronic Technologies.
I look forward to your comments, seeing you in Chicago at SMTAI to explore future technology roadmaps, and continuing to explore the expanding FMS opportunities in my next column.
2. Electronic Subsystems on the F-35 Platform
3. IPC Validation Services
4. Defense Security Cooperation Agency (DSCA)
5. Defense News
6. SMTAI Spotlight sessions
7. Naval Surface Warfare Center (NSWC) Crane Division
John Vaughan is vice president of Zentech Manufacturing. To contact the author, or to read past columns, click here.
Editor's Note: This article originally appeared in the September 2016 issue of The PCB Magazine.