(Source: PwC Youshe) Underwater Warfare of the Future: A Comprehensive Insight and Prospect of the Global Submarine Equipment Industry from 2025 to 2030

I. Industry Overview This industry refers to the high-end equipment industry that provides research and development, manufacturing, system integration, testing validation, and operation and maintenance support for underwater combat platforms, including various submarines, unmanned underwater vehicles (UUVs), and their supporting systems. It is one of the core areas of national strategic security, maritime rights protection, and military technological innovation.

II. Industry Development Overview In the past five years, the global submarine technology equipment industry has entered a new period of rapid development and transformation. - Geopolitical Drivers: Increased competition among major powers, particularly the strategic games in the Indo-Pacific region, have directly propelled the modernization process of major naval forces. As a key force for strategic deterrence and underwater control, there is an urgent demand for the upgrading of submarines. - Accelerated Technological Integration: Breakthroughs in civilian technologies such as artificial intelligence, unmanned autonomy, quantum technology, and new materials are merging with military equipment at an unprecedented speed, giving rise to new combat concepts like “smart submarines” and “ghost fleets.” - Revolution in Autonomy: Unmanned underwater vehicles are evolving from auxiliary roles to main combat equipment, and coordinating operations with manned submarines has become a focal point for countries' research and drills, reshaping underwater combat styles.

Outlook for the Next Five Years: The industry will deepen its development around four key themes: Silence, Intelligence, Connectivity, and Unmanned. The stealth and endurance of nuclear submarines remain the cornerstone for major powers, while intelligent and modular conventional submarines and large-size UUVs will be the focus of development for medium powers and asymmetrical combat forces.

III. Competitive Structure and Company Analysis Global Competitive Landscape: - First Tier (System Integrators) - Second Tier (Key Subsystem Suppliers): Raytheon and Lockheed Martin (Combat Systems) from the United States, Babcock from the UK. Various research institutes and equipment companies under China Shipbuilding Industry Corporation.

China Company Analysis (Taking China Shipbuilding Group as an example): - Advantages: A complete system from R&D design to final assembly manufacturing; backed by a large domestic market with stable demand; able to concentrate resources for significant breakthroughs under national strategic drive. - Challenges: Some high-end technologies still depend on imports or require breakthroughs; strict restrictions from political factors in the international military trade market. - Strategy: Adhere to independent innovation to clear industrial bottlenecks; deepen "military-civil integration" to leverage civilian technologies for military applications; actively explore military trade exports and expand into friendly nation markets.

IV. Technological Level and Characteristics Global Leading Level (U.S., Russia): - Stealth Technology: Uses next-generation vibration-damping valves, pump-jet propulsion, and electric propulsion, with noise levels nearing ocean background noise. - Detection Technology: Wide-band conformal sonar arrays, low-frequency active towed arrays, and laser/non-acoustic detection technologies greatly improve detection distance and precision. - Weapon Systems: Hypersonic missiles (e.g., Russia's "Zircon"), smart torpedoes, and long-range cruise missiles expand strike ranges and penetration capabilities. - Unmanned Systems: Large UUVs (e.g., U.S. "Orca") capable of transoceanic autonomous navigation and strikes.

Domestic Technology Level and Characteristics: - Rapid Catch-up: Achieved or approached world advanced levels in AIP technology, conventional submarine stealth, and some nuclear submarine technologies. - System Breakthroughs: Transitioned from single-platform to systematic combat, significantly enhancing the informatization of command and control systems. - Existing Shortcomings: Still lag behind international top levels in core components (high-end chips, precision sensors), basic software (underlying architecture of combat systems), and overall nuclear submarine performance (reactor natural circulation capability, noise level).

V. Policies and Development Plans The following are key national policies and plans that have driven industry development in recent years concerning submarine technology equipment: Based on the comprehensive information, it is clear that as of 2025, there are several distinct development trends in the global submarine technology equipment sector at the policy level: - Major Powers Focus on Nuclear Submarine Modernization: The U.S., Russia, the UK, and France have collectively invested heavily in updating and expanding their strategic nuclear submarines and attack nuclear submarines, underscoring the growing significance of nuclear submarines as a cornerstone of national strategic deterrence. - Unmanned and Intelligent Development Becomes a Clear Direction: China has explicitly stated in its policies the development of deep-sea intelligent unmanned platforms, while Russian President Putin has noted that multifunctional underwater robotic systems will significantly determine the naval future. This indicates that unmanned intelligent combat equipment has transitioned from a technical concept to strategic consensus, becoming key to future underwater combat capabilities. - Alliance Cooperation and Production Capacity Becoming Key Challenges: Multinational cooperation projects, exemplified by AUKUS, continue amidst complex international environments, but countries are also realizing the importance of their shipbuilding capabilities. Policies in both the U.S. and the UK include specific measures and substantial investments aimed at enhancing domestic shipbuilding capacity, indicating that a strong domestic industrial base is a prerequisite for achieving grand strategic goals.

VI. Market Size and Forecast According to data from the International Institute for Strategic Studies, the global submarine and related equipment market size was around USD 45 billion to 50 billion in 2023, driven by geopolitical conflicts, aging fleet replacements, and technology upgrades. It is forecasted that by 2030, the market will grow at a compound annual growth rate of 4% to 6%, reaching USD 60 billion to 70 billion. The UUV market is expected to grow significantly faster than the overall market, with an annual compound growth rate exceeding 15%.

China Market: - Current Situation: As the world's largest shipbuilding country and one of the nations with the fastest naval equipment development, China's submarine equipment market is a core engine for global growth, characterized by substantial and stable annual investments. - Forecast: With support from the 14th Five-Year Plan and subsequent plans, the domestic market will continue to expand, focusing on new-generation strategic nuclear submarines, long-range attack nuclear submarines, AIP conventional submarines, and supporting clusters of unmanned underwater vehicles, with an expected annual market size exceeding USD 10 billion.

VII. Development Opportunities The industry is currently experiencing a strategic opportunity window driven by both geopolitical factors and technological revolutions, highlighted in the following four dimensions: 1. “Explosive” Opportunities for Unmanned Intelligent Equipment Systems: - Task Decoupling and Capability Multiplication: UUVs are no longer merely auxiliary equipment for submarines but are forming independent combat systems. Large UUVs can serve as "consumable long-range missile platforms,” while medium UUV swarms can execute distributed reconnaissance and electronic warfare missions, creating new opportunities for companies focusing on overall design, autonomous navigation, and swarm algorithms. - "Software-defined" and "Agile Upgrades": Unlike the decades-long upgrade cycle of traditional submarines, the combat capabilities of UUVs heavily rely on iterative software algorithms. This offers technology companies with strong AI development capabilities, especially those with experience in unmanned driving, reinforcement learning, and edge computing, an excellent entry point into the military supply chain. - Low-Cost Saturation Attack Concept: Utilizing relatively low-cost intelligent unmanned swarms for asymmetric strikes against costly surface ships or key infrastructures is becoming a "game changer" for medium-sized countries and non-state actors, generating a huge market demand for mid- to low-end unmanned underwater vehicles.

2. Opportunities for “Changing Lanes” Due to Technological Upgrades: - Practicalization Window for Quantum Technology: Quantum navigation can provide precise positioning in GPS-denied environments, while quantum communication can achieve theoretically unhackable underwater secure communications. Currently, countries are at the initial stage of engineering applications, offering pioneers the chance to establish standards for the next-generation underwater combat system. - "Cognitive Advantage" Enabled by Artificial Intelligence: Future competition will transcend platform stealth and focus on decision-making speed. The application of AI in target recognition, threat assessment, and tactical decision support can compress the closed-loop time of submarines from minutes to seconds, which is key to achieving dimension-reduction strikes. - Energy and Power Revolution: The application of lithium-ion batteries on conventional submarines (e.g., Japan's "Taigei Class") has demonstrated significant advantages. The next steps will involve enhancing fuel cell efficiency and miniaturizing small nuclear power sources (like the one used in Russia's "Poseidon"), leading to revolutionary breakthroughs in autonomy for all underwater platforms.

3. Market Expansion Opportunities from Global Equipment Upgrades: - "Baby Boom" Submarines Retiring Collectively: A large number of submarines built during the late Cold War (e.g., U.S. "Los Angeles" class, Russia’s "Kilo" class) will reach the end of their lifespans in the next 10 to 15 years, creating a sustained demand for replacements and leading to a prolonged market peak. - Military Expansion in the Asia-Pacific Region: Driven by regional security situations, countries such as Australia (through AUKUS), India, South Korea, Japan, Vietnam, and Indonesia are actively expanding or modernizing their submarine forces through direct procurement, technology transfer, or joint production, generating substantial orders for global shipyards and system suppliers. - Second-Hand Equipment and Upgrade Services Market: Extending the life of aging submarines, modern retrofit projects, and transferring decommissioned equipment to lesser navies constitute a large and profitable derivative market.

4. "Technology Spillover" Opportunities from Deepening Military-Civil Integration: - Feedback from Commercial Industrial Chains: Mature high-energy-density battery technologies from electric vehicles, high-performance chips and sensors developed in consumer electronics, and advanced composite materials used in aerospace can all be adapted and applied in military domains, significantly reducing R&D costs and cycles. - Transition from "Civilians Supporting Military" to "Military for Civil Use": Technologies developed for military UUVs, such as autonomous obstacle avoidance and path planning, can seamlessly transition to civil applications in seabed exploration, pipeline inspection, and marine scientific research, opening new commercial growth points for positive cycles.

This report, “2025 Research Report on Domestic and International Submarine Warfare Technology Equipment Development,” covers the following main content: - Global Overview: Systematically analyzes the development trends, driving factors, and innovations in the operational modes of submarine combat forces globally. - Focus on Key Technologies: Deeply analyzes the current status and trends of core key technologies that determine submarine combat capabilities, including detection, communication, defense, and artificial intelligence. - In-Depth Research by Country: Provides detailed country-by-country studies of submarine equipment, technology, concepts, and development trends in major countries and regions, with specifics down to models, weapon systems, and project progress. - Regional Power Analysis: Tracks and analyzes the development of emerging submarine forces in Japan, India, South Korea, etc. - Domestic Assessment and Recommendations: Based on comparative analysis, it objectively evaluates the current status and levels of China's submarine technology equipment, identifies the challenges faced, and proposes targeted and actionable development strategies and concrete suggestions.

Directory - Chapter 1: Overview of Foreign Submarine Warfare Technology and Equipment Development - Section 1: Analysis of Global Submarine Warfare Trends and Driving Forces - Section 2: Overview of Key Countries and Regions' Submarine Warfare Technology and Equipment Development - Section 3: Innovations in Major Submarine Combat Modes and Concepts - Chapter 2: In-Depth Study of Key Technologies in Foreign Submarine Warfare - Section 1: Submarine Detection and Perception Technologies - Section 2: Key Technologies for Submarine Communication - Section 3: Anti-Torpedo Defense Technologies - Section 4: Artificial Intelligence Technologies in Submarine Combat Systems - Chapter 3: Status of U.S. Submarine Warfare Technology Equipment Development - Chapter 4: Status of Russian Submarine Warfare Technology Equipment Development - Chapter 5: Status of European Countries' Submarine Warfare Technology Equipment Development - Chapter 6: Status of Other Countries' Submarine Warfare Technology Equipment Development - Chapter 7: Assessment of Domestic Submarine Warfare Technology Equipment Levels and Development Suggestions

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