Submarine AIP System Market

Submarine AIP System Market Outlook (2024 to 2034)

The global submarine AIP system market is calculated at a size of US$ 386.2 million in 2024. Worldwide demand for submarine AIP systems is projected to increase at a CAGR of 3.2% to touch a market valuation of US$ 529.2 million by the end of 2034.

The earliest submarines were human-powered with hand-cranked propellers, which remained highly susceptible to dangerous and fatal accidents. Such instances laid the foundational pillars for submarine AIP (air-independent propulsion) systems and drove their adoption at a significant rate across the globe. With time, submarine AIP systems gained the status of being a core element behind the flexibility of submarines.

Against a backdrop of the ever-evolving security demands, the market for submarine AIP systems offers bespoke innovations aimed at different features such as maximizing strategic values, improving performance, and enhancing operational efficiency. With the AIP system becoming an important part of new-age submarine designs, end users are on the lookout for AIP-equipped submarines, and are willing to invest in same.

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Key Market Growth Drivers

• Growing demand for high submerged periods and cost-efficiency is driving the adoption of AIP-equipped submarines, marking new opportunities for the operating market players in submarine AIP systems.
• Increasing funding in the defense sector by governments across the globe is expected to play an important role in driving submarine AIP system market growth.
• A majority of countries are automating a variety of processes, which is positively influencing market growth.
• Cost of nuclear submarines is higher as compared to the AIP-equipped submarines. This is also benefitting market players to a great extent.
• Rising need to provide naval forces with increased capabilities related to maritime security is expected to boost demand for submarine AIP systems. Also, the modernization and upgradation of advanced fleets across the globe are contributing to market growth.

Report Attribute	Detail
Submarine AIP System Market Size (2024E)	US$ 386.2 Million
Forecasted Market Value (2034F)	US$ 529.2 Million
Global Market Growth Rate (2024 to 2034)	3.2% CAGR
East Asia Market Share (2024E)	28.5%
North America Market Value (2024E)	US$ 84.6 Million
Sales of Closed-Cycle Diesel AIP Systems (2034F)	US$ 245.5 Million
Conventional (Diesel-Electric) Submarines Segment Value (2034F)	US$ 360.9 Million
Key Companies Profiled	Siemens; Navantia; General Dynamics; United Shipbuilding Corporation; CSICL; Kongsberg Gruppen; Lockheed Martin Corporation; SAAB; ThyssenKrupp Marine Systems GmbH; China Shipbuilding Industry Corporation; United Technologies Corporation; DCNS.

What is Contributing to Increasing Demand for Submarine AIP Systems?

“Increasing Focus on Underwater Endurance Driving Demand for Second-generation AIP Systems”

Among all the key submarine AIP system market trends, the increasing focus on second-generation systems is contributing to growing adoption. With AIP systems promising the best underwater endurance for submarines, second-generation systems are further expected to take endurance levels a notch higher, adding to the overall efficiency and functionality of the submarines.

All the diesel-electric submarines have faced the brunt of unexpected attacks as they come to the surface or snorkel to recharge batteries. However, the debut of second-generation AIP systems is to rewrite the rules of submarines’ versatility underwater, further lighting the way for new developments to make their way in the submarine AIP system landscape.

What are the Challenges Impeding Market Growth?

“Technical Complexity Demanding Advanced Engineering and Manufacturing Expertise”

AIP systems involve complicated technology that requires advanced engineering and manufacturing skills. These systems have to operate dependably even in extreme underwater environments, necessitating accurate and resilient engineering.

Given the dangerous nature of the fuels and materials used in AIP systems, ensuring their safety is extremely important. The complexity of submarine AIP systems, as well as the requirement for specialized knowledge and skills, make maintenance difficult, impacting the submarine AIP system market size expansion. Overcoming these technical challenges is critical for achieving the high performance and operational readiness expected of the latest AIP-equipped submarines.

Country-wise Insights

East Asia is estimated to hold 28.5% of the worldwide submarine AIP system market share in 2024, and by 2034 it is forecasted to account for a share of 28.6%. Demand for submarine AIP systems in the North American region is projected to rise at 3.1% CAGR during the projection period (2024 to 2034).

Why is the United States Navy Enhancing the Endurance of its Submarine Fleet?

“Focus on Improving Clandestine Operations and Reducing Risk of Detection”

Attribute	United States
Market Value (2024E)	US$ 68 Million
Growth Rate (2024 to 2034)	3.1% CAGR
Projected Value (2034F)	US$ 92.4 Million

The United States Navy is working to improve the stealth and operating endurance of its submarine fleet to increase mission effectiveness. Air-independent propulsion (AIP) systems allow submarines to remain submerged for extended periods without having to surface for air, considerably lowering the danger of discovery by opponents.

Extended submersion capability enables submarines to perform clandestine operations and surveillance more effectively, making AIP systems an essential technology for preserving a strategic advantage in underwater warfare.

How is the Market Shaping Up in Japan?

“Evolving Security Concerns Driving Need for Greater Operational Effectiveness”

Attribute	Japan
Market Value (2024E)	US$ 27.6 Million
Growth Rate (2024 to 2034)	3.5% CAGR
Projected Value (2034F)	US$ 38.9 Million

Japan's continuing defense modernization efforts seek to increase the technological sophistication and operational effectiveness of its military forces. As part of these efforts, Japan is updating its submarine fleet to keep it at the advance of naval capabilities. This plan relies heavily on the incorporation of Air-Independent Propulsion (AIP) systems into both new and current submarines.

AIP systems increase submarines' operational range and endurance, allowing them to remain submerged for extended periods without surfacing, considerably improving their stealth and combat readiness. This upgrading is consistent with Japan's goal of preserving a technological advantage in its defense capabilities, ensuring that its naval forces are well-equipped to face changing security concerns.

Category-wise Insights

Based on fit, the market is segmented into line and retrofit. The line fit segment is projected to account for a significant global market share due to increasing demand for technological advancements in submarine building and shipbuilding.

Which Submarine AIP System Type is in High Demand?

“Growing Demand for Closed-Cycle Diesel AIP Systems”

Attribute	Closed-Cycle Diesel AIP Systems
Segment Value (2024E)	US$ 179.6 Million
Growth Rate (2024 to 2034)	3.2% CAGR
Projected Value (2034F)	US$ 245.5 Million

Submarines with closed-cycle diesel AIP systems function silently and independently for longer lengths of time without having to surface or use a snorkel to get air, which greatly increases their endurance and stealth. This advantage is especially useful in contemporary naval operations when the capacity to evade detection over extended periods is essential. Because of this, navies all over the globe are becoming more interested in closed-cycle diesel AIP systems to improve their submarines' operating capabilities.

What is the Reason for Widespread Use of AIP Systems in Diesel-Electric Submarines?

“AIP Systems Contributing to Reducing Acoustic and Thermal Signatures”

Attribute	Conventional (Diesel-Electric) Submarines
Segment Value (2024E)	US$ 265.7 Million
Growth Rate (2024 to 2034)	3.1% CAGR
Projected Value (2034F)	US$ 360.9 Million

Air-independent propulsion (AIP) systems are extensively used in conventional (diesel-electric) submarines because they enable submarines to stay below for extended time without having to surface or snorkel to refuel. By improving stealth and endurance, this feature gives conventional submarines an edge over other types of submarines in terms of operational flexibility and decreased detection susceptibility. To further increase stealth, AIP systems eliminate the need for the submarine to deploy its snorkel or power its diesel engine.

Competitive Landscape

Key players in the submarine AIP system market are boosting their profits through technical innovation by making significant R&D investments. The purpose of this investment is to raise AIP systems' effectiveness, dependability, and performance.

Integration of contemporary characteristics such as closed-cycle diesel engines, Stirling engines, and fuel cells, provides better products that have longer underwater endurance and more stealth. These technological advancements enable businesses to charge higher prices for advanced technology, leading to market expansion and more profitability.

• In June 2024, Under Project-75I, the Indian Navy intended to purchase six new submarines equipped with Air Independent Propulsion (AIP) technology.
• In March 2024, Iran's Defense Ministry displayed a prototype of a Fateh-class submarine equipped with an air-independent propulsion (AIP) plug during the DIMDEX 2024 expo, which took place in Doha from March 4 to 6, 2024.
• In January 2023, the French-based Naval Group, along with DRDO (India) decided to modernize the INS Kalvari, an Indian Navy Scorpene-class submarine. The goal of DRDO had been to equip submarines with air-independent propulsion systems based on indigenous fuel cells.
• In February 2023, to investigate substitutes for Russian military equipment, the Indian Navy had been acquiring P-75l submarines. The business intends to transfer technologies for air-independent propulsion systems as part of the US$ 5.2 million contract.

Fact.MR provides detailed information about the price points of key manufacturers of submarine AIP systems positioned across the world, sales growth, production capacity, and speculative technological expansion, in this updated market report.

Segmentation of Submarine AIP System Market Research

• By Type :

  • Fuel Cell AIP Systems
  • Stirling Engine AIP Systems
  • Closed-Cycle Diesel AIP Systems

• By Fit :

  • Line
  • Retrofit

• By Submarine Type :

  • Nuclear-Powered Submarines
  • Conventional (Diesel-Electric) Submarines
  • Hybrid Submarines

• By Region :

  • North America
  • Western Europe
  • Eastern Europe
  • Latin America
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa