1. Market Research
  2. > Aerospace and Defense
  3. > Defense Market Trends
Saudi Arabia Defense Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Saudi Arabia Defense Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

  • June 2021
  • 115 pages
  • ID: 6101197
  • Format: PDF
  • Mordor Intelligence LLP


Table of Contents

Search Inside

The Saudi Arabian defense market was valued at USD 13.58 billion in 2020, and it is anticipated to register a CAGR of 4.34%, to reach a market value of USD 17.39 billion by 2026.

The country is one of the top military spenders globally and the primary importer of arms from the United States. The high defense spending of the country, due to its robust economy and high GDP, made the market lucrative for several local and foreign players. Several joint venture agreements have been signed since the establishment of the Saudi Arabian Military Industries (SAMI).

Political tensions in the Middle East over the past decade have resulted in the country investing more in the defense sector. Saudi Arabian government has plans to modernize its military by 2030 and is procuring new fighter jets, surface combatants, and armored vehicles. In recent years, it has also increased its focus on C4ISR and cybersecurity solutions.

However, in the past three years, the government reduced its defense spending to focus more on the education sector. Also, recent ban on Saudi Arabia by some of the European countries will have an impact on the procurement of defense equipment which will hamper the market growth during the forecast period.

Key Market Trends
Saudi Arabia Strengthening its Defense Capabilities Amid Tensions in the Middle East

Over the past few decades, the Middle East has become a global hotspot for conflicts, with civil wars raging in Syria, Iraq, Yemen, and Libya. Moreover, the internationalization of civil wars has led to coalitions between countries, which has further disturbed the geopolitical climate in the region. In addition, the Iran–Saudi Arabia proxy conflict, sometimes also referred to as the Middle Eastern Cold War, an ongoing struggle for influence in the Middle East and surrounding regions between Iran and Saudi Arabia, has led the countries to provide varying degrees of support to opposing sides in nearby conflicts. With several nations indulging in armed conflicts in the region, there is a growing push among the countries to obtain military assets, comparable in roles and capabilities to the adversaries. Moreover, the indulgence of global superpowers with advanced military capabilities, like the United States and Russia into the scenario, has further boosted these requirements. Additionally, there are several brewing maritime conflicts in the region. For instance, territorial disputes exist between the countries in and around the Persian Gulf. These include Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates (UAE), and Oman. There is an ongoing state of heightened military tensions between the Islamic Republic of Iran and its allies, and the United States and its allies, in the Persian Gulf region. Such conflicts are forcing the countries involved to enhance their warfighting capabilities. For Saudi Arabia, apart from Iran and its nuclear ambitions, the largest threat is the border clash with northern Yemen’s Houthi rebels, as they battle with Yemeni government forces. The Yemeni group has repeatedly targeted Aramco’s refineries in the coastal cities of Jeddah and Jubail in the past few years. In November 2020, the rebels hit an Aramco plant in Jeddah with a Quds-2 missile, tearing a hole in an oil tank, triggering an explosion and fire. Likewise, in September 2019, drones were used to attack the state-owned Saudi Aramco oil processing facilities at Abqaiq (Biqayq in Arabic) and Khurais in eastern Saudi Arabia. According to the Saudi Arabian officials, more than 10 drones and cruise missiles were used for the attack, and it originated from the north and east. Both facilities were shut down for repairs, cutting Saudi Arabia’s oil production by about half (representing about 5% of global oil production) and causing some destabilization of global financial markets. Such incidents have highlighted the small gaps in the air defense capability of Saudi Arabia. Saudi air defenses have negated several of these attacks by intercepting many of the incoming projectiles. The Saudi Air Force has been using the Patriot PAC-3 as its main ballistic missiles defense system. It is also equipped with a variety of short and medium-range surface-to-air missiles such as the Improved Hawk, Shahine, and Mistral. The Royal Saudi Air Force is the only one in the Middle East that operates the Boeing E-3A Sentry, commonly known as AWACS, which, along with 2 SAAB-2000 Erieye planes, helps provide a strong early warning capability that is crucial for an effective air defense. However, the Yemeni conflict proved to be a costly war of attrition to the Saudis, who are forced to allocate much needed funds to consolidate their air defense capabilities, in addition to the military operations in Yemen. As of January 2020, the Saudi Arabian Military Industries was working on a new national counter-drone system to address asymmetric threats to the country and protect critical infrastructure and domestic military bases. The new system is anticipated to be capable of countering drones of all sizes, including radars, command-and-control stations, and advanced networking capability. Thus, a significant portion of the defense budget is being diverted for enhancing the air defense capability of the Kingdom, which is driving the growth of the Saudi Arabian defense market.

Sea-based Vehicles in the Vehicle Segment is Expected to Register the Highest Growth during the Forecast Period

The regional security environment increasingly emphasizes the importance of naval power. Navies have a front-line role in securing sea lines of communication to ensure freedom of navigation at sea, protecting exclusive economic zones and offshore assets. The navy also plays a crucial role in providing warning and engagement capabilities against air and missile attacks. Saudi Arabia is looking at capabilities to project naval prowess much further than it ever has. Intensifying international competition in the Red Sea on its western flank, Yemen’s implosion and the Horn of Africa’s instability are significant trends that are redefining Riyadh’s maritime threat landscape beyond the Arabian Gulf. The government of Saudi Arabia has initiated the Saudi Naval Expansion Program II, a naval modernization program spanning a period of more than 10 years. The government plans to spend approximately USD 20 billion on new ships (which may replace the outdated East Naval Fleet) and about USD 6 billion on the frigate program built by Lockheed Martin. SNEP II focuses attention on the Royal Saudi Navy’s Eastern Fleet, which last underwent a major modernization program in the 1980s and 1990s. It is driven in large part by a need to counter Iranian naval power, which focuses on an ability to blockade critical maritime choke points, such as the Strait of Hormuz. Under this initiative, the country ordered Multi Mission Surface Combatant Ships (MMSC). In December 2019, Lockheed Martin was awarded a USD 1.96 billion foreign military sales contract to design and construct four MMSC for the country. The delivery of the naval vessels is anticipated to begin by 2023. Similarly, the Saudi Arabian government signed an agreement worth USD 2.1 billion (EUR 1.8 billion) with Navantia in July 2018, to build five Avante 2200 corvettes for the Royal Saudi Naval Forces (RSNF). The delivery of the naval vessels is expected to be completed by 2024. In July 2020, the first of the Avante corvettes was launched by Navantia, and in November 2020, the company launched the second vessel of the five corvettes that were ordered. The Saudi Interior Ministry has been receiving deliveries for a contract estimated at nearly USD 2 billion with German shipyard Lurssen that was concluded in 2014 for nearly 150 patrol boats. They included two 60m large patrolling boats, 20 40m patrolling craft, 80 15m fast patrol boats, and 20 landing craft. Such developments render a positive outlook for the segment during the forecast period.

Competitive Landscape
The market in the country is dominated by foreign players, mainly those from the United States. Notable companies among them include Lockheed Martin Corporation, the Boeing Company, and Raytheon Technology Company, among others. However, the government is trying to develop its indigenous defense manufacturing capabilities. The Government of Saudi Arabia is focusing on implementing policies to ensure that its publicly held defense manufacturers account for more than 50% of its defense revenue share, by 2030. For instance, in April 2018, Saudi Arabian Military Industries (SAMI) signed an agreement with Navantia, a Spanish shipbuilding company, to create a joint venture in Saudi Arabia, mainly to localize 60% of naval industries. According to the Navantia, this venture will be a supplier and integrator of the combat systems for the future naval program contracts in Saudi Arabia. Later, in September 2019, SAMI Navantia Naval Industries signed a USD 987.34 million contract with Navantia to collaborate on Combat System Integration (CSI) on the Avante 2200 corvettes for the Royal Saudi Naval Forces. Such initiatives may reduce the market share of foreign companies in the country during the forecast period.

Reasons to Purchase this report:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 150+ Million searchable statistics with tables, figures & datasets
  • More than 25,000 trusted sources
  • Single User License — provides access to the report by one individual.
  • Department License — allows you to share the report with up to 5 users
  • Site License — allows the report to be shared amongst all employees in a defined country
  • Corporate License — allows for complete access, globally.

ReportLinker may already be registered as a supplier with your company. If you want to Order by PO, check with us first and we'll let you know if we are a registered supplier and what the vendor number is. Otherwise, we'll provide you with the necessary information to register ReportLinker as a vendor.

Ahmad helps you find the right report:

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

We were impressed with the support that ReportLinker’s research specialists’ team provided. The report we purchased was useful and provided exactly what we want.

Category Manager at

ReportLinker gave access to reliable and useful data while avoiding dispersing resources and spending too much time on unnecessary research.

Executive Director at
PwC Advisory

The customer service was fast, responsive, and 100% professional in all my dealings (...) If we have more research needs, I'll certainly prioritize working with ReportLinker!

Scott Griffith

Vice President Marketing at
Maurice Sporting Goods

The research specialist provided prompt, helpful instructions for accessing ReportLinker's product. He also followed up to make sure everything went smoothly and to ensure an easy transition to the next stage of my research

Jessica P Huffman

Research Associate at
American Transportation Research Institute

Excellent customer service. Very responsive and fast.

Director, Corporate Strategy at

I reached out to ReportLinker for a detailed market study on the Air Treatment industry. The quality of the report, the research specialist’s willingness to solve my queries exceeded my expectations. I would definitely recommend ReportLinker for in-depth industry information.

Mariana Mendoza

Global Platform Senior Manager at
Whirlpool Corporation

Thanks! I like what you've provided and will certainly come back if I need to do further research works.

Bee Hin Png

CEO at
LDR Pte Ltd

The research specialist advised us on the best content for our needs and provided a great report and follow-up, thanks very much we shall look at ReportLinker in the future.

Kate Merrick

Global Marketing Manager at
Eurotherm by Schneider Electric

  • How we can help
    • I am not sure if the report I am interested in will fulfill my needs. Can you help me?
    • Yes, of course. You can call us at +33(0) 4 37 65 17 03 or drop us an email at [email protected] to let us know more about your requirements.
    • We buy reports often - can ReportLinker get me any benefits?
    • Yes. Set up a call with a Senior Research Advisor to learn more - [email protected] or +33(0) 4 37 65 17 03.
    • I have had negative experiences with market research reports before. How can you avoid this from happening again?
    • We advise all clients to read the TOC and Summary and list your questions so that we can get more insight for you before you make any purchase decision. A research advisor will accompany you so that you can compare samples and reports from different sources, and choose the study that is right for you.

  • Report Delivery
    • How and when I will receive my Report?
    • Most reports are delivered right away in a pdf format, while others are accessed via a secure link and access codes. Do note that sometimes reports are sent within a 12 hour period, depending on the time zones. However, you can contact us to escalate this. Should you need a hard copy, you can check if this option is offered for the particular report, and pay the related fees.
  • Payment conditions
    • What payment methods do you accept?
      1. Credit card : VISA, American Express, Mastercard, or
      2. You can download an invoice to pay by wire transfer, check, or via a Purchase Order from your company, or
      3. You can pay via a Check made out in US Dollars, Euros, or British Pounds for the full amount made payable to ReportLinker
    • What are ReportLinker’s Payment Terms?
    • All payments must normally be submitted within 30 days. However, you can let us know if you need extended time.
    • Are Taxes and duties included?
    • All companies based in France must pay a 20% tax per report. The same applies to all individuals based in the EU. All EU companies must supply their VAT number when purchasing to avoid this charge.
    • I’m not satisfied. Can I be refunded?
    • No. Once your order has been processed and the publisher has received a notification to send you the report, we cannot issue any refund or cancel any order. As these are not ‘traditional’ products that can be returned, reports that are dispatched are considered to be ‘consumed’.
  • User license
    • The license that you should acquire depends on the number of persons that need to access the report. This can range from Single User (only one person will have the right to read or access the report), or Department License (up to 5 persons), to Site License (a group of persons based in the same company location), or Corporate License (the entire company personnel based worldwide). However, as publishers have different terms and conditions, we can look into this for you.
Purchase Reports From Reputable Market Research Publishers

Backshell Market Forecast to 2028 - COVID-19 Impact and Global Analysis By Type, Material, Military Standards, and Application

  • $ 4550
  • August 2021
  • 189 pages

The global backshell market was valued at US$ 536.84 million in 2021 and is projected to reach US$ 752.59 million by 2028; it is expected to grow at a CAGR of 4.9% from 2021 to 2028. With the growing ...

  • World
  • APAC
  • Defense
  • Industry analysis
  • Aircraft Fleet Size
  • Defense Expenditure


Reportlinker.com © Copyright 2021. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.

Make sure you don’t miss any news and follow us on