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As the telecommunications industry comes to grips with standards issues, debt loads larger than some countries' GNP, and dozens of unanswered technical questions, the microwave industry is looking for ways to replace its lost wireless revenue. Ironically, this new business may well come from the same source that was lost in 1990 when microwave companies rode off into the wireless revolution: the defense industry.

The defense industry is projected to grow rapidly through at least the middle of the decade, and should require plenty of electronic hardware to power its radically restructured defense forces, along with equipment for homeland security. However, the defense industry of 2003 looks nothing like it did in 1990, when it was abandoned by many microwave companies.

The microwave manufacturers that plan to prosper in this new military environment must deliver not just exceptional performance, low prices, shipments on schedule, and the versatility to provide more than one solution to a given technical problem, but must understand the new departments of Defense and Homeland Security, and their new requirements.

The microwave industry faced the dawning of the 1990s with the prospect that its primary customers and their end users (such as defense contractors and the U.S. government) were likely to need far less of their products in the coming years. Then, just as the future seemed grim, the cellular telephone industry appeared and enjoyed staggering growth for a decade, requiring immense quantities of microwave components and subsystems.

However, this new opportunity came with a major qualification: the new customers and their end users (such as base station and handset manufacturers, and wireless service providers) needed new technology solutions, pricing and delivery that, at the time, seemed impossible to accommodate. To its credit, the industry found ways to meet the needs of their new customers, and many prospered.

Now, a decade after the first shots of the wireless revolution, it's the military that is making seemingly unattainable demands.

Its needs are straightforward and consistent:

• Reduce costs at every level, sometimes by as much as 10 times;
• Reduce delivery times and maintain a strong commitment to scheduling;
• Create new technological solutions without years of development; and
• Provide multiple solutions to technical challenges.

Unfortunately, achieving all of these goals requires more than simply shoehorning existing wireless products into defense applications.

Defense systems are subjected to conditions normal wireless systems will never face, such as severe shock, vibration, temperature cycling, and other environmental conditions. As a result, a large amount of testing and screening is often required, which increases manufacturing costs. Solutions designed for the normal wireless environment are often unacceptable for military use, and a new approach is required that combines experience gained in the wireless markets with a way to build “Hi-Rel” products — while still reducing manufacturing costs.

The United States Department of Defense (DoD at www.dod.gov) has adopted many aspects of the commercial market paradigm, and looks for more than superficial solutions to meet its cost requirements.

The Joint Strike Fighter (JSF) program, which the DoD considers its showcase for future defense procurement, is just one of many programs that require suppliers to substantiate how they are meeting the DoD's low-cost objectives.

The DoD wants manufacturers to do more than just reduce the quoted cost of products. It wants the manufactureres to substantiate how they arrive at their costs.

The goal is to reduce the risk the DoD faces if supplier are offering products at costs too low to sustain over the long term.

For some companies, every area of the organization will be affected, from the front office to engineering, manufacturing, and customer support. Manufacturing techniques and processes must be examined and changed if found incompatible with the new DoD demands.

The DoD's next-generation “networked” war-fighting architecture first demonstrated its potential to link diverse assets in Afghanistan and was much in evidence in Iraq. These current capabilities are just the beginning of a tri-service initiative to create a battle theater environment that links all elements of the force via voice, data, and video communications. These systems will be incorporated into manned and unmanned platforms, and will ultimately be part of the soldier's load, as well. Advanced RF and microwave technology is a key ingredient in the next-generation scenario, and will require components and subsystems that are smaller, lighter, and more cost-effective than ever before.

While the defense systems of the future will require the most advanced technologies the microwave industry can create, it will also require reliable, performance proven components and subsystems for years to come. In fact, some of these older design approaches will also be employed in new systems as well, including JSF. Even though more modern solutions might be more appealing from a technological perspective, proven performance in land, air, and sea-based systems is often a compelling argument for maintaining the status quo.

As DoD and prime defense contractors found out in recent years, some of the companies that made these products have either abandoned the military market to focus exclusively on wireless opportunities, or are simply not willing to build them now that they are many years out of production. This is providing increasing opportunities for those manufacturers with both the ability to deliver these products and the willingness to do so.

They are often small companies with a high level of expertise in a single area that have never abandoned the military market, and continue to prosper while their wireless-only counterparts fight over miniscule margins. The ability to offer solutions based on both new technology and older proven technology is proving to be a benefit in serving legacy systems and the ones of tomorrow.

The good news for microwave manufacturers willing to serve defense applications is that opportunities will likely grow in the future. In fact, projected spending curves indicate that the current level is that actually quite low and will rise dramatically in the next few years. There are challenges to be sure, but enterprising companies willing to make the commitment are likely to find that the effort was well worth the work.

Mason Carter is the chairman, president and CEO of Merrimac Industries Inc. (www.merrimacind.com). He held executive positions with Datatec Industries Inc. and Metex Corp. before joining Merrimac in 1995. Carter holds a Bachelor of Science in marketing from Rutgers University, and an M.B.A. from Fairleigh Dickenson University. He can be reached at mnc@merrimacind.com.