Submarines Market (2026-2036)

The growth of this market is mainly driven by the recapitalization of nuclear deterrent fleets, the expansion of attack submarine programs in response to China's growing naval power, the AUKUS partnership, the replacement of aging conventional submarine fleets across NATO and Asia-Pacific, and the growth of submarine exports. However, the limited capacity of the submarine industrial base and persistent construction delays restrain the growth of this market.

Furthermore, conventional submarine export programs, lithium-ion battery and air-independent propulsion technologies, and extra-large uncrewed undersea vehicles are expected to offer growth opportunities for the stakeholders in this market. However, the scarcity of skilled workers and specialized suppliers remains a major challenge impacting the growth of this market. Additionally, multinational submarine partnerships, multi-year and block procurement, and investment in submarine industrial base capacity are prominent trends in this market.

The Submarines Market comprises the design and new construction of military submarines, including nuclear-powered ballistic missile submarines (SSBNs), nuclear-powered attack submarines (SSNs), conventional diesel-electric and air-independent propulsion submarines (SSKs), and extra-large uncrewed undersea vehicles. The market value covers new construction, including hull and pressure structure, propulsion and power, combat management and weapons handling systems, sonar and sensors, masts and communications, and auxiliary systems integrated during construction. In-service maintenance, repair, and life extension are adjacent markets and are excluded from the market value, as is submarine construction in the Russian Federation, North Korea, and Iran. The market ecosystem extends from specialized steel, reactor, battery, and sensor suppliers to submarine design authorities, shipyards, combat system integrators, and navies.

The market is experiencing strong growth as submarines have become a top priority for major navies. In the U.S., the Columbia-class program to replace the Ohio-class ballistic missile submarines is the Navy's highest acquisition priority. According to the Congressional Research Service, the Navy's fiscal year 2026 budget submission requested about USD 10.9 billion for the Columbia-class program, including about USD 3.9 billion in procurement funding for the third boat and about USD 7.0 billion in advance procurement for subsequent boats, with procurement planned at one boat per year starting in FY2026. At the same time, the Navy has procured 41 Virginia-class attack submarines through FY2025 and requested two more for FY2026, at an estimated procurement cost of about USD 5.0 billion each when procured at two per year.

Capacity, rather than demand, is the defining constraint of the market. The Congressional Research Service reports that although Virginia-class boats have been procured at a rate of two per year since FY2011, actual production has never reached two per year and has been limited to about 1.1 to 1.2 boats per year since 2022, creating a growing backlog of boats procured but not yet built. The Navy and industry aim to raise production to 2.0 and subsequently 2.33 boats per year. Funding appropriated and programmed for the U.S. submarine construction industrial base through FY2028 totals about USD 9.8 billion, excluding a further USD 3.0 billion that Australia is to provide under AUKUS. The first Columbia-class boat has also experienced delays, with a Navy internal assessment reported to indicate a delay of as much as 16 months linked to late delivery of the bow section and turbine generators.

The AUKUS partnership is creating a major new nuclear submarine program. The Pentagon completed a review of AUKUS in December 2025 and stated that the partnership should move full steam ahead. Under AUKUS, Australia is to acquire three Virginia-class submarines beginning in 2032 and subsequently build new SSN-AUKUS submarines with the U.K., and has committed to spend AUD 368 billion over three decades on the program, including investment in the U.S. submarine production base.

Conventional submarine programs are expanding rapidly among NATO and Asia-Pacific navies. In July 2026, Canada selected Thyssenkrupp Marine Systems (TKMS) as the preferred contractor for up to 12 Type 212CD submarines under the Canadian Patrol Submarine Project, describing it as the largest defense procurement in Canadian history, with negotiations to conclude by the end of 2027 and the first four submarines targeted for 2034. Canada thereby joins the German-Norwegian Type 212CD cooperation. In November 2025, Poland selected Saab's A26 design for three submarines under its Orka program, Saab's first submarine export selection since it acquired its submarine business in 2014. These programs, together with ongoing procurements in the Netherlands, Italy, India, South Korea, Japan, and elsewhere, are sustaining strong demand for conventional submarine builders.

This indicates that workforce and supplier capacity, rather than funding, is the binding constraint for U.S. submarine production.

This points to growing demand for lithium-ion and air-independent propulsion technologies and for extra-large uncrewed undersea vehicles as complements to crewed submarines.

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13.2. Customization Options