The Mar k et f or Ant i -Shi p

Mi ssi l es


Pr oduc t Code #F658




A Spec i al Foc used Mar k et Segment Anal ysi s by:






Missile Forecast

2007
August 2007
Anal ysi s 3
The Mar k et f or Ant i -Shi p Mi ssi l es
Tabl e of Cont ent s
Table of Contents .....................................................................................................................................................1
Executive Summary .................................................................................................................................................2
Introduction................................................................................................................................................................3
Trends..........................................................................................................................................................................5
Competitive Environment.......................................................................................................................................6
Market Statistics .....................................................................................................................................................12
Table 1 - The Market for Anti-Ship Missiles
Unit Production by Headquarters/Company/Program 2007 - 2016................................................17
Table 2 - The Market for Anti-Ship Missiles
Value Statistics by Headquarters/Company/Program 2007 - 2016.................................................21
Figure 1 - The Market for Anti-Ship Missiles
Unit Production 2007-2016 (Bar Graph) .................................................................................25
Figure 2 - The Market for Anti-Ship Missiles
Value of Production 2007-2016 (Bar Graph)...........................................................................25
Table 3 - The Market for Anti-Ship Missiles
Unit Production % Market Share by Headquarters/Company 2007 - 2016....................................26
Table 4 - The Market for Anti-Ship Missiles
Value Statistics % Market Share by Headquarters/Company 2007 - 2016.....................................28
Figure 3 - The Market for Anti-Ship Missiles
Unit Production % Market Share by Headquarters 2007-2016 (Pie Chart).............................30
Figure 4 - The Market for Anti-Ship Missiles
Value Statistics % Market Share by Headquarters 2007-2016 (Pie Chart)..............................30
Conclusion ...............................................................................................................................................................31
* * *

Product Code F658 The Market for Anti-Ship Missiles

2007

PROGRAMS
The following reports are included in this section: (Note: a single report may cover several programs.)

AGM/RGM/UGM-84 Harpoon
Chinese Anti-Ship Missiles
Exocet
Gabriel
Hsiung Feng I/II
MILAS
OTOMAT
Penguin/AGM-119
RBS15
RUR-5A ASROC/Vertical Launch ASROC
Russian Anti-Ship Missiles
Sea Killer/Marte Mk 1/Marte Mk 2
Sea Skua
South African Anti-Ship Missile
Type 80 (ASM-1/ASM-2)/Type 88 SSM-1
Product Code F658 The Market for Anti-Ship Missiles

2007

I nt r oduc t i on
The anti-ship missile has helped changed the nature of
naval warfare. However, the foundation for this shift
was laid by the desperate efforts of the J apanese
military to stave off impending defeat during World
War II.
At the beginning of the Second World War, it was a
lucky hit if a single bomb or torpedo was able to sink a
major surface combatant, especially an aircraft carrier.
Naval warships proved quite resilient. Adding armored
decks to aircraft carriers further improved their
durability.
It took two large J apanese aerial attacks on the USS
Yorktown during the Battle of Midway to finally put this
aircraft carrier out of action. Although severely
damaged and set ablaze by these strikes on June 4,
1942, the Yorktown did not sink until J une 7.
As the war turned against J apan, its leaders became
increasingly desperate. J apan could not keep up with
pilot losses. The Great Marianas Turkey Shoot,
which occurred during the Battle of the Philippine Sea
(J une 19-20, 1944), resulted in the loss of 375 J apanese
aircraft compared with U.S. losses of 123. Many of the
U.S. pilots were rescued and able to return to duty,
whereas the majority of the Japanese aircrews were lost.
This fighting broke the back of J apans naval air
service. Thereafter, the quantity and quality of J apans
pilot and flight crews would decline.
In the aftermath of this disaster, the J apanese military
leadership realized that desperate times called for
desperate measures and turned to a new weapon, the
Kamikaze, for salvation.
Imperial J apanese Navy Vice Admiral Takashiro
Ohnishi, commander of the First Air Fleet in the
Philippines, helped conceive the Kamikazes (but was
not the first to order suicide operations). He noted that
an aircraft crashing into a carrier caused more damage
than 10 planes strafing it. Therefore, he formed suicide
units and ordered his pilots to crash their aircraft
(loaded with high explosives) into enemy naval vessels,
to inflict the maximum amount of damage on American
ships with the minimal forces available (the First Air
Fleet had 40 aircraft in the Philippines).
This concept was quickly proved on October 25, 1944.
On that day, the aircraft carrier USS St. Lo was attacked
by five Zero fighters off the Philippine coast. Although
only one Kamikaze actually hit the ship, the resulting
fire caused the ships bomb magazine to explode,
sinking the carrier. The success of attacks like the one
on the St. Lo prompted the J apanese to rapidly expand
the program.
Purpose-built Kamikaze aircraft soon appeared,
including the Yokosuka MXY7 Ohka. This rocket-
powered bomb has been called an anti-ship missile with
a human pilot for a guidance system. The first was used
in March 1945.
By the end of the Second World War, J apans naval air
service had sent 2,525 Kamikaze pilots to their death,
with the Army and Air Force adding another 1,387
(numerous other J apanese soldiers and sailors died
conducting suicide missions that had little influence on
the course of the war).
J apanese records claim Kamikazes sank 81 ships and
damaged 195. The U.S. military acknowledges the loss
of 34 ships, the damaging of another 368 (including 23
aircraft carriers, 5 battleships, 9 cruisers and 23
destroyers), and the death of 4,900 sailors and the
wounding of more than 4,800 servicemen as a result of
Kamikaze attacks.
The uncoordinated nature of J apanese Kamikaze attacks
and the hording of these resources for the defense of the
home islands degraded their effectiveness. Of the
Kamikazes sent against the U.S. fleet in Leyte Gulf,
about one-quarter scored hits or a damaging near miss.
Even with the use of radar, heavy combat air patrols and
massive increases in the number of anti-aircraft guns on
U.S. warships, a distressing number of Kamikazes
(about 10-15 percent) were able to successfully crash
their aircraft into U.S. surface ships in the last days of
the war.
Todays anti-ship missile is the Wests emulation of the
Kamikaze concept but without the sacrifice in human
lives. Fighters and naval surface combatants, even
small fast attack craft, can salvo anti-ship missiles at
warships with a good chance of scoring a direct hit.
These missiles give relatively small platforms the lethal
punch needed to sink almost any foe and the ability to
overwhelm local defenses that otherwise would have
stopped a more conventional surface attack.
No longer does a naval force need to launch massive
airborne attacks to disable or destroy an opponent.
Even small helicopters armed with anti-ship missiles
can inflict considerable damage on a major surface
Continued
Missile Forecast

2007
J uly 2007
Pengui n/AGM-119

Or i ent at i on
Description. Helicopter-launched, anti-ship missile
system.
Sponsor. Penguin was originally sponsored by the
Royal Norwegian Navy in conjunction with the
Norwegian Defense Research Establishment (NDRE)
and Norwegian Naval Logistics Command (NNLC).
Status. Mk 1 entered production in 1972, followed by
the Mk 2 in 1980. Mk 2 Mod 7 production is contin-
uing, as is fabrication of the air-launched Penguin Mk 3
(AGM-119). Norway has commenced development of a
new-generation anti-ship missile, the Nytt Sjomalsmissil
(NSM).
Total Produced. As of the end of 2006, approx-
imately 264 Penguin Mk 1, 668 Penguin Mk 2
Mod 3/5, 409 Penguin Mk 2 Mod 7, 330 Penguin Mk 3,
and 11 NSM missiles of all types (including RDT&E
units) had been completed or were in production.
Application. Anti-ship missile for use on several
classes of frigates and patrol boats. Penguin has been
reconfigured for air and land applications in fixed and
semi-mobile (truck-mounted) units, with orientation
primarily toward coastal defense.
Price Range. The last known information lists the
Mk 2 Mod 7 version of the Penguin for the U.S. Navy at
$733,046 in FY90. The missiles price has since fallen
to about $481,000 apiece. The new NSM could cost in
the area of $800,000 apiece.
Cont r ac t or s
Pr i me
Kongsberg Gruppen ASA http://www.kongsberg.com, Kirkegardsveien 45, PO Box 1003, Kongsberg, 3601
Norway, Tel: +47 32 28 82 00, Fax: +47 32 28 86 20,
Email: office.defence-aerospace@kongsberg.com, Prime
Subc ont r ac t or
Microturbo SA http://www.microturbo/fr, 8, Chemin du Pont de Rup, B.P. 2089, Toulouse, 31019
France, Tel: +33 5 61 37 55 00, Fax: +33 5 61 70 74 45 (TRI 40 Turbojet)
Nammo Raufoss AS http://www.nammo.com, PO Box 162, Raufoss, 2831 Norway, Tel: +47 61 15 36 50,
Fax: +47 61 15 36 60, Email: info@nammo.com (Solid Rocket Motor)

Out l ook
In production
Norway will arm its new frigates with the NSM
An air-launched version of NSM will be offered to
equipment combat fighters
Kongsberg hopes to develop an NSM Block II version
Penguin remains in service and production 0
5
10
15
20
25
30
35
40
45
U
n
i
t
s
Unit Production Forecast
2007-2016
Units 34 42 31 36 39 40 40 40 40 40
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Page 2 Missile Forecast
Pengui n/AGM-119


J uly 2007
TDW, Gesellschaft fr
verteidigungstechnische
Wirksysteme mbH
http://www.eads.net, PO Box 1340, Schrobenhausen, 86523 Germany,
Tel: +49 82 52 990, Fax: +49 82 52 99 6120 (Warhead)

Comprehensive information on Contractors can be found in Forecast Internationals International Contractorsseries. For a detailed description,
go to www.forecastinternational.com (see Products & Samples/Governments & Industries) or call +1 (203) 426-0800.
Contractors are invited to submit updated information to Editor, International Contractors, Forecast International, 22 Commerce Road, Newtown,
CT 06470, USA; rich.pettibone@forecast1.com

Tec hni c al Dat a
Metric Metric Metric U.S. U.S. U.S.
Mk 3 Mk 2 Mod 7 Mk 2 Mk 3 Mk 2 Mod 7 Mk 2
Dimensions
Length overall 318 cm 300 cm 300 cm 10.43 ft 9.84 ft 9.84 ft
Diameter of body 28 cm 28 cm 28 cm 11.02 in 11.02 in 11.02 in
Wingspan 100 cm 140 cm 142 cm 3.28 ft 4.59 ft 4.66 ft
Weight at launch 347 kg 385 kg 340 kg 770 lb 847 lb 748 lb

Performance
Speed Mach 0.8 Mach 0.8 Mach 0.8 Mach 0.8 Mach 0.8 Mach 0.8
Range 7-50 km 30+km 2.5-30 km 3.78-27 nm 16.19+nm 1.35-16.19 nm

Propulsion. Two-stage, solid-propellant rocket motor
produced by A/S Raufoss Ammunisjons Fabrikker.
This company is now part of Nammo (Nordic
Ammunition Company), Propulsion Division. The
Mk 3/AGM-119 uses a single-stage solid-fuel sustainer.
Atlantic Research Corporation (now Aerojet) has a
license to manufacture the Mk 3s propulsion system.
Control & Guidance. Penguin uses inertial en route
guidance, with passive infrared homing during terminal
flight phase, giving it fire-and-forget capability. The
infrared homing system tracks the target and generates
signals that direct the missile to the target. Canard fins
stabilize Penguin in flight. BAE Systems supplies the
canard actuation units. The aerodynamic control
surfaces are hydraulically actuated. Kongsberg is said
to be working on new seeker technology that is
applicable to the Penguin missile.
Launcher Mode. The Mk 1/2 Penguin is fired from a
launcher that is built into a container weighing 500
kilograms (1,100 lb), including the missile. Typical
shipboard installations consist of four or six deck-
mounted launchers. The launch system has been
reconfigured for use in fixed and mobile
(truck-mounted) applications. Norway is considering
the development of a coastal defense version of its
NSM. The mobile NSM system would be known as the
Land-based Anti-ship Missile Battery (LAMB).
The airborne rail launcher for the Mk 3 was developed
by Nobel Industrier Bofors Ordnance (now Saab Bofors
Dynamics). The Penguin Mk 3 can be fired from any
F-16A/B aircraft. Software modifications will make the
Penguin compatible with the Block 30 F-16C/Ds and
with the Block 40 and 50 aircraft in the future. Boeing
and de Havilland are offering the Dash 8 with the
Penguin as an armament option.
Warhead. The Penguin has a 120-kilogram (264-lb)
semi-armor-piercing warhead, designated Mk 19, with
impact fuze. The warheads for the Australian buy were
manufactured under license from Kongsberg by ADI
Ltd, Sydney, Australia. Australian Defence Industries is
the former state-owned defense supplier to the
Australian defense forces. Work on the Penguins
warhead will take place at its facility at Mulwala, New
South Wales.
Var i ant s/Upgr ades
In addition to the original, the Penguin missile family
includes the Improved Penguin Mk 2 shipborne system;
the Penguin Mk 2 Mod 7, which is a development of the
Penguin Mk 3, for helicopters; and the Penguin Mk 3,
which will be deployed by fixed-wing fighter aircraft.
The NSM (Penguin Mk 4) is in the preliminary stages of
development, with studies continuing.
The Norwegian government signed a contract with
Kongsberg Gruppen for the service life extension of its
Penguin missile inventory. The contract was worth
Missile Forecast Page 3
Pengui n/AGM-119

2007
J uly 2007
NOK123 million ($17.4 million) and focused on the
Penguin Mk 2 Mod 5 missiles used on Norways fast
patrol craft. The missiles are expected to remain in
service until 2015.
For additional information, please see the pertinent
entries in the Program Review section.


Penguin
Source: Kongsberg
Pr ogr am Revi ew
Background. Development of the Penguin anti-ship
missile was begun in the early 1960s by A/S Kongsberg
Vapenfabrikk, in conjunction with the Norwegian
Defense Research Establishment. It was in support of a
Norwegian Navy requirement for small, fast patrol boats
with a powerful, striking capability against much larger
ships. Aid from the United States and the Federal
Republic of Germany was provided to this program in
the form of bilateral agreements. Technical and test
support facilities were provided by the U.S. Navy.
Penguin was originally designed for use on small
vessels, but has since been selected for use on larger
ships such as the five Oslo class frigates of the Royal
Norwegian Navy. The missile is mounted on a launcher
built into a container that also protects the missile and
serves as packaging during transit. The entire unit,
including missile, weighs approximately 500 kilograms
(1,100 lb). The box-launchers are deck-mounted and
are ready for immediate firing. Automatic testing is
performed from the missile control panel in the
operations room.
Missile Models. Three versions of the Penguin are in
production, and another is believed to be under develop-
ment by Kongsberg. The Penguin missile for shipboard
use is designated Mk 1 or Mk 2, with the latter having
been produced in several subvariants or mods. It is of
fairly conventional design, with four wings to the rear
and four movable canard control surfaces. Propulsion is
provided by a two-stage solid rocket the first stage is
the boost motor, and the second is the sustainer. The
design criteria for Penguin stated that the missile had to
be able to inflict serious, disabling damage to a
destroyer-size ship. The following provides a
description of the various Penguin versions.
Page 4 Missile Forecast
Pengui n/AGM-119


J uly 2007
Improved Penguin Mk 2. The Mk 2 Mod 3 version of
Penguin was developed in a joint effort with Sweden
and is fitted with an enhanced-performance rocket
motor. This longer range version allows for indirect
attack profiles for enhanced launch platform
maneuvering and survivability. The Mk 2 Mod 3
Penguin equips 14 Hauk class patrol boats of the
Norwegian Navy, eight Kartal class fast attack boats of
the Turkish Navy, and 16 Hugen class fast attack boats
of Swedens Navy. Greece has deployed the Penguin
on six La Combattante class fast attack boats. Australia
has expressed interest in this version to complement the
Harpoon missiles purchased from the United States.
Penguin Mk 2 Mod 7. The Mk 2 Mod 7 Penguin
incorporates an infrared seeker able to discriminate
decoys from the real thing and then deliver a
112-kilogram (265-lb) warhead at Mach 0.8. This
version is being procured by the U.S. Navy for the
current Block I upgrade of the SH-60B Anti-Submarine
Warfare (ASW) helicopter. The Mk 2 Mod 7 is a
development of the Penguin Mk 3 fixed-wing aircraft
capable missile and not a derivative of the shipborne
Mk 2. The Penguin Mk 2 Mod 7 has been designated
AGM-119B by the U.S. Navy.
Penguin Mk 3. Kongsberg continues to develop the
Penguin for various airborne applications, for which
only minor modifications are reported necessary. The
Penguin can be deployed on an F-16 using an adapter
for its pylon and the incorporation of various software
modifications. A modified Penguin, designated Mk 3
without the booster motor and with a smaller wingspan,
is to be used by the Norwegian Air Force F-16s.
Norway ordered 139 F-16s for deliveries through 1987,
including about 30 two-seat trainer versions.
The Mk 3 incorporates a new digital control system,
which enables it to be compatible with the F-16s
existing control system. The Penguin has a new
single-chamber solid-propellant motor and newly
designed, smaller wings that obviate the need for a
wing-folding mechanism that otherwise would be
necessary for the missile to be carried at the F-16
under-wing station.
The Penguin is roll-controlled and has canard control
surfaces that are free-floating during the first 0.3
seconds of its ejection launch from the F-16. The
missile retains the same 119.86-kilogram (264-lb)
bullpup warhead but has a modified Harpoon fuze to
make it more effective against ships. It has a range of
40.23 kilometers (25 miles) and an initial launch speed
of Mach 0.5. The seeker is a passive infrared design
that uses a one-shot argon cooler and incorporates a
spectral discrimination capability to enable the seeker to
differentiate between targets and various decoys. The
high-resolution seeker is designed to allow the missile
to select a well-defined aiming point on the target. For
en route guidance, the Mk 3 relies on the same
semi-strapdown inertial platform as the Mk 2 Mod 7.
However, a radar altimeter has replaced the earlier laser
altimeter to provide improved altitude control at
acceptable costs.
Land-Based Version Proposed
Norway has proposed adapting the Mk 3 to a mobile,
land-based launcher for coastal defense. The system
would consist of a six-missile launcher mounted on a
truck or other vehicle. The missile would have to be
modified with folding wings and an external booster. In
addition to Norway, Spain is a potential customer for
the Penguin Mk 3. The Mk 3 has been designated the
AGM-119A by the U.S. Air Force.
NSM: Penguin Mk 4. Since March 1990, Kongsberg
has been engaged in a developmental program aimed at
designing a follow-on to the Penguin. This is an
attempt by the company to counter the rather low
interest in the current Mk 2 and to provide the Royal
Norwegian Navy with a next-generation missile under
the Structure 2012 plan.
The new ship-to-ship missile, known as the New Sea
Target Missile (NSM, or Nytt Sjomalsmissil) and
defined in the Norwegian staff requirement SMP 6026,
will feature a pair of external boosters that will improve
the systems overall 30-kilometer range out to 100+
kilometers. The sustainer motor will be a turbojet. In
addition, the new version will make extensive use of
composites, to reduce weight, and will be equipped with
a new, more powerful computer. Although this version
will not be supersonic-capable, future versions might
be.
Kongsberg also proposed the addition of millimeter-
wave guidance, a semi-active laser system, and dual-
mode infrared and laser seekers. Various alternative
warheads or payloads, including submunitions for use
against land targets, have also been identified for
upgrading. Other modifications include improved
electronic countermeasures and an imaging infrared
seeker to replace the current IR area seeker. Kongsberg
has been studying the extent to which Penguin can be
incorporated into the NSM.
An 18-month concept definition study began in late
1992 and was completed before the end of 1994. A
seven-year, NOK1.2 billion NSM full-scale
development contract was awarded in early 1997. The
first trials of the NSM were conducted in late 2000 and
continued into 2001. The next series commenced in
2002. Testing continued into 2006.
Missile Forecast Page 5
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2007
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The NSM is planned to be considerably less expensive
than the in-service Penguin and would be deployed in
shipborne and coastal defense configurations. The
NSM is not initially intended to replace the fixed-wing,
aircraft-launched Penguin Mk 3 or the helicopter-borne
Mk 2 Mod 7. Nevertheless, the NSM will be light
enough to be carried by future shipborne helicopters
such as the NH90. The Royal Norwegian Navys new
frigates will be the first surface combatants armed with
the NSM.
The company has been seeking foreign partners to
develop this new missile system. Negotiations were
under way with Matra to cooperate in NSMs
development, but in late 1997, Kongsberg announced
that it had teamed instead with Aerospatiale (which
merged with Matra to form Aerospatiale Matra and is
now part of MBDA). A memorandum of understanding
between MBDA and Kongsberg was signed in early
1999.
MBDA is expected to take a 10 percent stake in the
NSM program and will help to integrate the missile with
the NH90 if it is selected for the medium-range,
anti-ship missile requirement. Besides international
marketing, MBDA will be involved in technical
engineering consultancy, propulsion, and signature
reduction. Microturbo will provide the missiles
turbojet propulsion system, the TRI 40, under
subcontract to MBDA.
NSM Estimated Technical Data
Length, with Booster 3.95 meters
Wingspan 1.4 meters
Wingspan, with Wings Folded 0.69 meters
NSM Estimated Technical Data
Weight, at Launch 412 kg
Weight, Flight 347 kg
Weight, Warhead 120-125 kg
Speed Mach 0.9
Range 120-180 km
Cruise Guidance GPS/INS
Terminal Guidance IIR

In 2000, Kongsberg revealed that it had teamed with
DASA (now part of EADS) and TDW (also part of
EADS) to promote the NSM to the German Navy. The
team was offering improvements to the NSM, including
a TDW-developed warhead (TDW is part of LFK and is
based in Schrobenhausen). Kongsberg hoped to win the
contract to meet the anti-shipping requirements of the
German Navys K-130 corvettes. This contract was
ultimately awarded to Saab Bofors Dynamics, however,
and its RBS15.
A pre-production contract for the NSM was awarded at
the end of 2004. Full-scale production of the NSM
started in 2006. Missile deliveries are to begin before
2010.
Further improvements are being examined, as well as
the development of an air-launched version. This
further improved NSM has been referred to as Block II,
as well as Norseman and Norwegian Multi-Role
Missile. Among the enhancements under consideration
are extending of the NSMs maximum range to 250
kilometers. This range extension could be achieved by
stretching the missiles airframe. A new multipurpose
warhead and a new seeker are also being studied.
Si gni f i c ant New s
Lockheed Martin to Market Kongsbergs NSM Kongsberg Defence & Aerospace and Lockheed Martin
have signed a joint marketing agreement for an aircraft-version of the new Naval Strike Missile (NSM), formerly
called New Sea Target Missile. This weapon will be known as the J oint Strike Missile (J SM). This version of the
missile will be adapted for deployment on the U.S. F-35 J oint Strike Fighter (J SF). This aircraft is being developed
by Lockheed Martin. Funded by Norway and Australia, a study for making adaptations to both the missile and the
fighter craft is already in progress. It is expected that the adaptations will take three years to reach the technological
maturity required for the missile to be an option for deployment on the J SF. (Kongsberg Gruppen, 2/07)
Kongsberg Conducts Tests of NSM in U.S. Over the J anuary 13 weekend, Kongsberg conducted two
successful test firings of the NSM in California, USA.
The test firings were part of the Norwegian Navys final approval of the development phase. The tests were
conducted in the U.S. because the Americans have a test-firing range that allows the missile to be tested over both
land and sea. This is essential for testing several of the missiles functions.
Those successful test firings confirmed the missiles highly sophisticated features and capabilities, above what is
currently demonstrated by any anti-ship missile.
As planned, the missile is ready for deployment on board the new Nansen class frigates and on the new missile
torpedo boats. (Kongsberg Gruppen, 1/07)
Page 6 Missile Forecast
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J uly 2007
Turkey Orders 17 S-70B Seahawk Helicopters Sikorsky Aircraft announced on November 6, 2006, that it
has signed an agreement, making effective a contract with the Ministry of National Defense, Undersecretariat for
Defense Industries (SSM) of the Government of Turkey for 17 new S-70B Seahawk helicopters. First deliveries are
scheduled to begin in 2009. The contract is a Lot 2 agreement, which adds to seven S-70B Seahawk helicopters
currently in the inventory of the Turkish Navy.
The S-70B helicopter is an international derivative of the U.S. Navy SH-60B Seahawk. The S-70B has a fully
integrated glass cockpit with smart multifunction liquid crystal displays and a mission-management system. Its
flexible mission package includes dipping sonar, electronic surveillance measures, forward-looking infrared (FLIR),
multimode radar, aircraft survivability equipment, and Penguin and HELLFIRE missiles.
Multimission capable, the S-70B can perform search and rescue, medical evacuation, surveillance, vertical
replenishment, and utility missions. The S-70B is powered by twin General Electric T700-GE-401C turboshaft
engines. (Sikorsky, 11/06)
Market Intelligence Service Subscribers: For additional news, go to the online E-Market Alert page located in the Intelligence Center at
www.forecastinternational.com and click on the links to the products you subscribe to.
Fundi ng
A contract for the full-scale development of the NSM has been awarded (see the discussion of the NSM above for
details). The costs of this program have been slowly rising. The full-scale development contract was to cost
NOK1.6 billion. In 2004, the Norwegian government estimated that the development phase of this program would
cost a further NOK150 million to complete. Kongsberg will provide this funding.
Cont r ac t s/Or der s & Opt i ons
In December 2004, Norway and Kongsberg signed a contract to prepare for and begin production of the NSM. The
contract is worth NOK200 million and will run for two years. Full-scale production will not begin until after the
formal completion of the development phase.
In J uly 2004, Australia announced that it would procure additional Penguin missiles from Kongsberg. The contract
is worth NOK70 million ($10.4 million). Kongsberg will provide Penguin missiles to arm the SH-2 Seasprite
helicopters operated by the Royal Australian Navy (RAN). Australia had signed two earlier contracts with
Kongsberg for Penguin missiles: one in 1998 and another in 1999. Deliveries of the new Penguins will bring the
total value of the Australian program to about NOK950 million ($142.4 million).
In August 1998, Kongsberg Defence and Aerospace received a $5.3 million contract to meet FY98 production
requirements for the Penguin Mk 2 Mod 7 missile. This contract included the production of four missiles, 45 missile
control test sets, canards/wings, umbilical release units and cables, interconnecting cables, wing lanyards, power unit
cables, alignment power units, and missile power units. Work was to be completed by J anuary 2000. Contract
Number N00019-97-C-0026
In July 1997, Kongsberg Gruppen Aerospace AS received a $6.1 million firm-fixed-price contract for the
procurement of six Penguin Mk 2 Mod 7 missiles for the U.S. Navy. Work was to be completed by April 1999.
Contract Number N00019-97-C-0026
In 1996, the Norwegian military signed a contract with Kongsberg for the development of the NSM. This contract
was worth NOK1.6 billion.
Missile Forecast Page 7
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Ti met abl e
Year Major Development
1960 Design conceived
1963 Research initiated
1964 RDT&E funding allocated with assistance of the U.S. and the Federal Republic of Germany
1967-72 Engineering development begun
1970 First flight tests
1972-73 Operational evaluation
1975 Initial Operational Capability of first version, in Norway
1976 Full-scale production
1980 R&D work begun on air-launched Mk 3 version
1980 Mk 3 ordered by Norway
1984 Initial U.S. Navy procurement announced
1987 Low-rate production of Mk 3/AGM-119
1989 Initial Operational Capability of Mk 3/AGM-119 in Norway
1990 Kongsberg begins research on new version of Penguin (NSM/Mk 4)
1997 Aerospatiale Matra (MBDA) selected to work on NSM with Kongsberg
2000-2007 Penguin production continuing
2006-2007
(a)
NSM production commenced

(a)
Estimate
Wor l dw i de Di st r i but i on/I nvent or i es
The number of countries interested in the Penguin has been declining over the last few years. Brunei and Oman
had mentioned an interest in acquiring anti-ship missiles for their maritime patrol helicopters. Also, the Polish
Navy is interested in upgrading its anti-shipping capability with the acquisition of a new weapon system.
The South African Navy is developing a requirement for a helicopter-launched anti-ship missile as part of its larger
program to acquire new surface combatants. Six companies have already offered proposals to meet its requirement
for six shipborne helicopters.
In 2005, Turkey announced it will upgrade its F-16 fleet. Those upgraded fighters will be capable of carrying the
Penguin anti-ship missile. There was no indication from the Turkish government whether this agreement includes
the purchase of additional missiles from Kongsberg.
User Countries. In addition to Norway, the Penguin missile is in service with the following countries: Australia,
on its SH-2G(A) helicopters; Greece, on six La Combattante III class patrol boats and its S-70B helicopters;
Sweden, on Hugen class patrol boats; Turkey, on eight Kartal class patrol boats; Spain; and the United States.
For ec ast Rat i onal e
Kongsberg plans to remain independent even as the rest
of Europe races to consolidate. MBDA, the European
tactical missile megacorp, has made noise about bring-
ing similar firms on the continent into its fold. Yet any
merger would make Kongsberg a very small part of a
much larger entity, thereby erasing the unique features
of the former. Such an event Kongsberg wants to avoid.
Focused on Niche Market, Forming
Alliances
To succeed, Kongsbergs strategy is to focus on niche
rather than mass markets. The company sees the
strategy as the best way to survive in an industry that
includes giants like MBDA and Raytheon. Yet
Kongsberg has also cultivated relationships with both
firms. In the case of the former, Kongsberg is
cooperating with MBDA in the development of the
NSM.
The NSM is an important program for Kongsberg, and it
plans an unmatched export push. The company hopes
this weapon will enable it to hold on to a share of the
anti-ship/strike missile market in the future.
Page 8 Missile Forecast
Pengui n/AGM-119


J uly 2007
Initially, the NSM will arm Royal Norwegian Navy
surface combatants, such as the Nansen class frigates
and Skjold class fast attack craft. The Nansen class
frigate program is very important to Norway, being the
first new frigate procured in almost 40 years and one of
its most expensive. Later, maritime patrol aircraft,
combat fighters and helicopters may also carry this
missile. Adding the NSM to the weapons suite of the
Lockheed Martin F-35 J SF is a huge boost for this
program: expanding its marketing scope and sales
opportunities.
Now, Kongsberg is looking for foreign partners to
develop this so-called Block II version. Australia was
mentioned as a potential partner, but its selection of the
J oint Air-to-Surface Stand-off Missile (JASSM) for its
fighters has ended its interest in an air-launched NSM.
Development difficulties have set back the start of NSM
production. Deliveries of production missile are to be
under way by 2010. Additional program delays could
easily push back further this missiles introduction.
Oslo is also struggling with a tight defense budget.
Despite the pending introduction of the NSM, Norway
plans to keep the Penguin in service to 2015, longer
than once anticipated. The Penguin Mk 2 Mod 7
missile is still in production. Kongsberg says this
helicopter-launched missile remains in demand due to
its advanced capabilities, especially in the littoral
warfare environment. The company is also seeking new
customers in new markets. New orders could possibly
keep the Penguin line active through the end of the
decade.
Ten-Year Out l ook
ESTI MATED CALENDAR YEAR UNI T PRODUCTI ON
Designation or Program High Confidence Good Confidence Speculative
Thru 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Total
Kongsberg Gruppen ASA
NSM
11 19 27 31 36 39 40 40 40 40 40 352
Penguin MK 2 MOD 7
409 15 15 0 0 0 0 0 0 0 0 30
Subtotal 420 34 42 31 36 39 40 40 40 40 40 382

Total 420 34 42 31 36 39 40 40 40 40 40 382


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