The acquisition also likely will result in a lessening of competition in the market for military radars. Raytheon is not only a supplier of high power amplifier MMICs but is also a major supplier of the radar systems of which these devices are critical components. Prior to announcement of the acquisition, TI had teamed with other radar systems suppliers to develop MMICs that met the required specifications for DoD weapon systems. Without access to the latest high power amplifier MMICs, a radar manufacturer is at a serious disadvantage for upcoming military radar competitions. Successful entry into the production and sale of high power amplifier MMICs is difficult, time consuming, and costly.
Entry requires advanced technology, skilled engineers, and costly customized equipment.
A potential entrant would have to engage in difficult, expensive, and time consuming research to develop designs and production processes that can economically and reliably produce high power amplifier MMICs. These designs and production processes must be perfected in order to successfully bid for a military radar program. It is unrealistic to expect new entry in a timely fashion to protect competition in upcoming military radar projects. Nor can low power amplifier MMIC producers reposition their product offerings in a timely manner to provide effective competition. Hughes Aircraft Co., Lockheed Martin Corp., Northrop Grumman Corp., and ITT Corp., incumbent firms that have gallium arsenide foundries and experience in low power amplifier MMICs, would need at least two to three years to become effective competitors for high power amplifier MMICs for military radars.