ThyssenKrupp's Warship Division CEO: Market Could Triple as Defense Spending Surges

In the ever-evolving landscape of global defense, one company stands at the forefront of a potential market explosion: ThyssenKrupp Marine Systems (TKMS). CEO Oliver Burkhard recently shared his vision for the future, predicting that the attainable market for TKMS could double or even triple by the end of the decade. This bold forecast comes on the heels of a significant shift in German defense policy, which has opened the floodgates for increased spending and investment in the sector.



The catalyst for this surge in defense spending is the German parliament's approval of a major fiscal package. This package includes changes to long-standing debt policies, allowing for higher defense expenditures. Burkhard emphasized the unprecedented nature of this move, stating, "When it comes to the defense budget, there is more or less no limit anymore." This shift in policy is a direct response to the escalating geopolitical tensions and conflicts around the world, particularly the ongoing war in Ukraine.

The implications of this increased defense spending are far-reaching. For TKMS, it means a significant boost in production capacity and the ability to meet the rising demand for naval vessels and submarines. Burkhard acknowledged the challenges in building capacity, noting that "Everybody has higher budgets. Everybody wants to have it faster, and the demand is very strong." To address these challenges, TKMS has already acquired a new shipyard in Wismar, which will be used to produce new vessels for Germany, Norway, and Israel.

But the story doesn't end there. TKMS is also exploring strategic partnerships and joint ventures to further expand its capacity. In 2025, the company formed a joint venture with India's Mazagon Dock Shipbuilders to design and engineer six submarines for the Indian Navy. This partnership not only expands TKMS's market reach but also leverages local expertise and resources, which is crucial for meeting the growing demand for defense technologies.

The increased defense spending is also driving a shift towards unmanned sea drones, which Burkhard described as an "extension" to current naval platforms. He gave an example, saying that customers may not order four submarines, but maybe two, with 50 autonomous vehicles. This shift not only diversifies TKMS's product offerings but also allows for more efficient use of resources, potentially increasing overall production capacity.

The increased appetite for defense spending has led to a surge in ThyssenKrupp's share price, with a 155% increase year-to-date as of March 19. This momentum improves prospects for a spinoff this year, as Burkhard revealed, "We will try to do that by this calendar year." The spinoff of TKMS from ThyssenKrupp and its listing on the Frankfurt Stock Exchange will allow the company to operate more independently and potentially attract more specialized defense investors, further boosting its ability to meet rising demand.

In conclusion, the projected tripling of TKMS's market aligns with the global trend of increased defense spending, driven by geopolitical tensions and conflicts. The German government's fiscal package and the significant revenue growth of German defense companies like Diehl and Rheinmetall further validate this trend. As TKMS navigates this new landscape, its strategic advantages, increased production capacity, and partnerships position it well to capitalize on the growing defense market.