“The payload is the system. Drones become sub-systems”

By: Roni Lifshitz

Thirdeye Systems received a grant of NIS 900,000 from the Israel Innovation Authority and the Ministry of Defense for the development of a Non-GPS based navigation solution, totaling in NIS 1.8 million. Non-GPS based navigation eliminates the dependence on satellite communications and immune to GPS jamming efforts. This is a new market for a company that was known mainly for its electro-optical smart algorithmics.

Lior Segal, CEO and co-founder  of the Natanya-based company (in the center of Israel), told Techtime the market is rapidly changing: “In the past, the drone was considered by customers as a ‘main system’. “However, today we see a different approach:, drones are becoming a sub-system within the complete solution. The center of interest has shifted towards the payload. This dramatic change helped us to win a Ministry of Defense NIS 9 million project, in which we take the place of a main contractor.”

Locating people inside buildings

Thirdeye was founded 12 years ago by Lior Segal, the CTO Yoel Motola and the COO Gil Barak. The idea for the company resulted military service were Lior and Yoel took active role in urban warfare events in 2009 in their role as combat infantry officers. Segal: “We started talking about a problem we faced as warriors: how to find out a person inside a room without using a screen. This is how the idea of ‘third eye’ was born: A thermal camera that identifies human beings and provides a silent warning to the warrior. We needed to find a way how to integrate this capability into a compact kit, flashlight-like gadget, placed on the personal weapon.”

With the help of Ministry of Defense Thirdeye had developed its unique algorithm and IR sensors for the warrior personal weapon, which were delivered to IDF special units that immediately put them into operational use. In 2015 it won a NIS 2 million order from the MoD for these systems called Cerberus. However, at that drones began to play a vital role in the civil and military markets, and Thirdeye decided to adjust its technology to be used with drones.

Thirdeye's Chimera payload for drones. Credit: Techtime
Thirdeye’s Chimera payload for drones. Credit: Techtime

The first product for the new market was Chimera: An electro-optical system that includes a thermal camera, a daylight camera, and people identification algorithmics, enabling identification across wide areas. The system performed its first baptism of fire during Operation Guardian of the Walls in middle of 2021. Segal: “Our main market today is the local market. We collaborate with companies such as Elta Systems, Elbit, Aeronautics and the Israel Aerospace Industries.”

“The company employs fifty employees, with all the development, manufacturing and assembly works done in Israel. Even the AI systems’ database was developed here by us, without using external databases or sub-contractors. Our systems are platform-agnostic and can be installed on any drone – civil or military- as well.”

In April 2021 you went public on TASE. Why?

Segal: “This was our way of bringing funding to the company without being considered as a business partner of any costumer, to avoid deterring other costumers.”

What are your main current projects?

“Several products are currently in transition from R&D to serial production. We develop the Chimera-X to provide wider area grip. It is expected to reach maturation early next year. We are developing a platform for drones’ detection called Medusa and a new system for ground platforms. Unmanned vehicles will be able to use our systems for various missions, such as people tracking an people avoidance to prevent unwanted damages, especially in difficult terrain conditions.”

The core of your market is the military. What are the main trends in this market?

“We believe that Western societies refuse to pay heavy prices in a human’s lives, and therefore the need for autonomous instruments is growing. Western armies need many robotic tools in order to save human lives. The war in Ukraine illustrates how modern warfare turns into a multidimensional warfare: The warrior should be aware to everything that is happening around and above him.”

Translated by P. Ofer


Strong Currency drives Elbit to offshore production

Above: Elbit’s self-propelled howitzer gun system, ATMOS

Elbit Systems announced 20% growth in sales during Q3 2021, to $1.36 billion, as compared to $1.13 billion in the third quarter of 2020. Gross profit in the third quarter amounted to $371 million (27% of revenues), compared to $302 million in Q3 2020. Elbit is a major Israeli defense and homeland security solutions provider with a broad portfolio of airborne, land and naval systems and products. Backlog orders as of September 30, 2021 was approximately $13.6 billion.

Last month it was awarded a contract to operate Texan T-6C training aircrafts for the UK Air Force, a $100 million contract to provide the Royal Navy with new Electronic Warfare capabilities, a $74 million order to supply airborne munitions for the Korean Air Force and a $106 million to supply its newly SIGMA fully automatic self-propelled howitzer gun systems, to a country in Asia-Pacific.

The problem with the Israeli shekel

But during the conference call following the quarterly results report, it was clear the Elbit in very concerned about the currency situation. Joseph Gaspar, Elbit’s  Chief Financial Officer, brought the issue to the table: “We continue to implement mitigation plans to limit the impact of the strengthening of the Israeli shekel. In the short-term, this includes the adoption of a rolling hedge policy and efficiency measures. Over the longer term, we plan to expand our manufacturing footprint in high quality lower cost countries to better balance our currency exposure and reduce risk.”

Bezhalel Machlis, Elbit’s President and CEO, added some color: “We have dozens of companies all around the world, in Brazil, in the U.S., in the U.K., in Germany, in India and many other places. So we are taking advantage of the positions we have in these markets and we are expanding our facilities there. It helps us first to be more local, to be more crafted and to do more jobs on the ground. And secondly, also to hedge some of our activities, which we do in Israel and other facilities. So all together, we have a long-term plan to improve the profitability of the company.”

Production of howitzer guns in The US

In November 2021, Elbit Systems of America (ESA) announced plans to establish a new 135,000 square foot facility in Charleston, South Carolina, for combat vehicle assembly and integration center of excellence. “The new facility is part of Elbit strategy to expand our engineering and manufacturing capability in the U.S. This facility will create around 300 new jobs. We expect operations in the facility to begin by the third quarter of 2022, to support contracts ESA received from the Israeli Ministry of Defense for the supply of self-propelled howitzer gun systems.”