The defense industry is seeing a trend towards deconsolidation, with a focus on smaller, more focused contractors rather than large-scale diversification. This shift is being driven by a 'peace through strength' policy environment. Specific news includes L3Harris Technologies planning to spin off its missile business, and analysis suggests other major contractors like Lockheed Martin could follow suit with similar divestitures. This structural change is a key consideration for investors in the aerospace and defense sector.