Also known as cage armor because of its appearance, spaced armor was an early response to the proliferation of shaped charge warheads. At the time, tank armor was strong enough to defeat nearly all kinetic weapons, and/or more importantly the prime man-portable and light anti-tank weapons used a shaped charge of high explosive. For these to be effective, they need to detonate at a predetermined distance from the surface of the armor plate (usually quite close). Farther than this distance and the resultant explosive gas/plasma jet has lost integrity or may be at an incorrect angle; closer than this and (usually) the jet has not had the distance to properly form.

Spaced armor is the practice of adding thin sheets of armor set off from the main body of the armor, held on by spacing brackets. The advantage of this is that incoming shaped charge warheads (HEAT) will detonate based on the position of the outer armor shell, which is (by design) an incorrect position for penetrating the lower armor plate. Although not as effective as reactive armor, spaced armor is cheaper, easier to mount, and less dangerous to nearby infantry. In addition, it can easily be added on to an existing vehicle as an applique. Typically, the armor is supplied in flat sheets which are mounted to a framework built around the vehicle - as a result, the armor forms a 'cage' around the vehicle, leading to its alternate name. Recently, new forms of spaced armor have been tested which utilize panels of high-strength, flame-retardant fabric to trigger or trap the incoming warhead and fuze, rather than metal. This allows for drastically lower weight panels, improving vehicle performance and endurance.

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