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Overview
Overall Status
In 2007, production value of Korea's domestic aerospace industry stood at US$2.2 billion, up 21.1% from the previous year.
- This includes government R&D (sales in the aerospace sector of Korea Aerospace Industries Association) in the space industry.
- In the aerospace industry, growth in production results mainly from the recent production of T-50, the launching of KHP development, production and development of military supplies, and an increase in exports.
Imports for 2007 increased 0.4% year-on-year to US$3.13 billion.
- This slight rise is due in part to a relatively stable import structure taking root following a surge in the number of airplanes following the increase in outbound air passengers in 2006.
Domestic demand for 2007 posted a year-on-year increase of 6.1% or US$4.76 billion. The rationale behind the increase in domestic demand is identical to that behind the increase in imports.
Export in 2007 reached US$597 million, up 26.5% from the year earlier on a surge in exports of parts following the recovery of demand for finished aircraft which had been sluggish due to the slowing global economy and terrorism, as well as infectious diseases.
- In addition, the increase in export of aircraft parts as an offset trade in exchange for the purchase of military aircraft can also be cited as one of the main reasons.
Supply and Demand in the Domestic Aerospace Industry
(Unit: US$ million, %)
| Description | 2000 | 2005 | 2006 | 2007 | |||||
|---|---|---|---|---|---|---|---|---|---|
| Results | Year-on- Year Increase |
Results | Year-on- Year Increase |
Results | Year-on- Year Increase |
Results | Year-on- Year Increase |
||
| Supply | Production | 1,152 | 14.2 | 1,398 | 17.8 | 1,515 | 8.4 | 1,861 | 22.8 |
| Import | 1,165 | 7.9 | 1,902 | 34.9 | 3,118 | 63.9 | 3,129 | 0.4 | |
| Total | 2,317 | 10.9 | 3,300 | 27.1 | 4,633 | 40.4 | 4,990 | 7.7 | |
| Demand | Domestic Demand |
2,005 | 9.5 | 2,911 | 30.8 | 4,161 | 42.9 | 4,393 | 5.6 |
| Export | 312 | 20.9 | 389 | 4.9 | 472 | 21.3 | 597 | 26.5 | |
Source: Korea Aerospace Industries Association (KAIA), Aerospace (Spring 2008)
On the other hand, the space sector is insignificant in production due to its R&D-oriented nature.
- The aircraft industry and the space industry are 94:6 in terms of production ratio, indicating that the space industry still remains weak in performance. However, the space industry will likely show signs of increase at a steady pace (based on production by firm which is recorded apart from government-led projects).
- Within 2008, a science and technology satellite-II, the STSat-2, is scheduled to launch via KSLV-I (Korea Space Launch Vehicle-One) at the Naro Space Center on Oenaro Island, S. Jeolla Province, whose construction is set for completion this year, and which has been equipped with a launch pad, mission control, and assembly and test facilities for propulsion systems at a total cost of KRW150 billion in investment. Therefore, the prospective launch of the STSat-2, combined with the successful completion of Korea's astronaut project, will likely contribute greatly to the development of the space industry.
Trends in Technology Development
In terms of aircraft technology, Korea has secured the capacity to develop low-grade aircraft on its own.
- The turboprop engine-powered basic trainer aircraft, KT-1, was completed using indigenous development prior to being provided to the Ministry of National Defense. An advanced trainer capable of supersonic speed, the T-50, is currently in production following the completion of development which benefited from U.S. technology support.
It can be said that the overall level of technology in Korea's aircraft industry has reached 80% of that of advanced countries, while manufacturing, processing and assembly technologies are viewed to be nearly equal to those of advanced countries.
- With respect to high-tech materials and engines, however, development capacity remains considerably weak at 30-50% of that of developed countries.
- Currently, fixed wing aircraft is in the indigenous development stage, as is the case with the KT-1 and T-50, while rotary wing aircraft is in co-development (KHP project).
The Ministry of National Defense has recently initiated the Korea Helicopter Program (KHP) to develop approximately 250 units, thus garnering new interest in the country's helicopter industry.
- KHP is a huge government-led project whose development cost only is roughly US$1.3 billion, while the entire initiative will require at least US$15 billion, including production and maintenance and repairs.
- The KHP is being conducted on the basis of a systematic division of tasks among participating organizations. A private company, Korea Aerospace Industries (KAI), leads the program as systems integrator, while government defense R&D institute the Agency for Defense Development (ADD) is in charge of developing military parts, and governmental civil aerospace R&D institute KARI is responsible for the development of parts for civilian and military use.
The space industry differs significantly in technology from item to item. At present, structure-related manufacturing technologies stand at 90% of those of advanced countries.
- With regard to satellites, Korea has secured the necessary technologies to design low-earth orbit satellites, and completed indigenous development of small-size rockets and launch vehicles.
Technology - Korea vs. Advanced Countries
| Item | Advanced Countries | Korea |
|---|---|---|
| Aerodynamic Shape Design |
· Interpretation of a full- range of speed areas - Subsonic to hypersonic · Design/Interpretation of stealth |
· Interpretation of subsonic/supersonic speed: compares with that of advanced · Interpretation of transonic: some experience · Interpretation of hypersonic: no experience · Design/Interpretation of stealth: no experience |
| Structure/ Materials |
· Development of high- tech materials · Development of smart structure |
· Full-scale airframe design/interpretation: equal to those of advanced countries - Aero-elastic, high durability, damage tolerance analysis, etc. · Weak in smart structure and high-tech materials |
| Aero- Electronics |
· Sensor fusion technology · Integration technology in avionics warfare · AESA technology |
· Integration of avionics weapons systems - Includes key software (S/W) development technology · Weak in development of LRU |
| Flight Control | · Development of fly-by- light system - In the commercialization stage · Stealth control technology |
· Experience in development of fly-by-wire · Development capability relating to mechanical control device (KT-1) · Development capability of UAV |
| Manufacturing/ Assembly |
· Smart structure Processing/ Manufacturing capability · Compounding structure shaping technology |
· Manufacturing/Assembly of full-scale - airframe: equal to advanced countries · Secured technology to process compounding structure |
| Test Assessment |
· Test & Assessment concerning all areasof the aerospace industry |
· Wind tunnel/Structure/System/Maneuver capability of full-scale airframe · No experience in testing and assessment for some areas - Hypersonic, EMI/EMC, extreme environment testing, etc. |
| Space Technology |
· Top-tier technology secured in all areas of the space industry - (fierce competition for development) |
· Still in the beginning stage as opposed to advanced countries, but at a considerable level in satellites/rocket technology and satellite reception apparatus (30-90% for each area) |
Source: Korea Aerospace Industries Association (KAIA), Aerospace (Spring 2008)
Status of Major Manufacturers
Major players in the domestic aerospace industry include KAI, KAL and Samsung Techwin, all of which combine to account for nearly 85% of sales in the domestic aerospace industry.
Representative Companies in the Domestic Aerospace Industry (2007)
(Unit: KRW billion)
| Company Name | Aerospace | No. of Employees |
Ownership | Revenues | FDI Ratio | Remarks |
|---|---|---|---|---|---|---|
| Korea Aerospace Industries |
Sacheon, S. Gyeongsang |
2,800 | Samsung, Hyundai, Industrial Bank |
800 | N/A | Sole System |
| KAL | Gimhae, S. Gyeongsang |
1,500 | Samsung, Hyundai,Industrial Bank | 235 | N/A | Aerospace |
| Samsung Techwin |
Changwon, S. Gyeongsang |
2,000 | Samsung Group | 575.9 | N/A | Aeroengine |
| Hanhwa | S. Chungcheong | 300 | Samsung Group | 50 | N/A | Aeronautics |
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