SEOUL – South Korean aerospace companies are basking in the afterglow of their country’s landmark satellite launch this week and aim to play a bigger role in the national space program after reaching this key milestone.
Hanwha Aerospace, part of conglomerate Hanwha Group, manufactured all six engines for the domestically developed Nuri, or “world,” rocket that sent the test satellite into orbit on Tuesday. The success came eight months after the country failed in its first attempt to send a dummy satellite into orbit.
Hanwha Group said last month that it will invest 2.6 trillion won ($ 2 billion) in the defense and aerospace business by 2026, launching a task force called Space Hub to coordinate the conglomerate’s operations in the sector. Hanwha Systems, its defense and IT services arm, is meanwhile investing 456 billion won in the satellite communication and electronic antenna businesses, according to Nomura.
Korean Air Lines, the country’s biggest carrier, won a 20 billion won project from the science ministry earlier this month to develop 3-ton engines for the upper part of two-stage rockets by 2027. KAL is also working on drones and an urban air mobility business as well, using its expertise in air traffic control systems and airplane simulators.
“We plan to become a leading new space company by completing this engine development project successfully,” the company said in a statement. “We will continue to make efforts to grow as a launch service company for small satellites.”
Korea Aerospace Industries, the state-controlled defense company which assembled the rocket, is developing satellites for both commercial and military purposes. KAI also plans to sell satellite images.
Hyundai Heavy Industries, which established a launch umbilical tower and facilities for fueling the rocket, said it will develop its technology further to contribute to the country’s space industry.
Investors, however, seemed to be more concerned with worsening macroeconomic conditions than buoyed by the launch. Shares in Hanwha Aerospace fell a total of 13.2% for two days after the launch, before rebounding to rise as much as 6% on Friday afternoon.
South Korea spent 2 trillion won to develop Nuri – a project worked on by 250 researchers from the Korea Aerospace Research Institute, the country’s version of NASA.
But the country’s overall space budget lags those of other countries. According to the science ministry, it came to $ 616 million in 2021. In comparison, it said for the same year the US budget stood at $ 48.6 billion, China was $ 9.1 billion and Japan’s came to $ 3.3 billion.
South Korea also has work to do to become more competitive in terms of cost. The Korea Economic Daily newspaper reported on Thursday that the country paid $ 32,595 per kilogram of payload, an amount about 20 times that of SpaceX’s Falcon Heavy.
Analysts say that companies will have more chances in the future as the government ramps up the program. Nomura said officials are planning to order KAI to supply 41 satellites starting from 2026. Each one costs 100 billion won.
South Korea follows countries such as the US and Japan in throwing the weight and resources of the state behind space development in cooperation with private companies. As the US has shifted to a bigger role by the private sector, notably with Elon Musk’s SpaceX and Jeff Bezos’ Blue Origin, the South Korean government is likely to accelerate the transfer of its leadership to the private sector after the launch.
“The companies will realize bigger revenue as the government plans to let private companies take over more portions [of the space program]”Eon Hwang, a Nomura analyst, told Nikkei Asia.” If the launch had failed, the transition may have been delayed. ”
Hwang said the government is poised to give a 600 billion won-order to either Hanwha Aerospace or KAI next month as the country plans to launch a rocket every year from 2023 to 2027.
South Korea’s success comes as the global space industry could generate revenue of more than $ 1 trillion or more in 2040, rising from $ 350 billion in 2020, according to Morgan Stanley. The US investment bank said privately-held US companies have been developing space technologies, with ambitions such as manned landings on the moon and airplane-borne rocket launchers.