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Hanwha Aerospace Set to Propel South Korea’s Defense Sector with Advanced Gas Turbine Engine Development

Targeting Homegrown Fighter Jet Engines by 2040, Hanwha Aims to Elevate Korea's Military Industrial Capabilities
South Korea
h 012450.KO Mid and Small Cap 2000
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Hanwha Group, a major South Korean conglomerate, is gearing up to significantly enhance its defense manufacturing capabilities, particularly in the production of gas turbine engines. This ambitious move aims to elevate South Korea’s standing in the global defense industry.

Hanwha Aerospace Co., a key subsidiary of the group, has announced its objective to acquire gas turbine engine design technology for fighter jets by 2040. This vision is backed by substantial investments in research and development. The company’s strategy includes participating in a conceptual study on engine development for aircraft weapons systems, initiated by South Korea’s Defense Acquisition Program Administration.

Gas turbine engines are essential in the defense industry, powering not just fighter jets but also warships, cruise missiles, battle tanks, and self-propelled howitzers. They are as vital to defense as semiconductor technology is to the IT sector.

Presently, Hanwha Aerospace produces gas turbine engines under licenses from global giants like General Electric Co., Rolls-Royce Holdings, and Pratt & Whitney. However, only a fraction of its production costs are incurred domestically.

Recognizing the strategic importance of independent capabilities, Hanwha Aerospace is on a mission to develop over 60 types of materials required for homegrown gas turbine engines. This initiative is crucial for advancing from conventional arms to more sophisticated weaponry. The challenge is formidable, as the development process typically spans 13-15 years.

Hanwha Aerospace Vice President Kim Kyeongwon emphasizes the necessity of self-reliance, especially for advanced military hardware like fifth-generation fighter jets and beyond. The company’s ambition is to possess the indigenous design technology required for manufacturing state-of-the-art military equipment.

Currently, only a handful of countries — the United States, the United Kingdom, France, Russia, China, and Ukraine — possess fighter jet engine design technology. The complexity of these engines is underscored by their crucial role in warplanes, constituting approximately 20% of total production costs and operating in extreme conditions.

Underlining the strategic significance of this venture, Hanwha Group Vice Chairman Kim Dong-kwan views the development of a domestic gas turbine engine as a legacy for future generations.

In line with these aspirations, Hanwha Aerospace plans a substantial investment of 60 billion won to double its annual gas turbine engine production capacity. The expansion, set to start in April with completion targeted by year-end, is timely given the increasing demand. This demand is buoyed by Korea Aerospace Industries Ltd.’s impending export of the KF-21, South Korea’s first supersonic fighter jet, and Hanwha Ocean Co.’s naval vessel construction orders.

Hanwha Aerospace, with a history dating back to 1980 in gas turbine engine manufacturing for combat planes, is poised to surpass 10,000 units in cumulative production. The company has evolved from a mere subcontractor to a technology leader, with major global engine makers seeking its advanced production technology. This transition is exemplified by GE relocating some production lines to Hanwha’s Changwon facility, entrusting the South Korean firm with comprehensive parts manufacturing control.

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