Expansion of Domestic Production for Next-Generation Fighter Jet Components

On the 14th, a model of the Korean fighter jet KFX was unveiled at the 'Seoul International Aerospace and Defense Industry Exhibition 2019 Media Day' held at Seoul Airport in Seongnam, Gyeonggi Province.
Seongnam - Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Yang Nak-gyu]The proportion of domestically produced parts used in Korean fighter jets (KF-X) and light armed helicopters (LAH) will be expanded.

According to the Defense Acquisition Program Administration (DAPA) on the 16th, companies will be recruited this year to participate in the 'Core Parts Localization Development Support Project.' This year, the project has been expanded to 11 development tasks to activate parts localization. The focus will be on localizing parts applied to the currently developing KF-X and LAH, and approximately 30 billion KRW will be invested over the next five years in companies localizing these tasks.

Core parts localization refers to the project of developing domestic products to replace imported core parts used in weapon systems. Small and medium-sized enterprises mainly participate, but some development tasks allow participation from large and medium-sized companies as well.

Final participating companies will receive up to 75% of development costs within a maximum limit of 10 billion KRW per task for up to five years, and upon successful development, they can supply through negotiated contracts.

In addition, DAPA plans to guarantee a higher defense industry cost profit rate than before to companies applying localized parts during system development to encourage active participation from defense companies. The profit rate for parts localization will be expanded from the existing 3% to 10%.

DAPA emphasized that with the enactment of the 'Act on the Promotion and Development of the Defense Industry' in February, the legal and institutional foundation for parts localization has been established, and the core parts localization project will be further expanded in the future.

Announcements for this year's core parts localization development support project tasks and company recruitment can be found on the websites of DAPA and the Defense Technology Quality Institute. Applications will be accepted until the 18th of next month, and the final participating companies will be selected in June.