[Nuriho Launch] Growing Korea's SpaceX... Emergence of the Space Industry Ecosystem

The Korean launch vehicle Nuriho (KSLV-II) is soaring powerfully, emitting flames at the 2nd launch pad of Naro Space Center in Goheung-gun on the 21st. Nuriho is a three-stage launch vehicle designed to deploy a 1.5-ton class practical satellite into low Earth orbit (600~800km), and it is the first domestically produced launch vehicle completed entirely with domestic technology from engine design to manufacturing, testing, and launch operation. / Goheung = Photo by Joint Press Corps

[Asia Economy Reporter Kim Bong-su] On the afternoon of the 21st, South Korea's 'space independence' and the New Space era were led by the successful launch of 'Nuriho (KSLV-2)'. Although it reached the target altitude and successfully separated the satellite mock-up, it failed to enter orbit, resulting in an evaluation of 98% success.

As government space development projects such as the Nuriho launch continue, attention is also focused on the economic effects, including the activation of the private space industry. Private companies that produced 80% of Nuriho are dreaming of a Korean version of 'SpaceX' and are placing their hopes on the space era emerging alongside future industries such as autonomous driving, artificial intelligence (AI), urban air mobility (UAM), and drone delivery.

◆ 2 trillion won invested, 5 trillion won production inducement effect

According to the Korea Aerospace Research Institute (KARI) and the Ministry of Science and ICT, Nuriho, developed with an investment of 1.9572 trillion won since March 2010, has already shown considerable economic effects. About 1.5 trillion won, which is 80% of this budget, returned as sales revenue to private companies. Compared to the 177.5 billion won share for private companies in the Naroho budget, which was successfully launched in 2013, this is nearly ten times more. Additionally, the production inducement effect of the Nuriho development project is estimated at about 5.0543 trillion won, the value-added inducement effect at 1.6665 trillion won, and the employment creation effect at 17,496 jobs.

The government and KARI are particularly creating a space industry ecosystem where private companies participating in this Nuriho development can acquire technologies for launch vehicle manufacturing, launching, and operation, and survive independently, in line with the trend of private sector-led space development. In fact, KARI established an industry-academia joint design center from the early design stage of development to support technology transfer, personnel training, and collaboration to improve technological capabilities. A KARI official said, "Through the development of Nuriho, we are supporting the creation of an industrial ecosystem and strengthening industrial capabilities," adding, "We are enhancing industrial capabilities through technical cooperation such as system final assembly, engine assembly, and manufacturing of various components, and gradually expanding the role of companies to support their growth as launch service providers in the future."

◆ 80% made by private companies

During the 12 years and approximately 2 trillion won invested in the Nuriho development process, about 30 major companies and a total of 300 companies with 500 personnel participated in parts manufacturing, assembly, engine production, and launch pad construction. A representative company is Hanwha Aerospace. Hanwha Aerospace virtually took charge of the production and assembly of major engine-related parts such as the thrust system, piping assembly, propellant supply system, engine final assembly, oxidizer and fuel pumps, turbines, and TVC drive system/thrust system. Doowon Heavy Industries, which manufactured the notoriously difficult 2nd and 3rd stage propellant tanks and tank connectors, also gained attention for developing special welding technology. Korea Aerospace Industries (KAI), responsible for system final assembly and the 1st stage propellant tank, was also recognized for its technological capabilities. Hyundai Heavy Industries managed the construction of the second launch pad, which requires challenging technology to withstand high temperatures of 3300 degrees and thrust of 300 tons, using purely domestic technology. Ko Jung-hwan, head of the Korean Launch Vehicle Development Project at KARI, explained, "The greater significance lies in securing space launch vehicle technology with our own technology," adding, "SpaceX in the U.S. did not achieve this alone. It was supported by over 60 years of technology and industrial infrastructure accumulated by NASA, but we are in the process of building that under KARI's leadership." He added, "In the future, domestic companies will have opportunities to play roles like SpaceX."

Yong Hong-taek, 1st Vice Minister of the Ministry of Science and ICT, also said just before the Nuriho launch, "More than 300 Korean companies participated and independently produced engines and all components," adding, "Until now, launch vehicle development was centered on KARI, but we plan to transfer launch vehicle technology to the private sector through five additional launches."

◆ Space development competition, Korea has its share

Having accumulated independent space launch vehicle technology, the most important step for space development, South Korea has officially entered the fierce global space development competition despite the COVID-19 pandemic. The government announced in the space development plan confirmed in February this year that it will make massive investments, including the launch of about 100 satellites in the future.

Projects to develop and utilize various advanced satellites, such as the next-generation medium-sized satellite No. 1 launched in March, are actively progressing. Medium and large satellites such as Cheollian 3, Multipurpose Practical Satellites 6 and 7, as well as ultra-small satellite swarm systems usable for military purposes, second-phase military satellite communication systems, reconnaissance satellites for strategic target surveillance, and ultra-small satellite system acquisition are also being actively pursued for military satellite development. The 'lunar exploration orbiter' is scheduled for August next year, and a lunar landing probe using the next launch vehicle is planned for 2030. The Korean Positioning System (KPS) will also be established by launching eight satellites by the mid-2030s. It will provide essential location, navigation, and timing information for the 4th industrial revolution and national infrastructure operations such as autonomous vehicles and drones. It is expected to create employment for 60,000 people and generate economic value exceeding 7 trillion won. Notably, Korea currently operates eight satellites but is expected to increase to 100 by 2027. Globally, the satellite imagery industry is growing at an average annual rate of 13%, and is expected to reach $12.1 billion by 2026.

South Korea is actively participating in the U.S. 2024 manned lunar exploration program 'Artemis Project' and is also actively promoting projects such as the Lunar Gateway construction project, which is expected to replace the International Space Station (ISS), and asteroid exploration.

U.S. investment bank Morgan Stanley declared 2019 as the inaugural year of the aerospace industry and predicted that the space industry market size will grow to $1.1 trillion (about 1,265 trillion won) by 2040, led by private companies. The space tourism industry, initiated by Virgin Galactic, Blue Origin, and others in July, is also expected to reach a market size of $4 billion (about 4.6 trillion won) by 2030.