The Only Domestic Military Infrared Imaging Sensor Developer
Supplying to LIG Nex1, Hanwha Systems, etc.
Legislation for Priority Purchase of Domestically Developed Products
As news emerged that LIG Nex1 is pursuing the acquisition of Ghost Robotics (GRC), interest in military robots has increased. Since the outbreak of the Russia-Ukraine war, governments around the world have been increasing their defense budgets. Once countries begin deploying military robots in actual combat, competitive moves to secure military robots are expected to emerge.
On the 11th, i3system closed trading at 36,450 KRW, up 13.91% from the previous trading day.
According to the Stockholm International Peace Research Institute (SIPRI), global defense spending in 2022 reached $2.24 trillion (approximately 2,915.36 trillion KRW), a 3.7% increase compared to 2021. The United States, China, and Russia accounted for 56% of global defense spending.
Researcher Kwak Min-jung of Hyundai Motor Securities explained, "China is playing the role of a powder keg in Asia by asserting territorial claims over the East China Sea and South China Sea areas and declaring a forceful unification of Taiwan," adding, "The United States and South Korea aim to respond to missile defense systems and mosaic warfare through the kill web."
The kill web analyzes and provides data collected from various sensors such as satellites, drones, radars, and other intelligence-gathering platforms. Utilizing artificial intelligence (AI) and machine learning algorithms, it supports commanders and operational personnel in quickly deciding effective measures based on real-time analyzed information.
She continued, "In future warfare, soldier systems involve equipping combatants with various devices to enable detection and strike capabilities," adding, "The U.S. Army signed a contract with Microsoft on September 5 for a new version 1.2 headset."
As the nature of warfare is expected to change, LIG Nex1 plans to acquire a 60% stake in Ghost Robotics, a developer of quadruped robots, to secure a future growth platform and enter the U.S. defense market. The expected acquisition date is the end of June next year, but the timing may vary depending on approval procedures from relevant domestic and international agencies, including those in the U.S.
Researcher Yang Seung-yoon of Eugene Investment & Securities explained, "While major robot companies such as Boston Dynamics and Anibotics are boycotting military use, Ghost Robotics is emerging as the most promising option for military robots." He added, "A reduction in troop numbers is expected in major countries, and unmanned-manned teaming (MUM-T) will be actively utilized on future battlefields," and "LIG Nex1's investment will lead to preemptive technology investment and securing business items."
When LIG Nex1 enters the military robot market, i3system is likely to benefit. i3system is the only domestic mass supplier of military-grade infrared image sensors. Infrared image sensors are used in military supplies such as tanks, armored vehicles, and guided weapons. The company has supply contracts with Hanwha Systems, LIG Nex1, and others.
Infrared image sensors enable the acquisition of image and temperature information even in harsh environments where visual confirmation is difficult, such as at night, in smoke, or during severe weather. They are used in surveillance equipment and search and tracking devices. i3system expects the global military infrared image sensor market to continue its high growth rate. Since i3system began mass production in 2010, domestic products have been replacing imports. After successfully localizing the technology, infrared image sensors are now prioritized for necessary weapon systems. High-resolution infrared image sensors are classified as strategic materials, and both products and technology exchanges are strictly limited.
Military-grade infrared image sensors are core components of advanced weapons, and most countries pursue policies prioritizing domestic products considering security of system weapon types and quantities, ease of maintenance, and export freedom. i3system is expanding supply to develop advanced infrared image sensors and establish a stable early mass production system. The company is also actively pursuing overseas exports for greater growth.
Researcher Kwak Min-jung said, "i3system is the only domestic mass supplier of infrared image sensors based on proprietary sensor technology," and analyzed, "Only seven countries worldwide possess infrared image sensors, making the technological entry barrier very high."
They developed an uncooled 8㎛ (micrometer) pitch infrared sensor. The pitch of infrared refers to the distance between individual pixels, with lower values classified as higher specification. i3system can produce at low cost without system integration loss by reducing pixel pitch. The TiOx-based sensor with 8㎛ pixels has proven structural robustness and temperature stability, allowing expanded application in both military and civilian uses. Based on technological competitiveness, the company continues to grow. In the third quarter of this year, it recorded sales of 32.1 billion KRW and operating profit of 4.2 billion KRW, increases of 66.4% and 115% respectively compared to the same period last year. Researcher Lee Han-gyeol of Kiwoom Securities forecasted, "Due to increased frontline demand, a new factory expansion is planned," adding, "After completion, production capacity is expected to expand to about 200 billion KRW."
Researcher Baek Jun-gi of NH Investment & Securities said, "We expect expansion of production facilities for both uncooled and cooled sensors by the end of this year," analyzing, "The facility will produce uncooled sensors, which are expected to see market expansion in drones, autonomous driving, and advanced infantry, as well as the latest T2SL cooled sensors."
The financial investment industry expects demand for infrared image sensors to surge through the U.S. Army's 'Integrated Visual Augmentation System (IVAS)' project, which is part of its combat power enhancement program. Microsoft (MS) supplies the 'HoloLens' augmented reality (AR) headset for the IVAS project. It is known that infrared sensors are included in the HoloLens. Soldiers equipped with IVAS, which includes sensors, communication devices, and navigation equipment, can view 3D operational maps or check battlefield information sent from higher units without using separate terminals.
i3system is also expanding its business into the space satellite sector. The company is actively participating in the field of space optical cameras, which correspond to the 'eyes' of satellites. It is also developing LIDAR sensors, expected to be one of the important sensors in the future.
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