Hanwha Aerospace Pursues Next-Generation Engine Following KF-21 Engine Contract

Contract Signed for KF-21 Fighter Jet Engine Supply
Hanwha Aerospace Takes on Challenge of Developing Next-Generation Engine Targeting 2030

Hanwha Aerospace has signed an additional contract to supply engines for the KF-21 (Boramae) fighter jet.

According to Hanwha Aerospace on June 26, the company previously signed a contract worth 556.2 billion won in June last year to supply engines for the KF-21 fighter jet. With the latest contract with the Defense Acquisition Program Administration, valued at approximately 623.2 billion won, the total contract value for the initial mass production batch of the KF-21 amounts to about 1.1794 trillion won. Under this agreement, Hanwha Aerospace will supply around 80 F414 engines by December 2028. The contract also includes follow-up logistics support, such as the supply of maintenance parts, engine maintenance manuals, and on-site technical support.

The KF-21 engine incorporates advanced technologies, including lightweight special materials with high heat resistance, enabling it to maintain stable performance even in extreme environments. Fighter jet engines, which require sophisticated technology, are considered the pinnacle of engine technology. This is because they must be compact and lightweight while delivering explosive thrust, and they also require high durability and reliability.

However, there are challenges. The KF-21 engine is produced by Hanwha Aerospace under license from GE's F414 engine, but the localization rate remains below 50%. The price of imported components is heavily influenced by factors such as exchange rates, and the won-dollar exchange rate has risen by nearly 100 won compared to July last year. Considering the more than 10 types of imported government-supplied equipment, the exact details of which are not disclosed, the impact of exchange rates is expected to be significant. In particular, from South Korea's perspective, continued use of GE engines could pose obstacles to potential exports to countries such as the United Arab Emirates (UAE) and Indonesia, due to U.S. national security-related export restrictions.

Hanwha Aerospace is currently working on developing a next-generation engine, aiming for the mass production schedule of the KF-21 in the mid-2030s. Since 1979, starting with engines for the Air Force's F-4 fighter jets, Hanwha Aerospace has produced over 10,000 engines for aircraft including the KF-5, KF-16, F-15K, T-50, and KF-21 over 46 years, and has independently developed 11 engine models. In April this year, Hanwha Aerospace completed a smart aerospace engine factory covering 16,529 square meters (5,000 pyeong) with an investment of about 40 billion won. Equipped with IT-based quality management and logistics systems, this factory is designed not only for the F414 engine but also with the future development of South Korea's indigenous "Advanced Aerospace Engine" for fighter jets in mind.

In particular, Hanwha Aerospace plans to expand its business beyond engine development and production to include aerospace engine MRO (maintenance, repair, and overhaul). As exports of domestically developed military aircraft such as the FA-50, T-50, and KF-21 increase, and as the localization rate of engines rises, demand for aerospace engine MRO is also expected to grow. According to a report by Samjong KPMG Economic Research Institute, the global aerospace engine MRO market is projected to grow from $43 billion (about 60 trillion won) in 2023 to $63.4 billion (about 88 trillion won) by 2033.

Foreign companies are also expected to participate in the domestic engine development project. The British government has launched a lobbying campaign to become the engine partner for South Korea's next-generation fighter jet. The UK's proposal is for Rolls-Royce, a British company, to participate as a partner in the development of the KF-21 engine.

The Financial Times (FT) reported on June 22 (local time) that British government officials are lobbying to supply engines for South Korea's next-generation fighter jet, the Boramae (KF-21).

A British government official stated, "If Rolls-Royce participates as a partner, it can reduce the project's risks and accelerate the development schedule," adding, "This is not simply about selling engines, but about jointly developing a new engine."