Market Overview
The South Korea Aerospace Fasteners Market revenue was valued at USD 196.0 million in 2023 and is projected to reach USD 374.8 million by 2032, registering a CAGR of 6.7% during the forecast period (2024-2032).
The South Korean aerospace fasteners market is witnessing enormous expansion due to the country's strong aircraft manufacturing industry, significant government investments, and strategic worldwide alliances. Leading companies such as Korea Aerospace Industries (KAI) and Hanwha Aerospace are at the forefront of progress in commercial and defense aerospace initiatives. Korea Aerospace Industries (KAI) recorded a substantial 91.4% surge in net profit, amounting to USD 167 million, in 2023. Additionally, the company experienced a notable 37% growth in consolidated revenue, reaching USD 2.9 billion. As a result, the aerospace fasteners market is expected to experience further growth.
Market Dynamics
South Korea Aerospace Fasteners Market Drivers
Government Support and Investment
The South Korean government is providing active assistance to the aerospace industry through several efforts, including implementing the Aerospace Industry Development Plan. This strategy allocates significant financial resources to improve the competitiveness of domestic aerospace enterprises, encourage innovation, and facilitate technological progress, hence promoting growth in the aerospace fasteners market.
In addition, in May 2024, Korea's most recent government agency will assume official responsibility for overseeing the nation's space development. In May 2023, Korea reached a significant achievement in this project by successfully launching a domestically produced satellite into orbit using a domestically constructed spacecraft. This accomplishment places Korea in the company of other space-faring nations such as the United States, France, Japan, Russia, China, and India. The future of this project entails the development of an advanced launch vehicle that will exceed Nuri's capabilities in terms of satellite deployment. KASA and its subsidiary agencies, the Korea Aerospace Institute and the Korea Astronomy & Space Science Institute, will lead this endeavor.
South Korea Aerospace Fasteners Market Restraints
Dependency on Imports
South Korea imports specialized materials and components for aerospace fastener manufacturing. According to the most recent data from the United States Department of Commerce as of May 2023, South Korea is the 13th largest market for aerospace exports. According to the most recent US Census data, the United States aerospace exports to South Korea would total USD 2.2 billion in 2022. Disruptions in the global supply chain, such as trade barriers, logistical issues, or geopolitical tensions, can all impact the availability and pricing of these crucial materials, limiting South Korean aerospace fastener manufacturers' production capacities.
Furthermore, in 2022, South Korea imported USD 54 million in titanium ore, most of which came from Kenya, Vietnam, Norway, India, and Senegal. The total volume of titanium metal imports in 2022 was around 12,800 metric tons. Delays in the delivery of titanium or exotic alloys, for example, could impact aerospace fastener makers' production schedules, potentially resulting in bottlenecks and longer customer lead times. Furthermore, changes in global market conditions, such as currency exchange rate variations, tariffs, and raw material costs, can impact the price of imported goods. This volatility can cause unpredictability in manufacturing costs and profits for aircraft fastener makers.
South Korea Aerospace Fasteners Market Opportunity
Growing Military and Space Sector
The military aviation sector benefits from increased government investment in R&D, procuring modern fighter planes and helicopters, and transport and training aircraft from local manufacturers. Furthermore, increased security concerns from North Korea and expanding cross-border conflicts in Asian countries have prompted the South Korean government to focus more on improving its defense capabilities.
Additionally, in March 2023, the Ministry of Science and ICT (MSIT) revealed the specifics of its 2023 space program budget. South Korea is to spend 874.2 billion won (USD 674 million), a 19.5% increase over the previous year, and this is by far the most significant budget the country has ever allocated for space programs. While approximately 586.2 billion won (USD 450 million) would be spent on expanding the domestic space sector, it also intends to pay approximately 148 billion won (USD 114 million), or 17% of its budget, on developing a space carrier rocket. As a result, manufacturers may capitalize on rising demand and increase their market share by delivering high-quality fasteners that match the strict standards of defense and space applications.
Regional Analysis
South Korea seeks to strengthen links with global R&D projects, including Airbus, by investing approximately 400 billion won (USD 292 million) in creating materials, parts, and equipment in five important defense sectors, including artificial intelligence, semiconductors, and space. The Seoul Metropolitan Area is home to various aerospace research institutions, universities, and government agencies, all contributing to South Korea's aerospace technology innovation and advancement. While certain locations focus on manufacturing and production, others specialize in research, development, and government efforts, all of which contribute to the growth and advancement of South Korea's aerospace industry.
Segmental Analysis
The South Korea Aerospace Fasteners Market is segmented based on material, product, and application.
The market is further segmented based on material such as aluminum, titanium, and alloy steel. Aluminum is the leading material in the aerospace fasteners market and is estimated to grow at a CAGR of 6.1% over the forecast period. Aluminum's popularity can be attributed to its great properties, including its lightweight nature, high strength-to-weight ratio, and corrosion resistance, which make it an ideal choice for aircraft applications. These characteristics contribute to the aircraft's total weight reduction, increased fuel efficiency, and lower operating expenses.
The market is segmented by product categories into nuts and bolts, rivets, and screws. Rivets lead the aircraft fasteners market, which is estimated to rise at a CAGR of 6.4% over the forecast period. Rivets are widely used in the aviation industry for their excellent durability, strength, and ability to make long-lasting and robust connections. They play an essential role in the construction of aeroplanes, notably in ensuring safety and performance by maintaining structural integrity.
The market can be divided into three categories based on application into military aviation, commercial aviation, and civil aviation. Commercial aviation drives the aerospace fastener market, which is estimated to increase at a 6.5% CAGR over the forecast period. This dominance stems primarily from a high demand for new aircraft as global air traffic grows, fleets expand, and older aircraft are retired. The continued expansion in passenger and freight traffic necessitates the development of new commercial aircraft, increasing demand for aerospace fasteners.
