The presence of the Iranian Shahed-136 kamikaze drone is increasingly felt on the global battlefield. Recent reports suggest that this low-cost drone may have been used in a recent attack, highlighting the renewed threat posed by such drones. As drones emerge as a key element in modern warfare, South Korea's defense industry is still in the early stages of responding to the attack drone market.
According to the defense industry on May 17, major companies and startups in South Korea, including Korea Aerospace Industries (KAI), are developing small attack drones. At the Drone Show Korea 2026 earlier this year, KAI unveiled its I-type small kamikaze drone designed for armored targets and II-type small kamikaze drone for personnel. LIG Defense and Aerospace showcased an AI-based swarm drone under development in collaboration with the Defense Science Research Institute.
These drones represent a step forward from existing interception and anti-drone systems to more offensive capabilities. However, industry insiders cite a significant limitation in the development of attack drones: a lack of market viability and profitability.
This year, the Ministry of National Defense allocated approximately 148.4 billion won ($112 million) for drone projects out of a total defense budget of 19.9653 trillion won ($15 billion). A substantial portion of this budget is earmarked for reconnaissance and surveillance, leaving limited investment for attack and expendable drones. The role of attack drones in defense projects remains minimal.
One industry official stated, "We are focusing on developing unmanned systems that can be used in manned-unmanned hybrid systems, but we still face limitations in terms of mass production and price competitiveness."
Smaller startups are facing similar challenges. Nears Lab, a maker of swarm AI drones, reported a revenue of 6.6 billion won ($5 million) and an operating loss of 16.6 billion won ($12.5 million) last year. The company recently secured a $10 million contract in the Middle East, seeking a turnaround, but profitability remains elusive. Another startup, Pablo Aviation, recorded a revenue of 10.9 billion won ($8 million) and an operating loss of 14.5 billion won ($11 million) last year.
Moreover, South Korea's drone industry still relies heavily on Chinese components. Currently, many parts used in domestic drones, including batteries, motors, controllers, GPS, and cameras, are sourced from China, except for flight controllers. If these components were to be localized, they might lose price competitiveness compared to Chinese products.
The government has secured a budget of 33 billion won ($25 million) this year to train 500,000 drone operators. The Ministry of National Defense plans to purchase 11,265 commercial small drones for training, distributing at least one to each squad in major army field units and training institutions. However, industry experts point out that the actual operational systems and regulations for battlefield use are still in their infancy.
Kim Seung-yeon, president of the Korea Drone Utilization Association, remarked, "The domestic drone industry is realistically expanding primarily in the fields of information verification and surveying. For drones to be effectively utilized in combat, there needs to be an expansion of business scale and the establishment of conditions for soldiers to obtain drone operation certifications."
* This article has been translated by AI.
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