Risk Analysis and Competitiveness Assessment of the South Korean Military Aircraft Supply Chain

South Korea’s defense exports have continued to grow steadily, driven by the strong performance of major programs such as the FA-50 light attack aircraft and the second export batch of the K2 main battle tank (MBT). At the same time, supply chain risks have intensified due to US–China trade tensions, rising raw material prices, and embargoes on Russian inputs. These pressures risk longer delivery delays and weaker export competitiveness. In response to similar challenges, the United States, in its National Defense Industrial Strategy (NDIS), outlined concrete steps to strengthen supply chain resilience and cooperation with allies. In the European Union, the European Defence Industrial Strategy (EDIS) emphasizes deeper intra-regional integration and greater self-sufficiency in Europe. Both frameworks share a common understanding: vulnerabilities within the defense supply chain translate directly into security risks. This insight carries important implications for Korea. Against this backdrop of fragmenting global supply chains, we analyzed the supply chain for Korea’s military aircraft and identified major risk factors. For the FA-50 program, we classified and evaluated 52 defense contractors based on systems specialty (avionics, propulsion, fuselage, and components) and evaluated their financial performance, dependence on imports, and reliance on Korea’s main systems integrator, Korea Aerospace Industries (KAI). The results of the analysis point to the existence of relatively stable supply chains for avionics and propulsion systems, but small average firm size and low productivity levels are key challenges facing the supply chain for major components and fuselage systems. Moreover, the propulsion and components segments are notably reliant on imports (31 and 25.4 percent, respectively), underscoring the need to localize supply and secure alternative channels. In this paper we also perform a comparative case study contrasting the FA-50 program with Italy’s M-346/FA program. This analysis shows that the FA-50 benefits from a stable and reliable procurement network. But this network is heavily concentrated in the United States and a small group of countries; the supply chain for the M-346/FA is more resilient thanks to its more diversified sourcing. The results of the analysis carry three strategic implications for Korea’s military aircraft industry. First, there is a clear need to pursue technological self-reliance in avionics and propulsion systems by localizing major links in the supply chain. Second, the supply chain features a large number of small and medium-sized enterprises (SMEs); efforts are needed to enhance the competitiveness of these firms. Finally, it is critical to expand the participation of fuselage and components suppliers in global value chains. Integrating these priorities within a coherent supply chain governance framework is essential to stabilizing production, safeguarding technological resilience, and enhancing Korea’s competitiveness in the global defense market.