Southeast Asia's defense buildup puts KF-21 exports in the spotlight

"The continuous bullying of our big neighbor China."

Those were the words of the Philippine military chief of staff at a commanders' conference in July, as he pressed for a stronger national defense. With clashes over South China Sea territorial claims continuing to mount, he argued the country must modernize its armed forces without delay. According to local media reports, the KF-21 is widely regarded as the leading candidate for the Philippines' next-generation fighter acquisition.

Southeast Asian nations seeking to build up their defenses against China are increasingly looking at the KF-21. As South Korea completes a decade-long development program for the supersonic fighter, the intensifying South China Sea dispute is fueling hopes that exports will gain momentum.

Known by its nickname "Boramae," meaning hawk, the KF-21 is South Korea's first domestically developed fighter jet, led by Korea Aerospace Industries (KAI). Capable of exceeding Mach 2.0 and equipped with cutting-edge systems including an active electronically scanned array (AESA) radar, the aircraft is prized for its cost-effectiveness. Development began in 2015 and was completed in July after a decade of work. KAI plans to deliver 40 aircraft to the South Korean Air Force in the second half of this year before pursuing export markets.

The defense industry expects KF-21 exports to take off in earnest, with Southeast Asia at the center of that push. The recent escalation of South China Sea territorial disputes has prompted a wave of military buildup plans across the region.

Indonesia is widely seen as the most likely first export customer. The country has been strengthening its defense capabilities against China through security partnerships with the United States, Japan and others, and has been involved in the KF-21 program since its development phase. An earlier plan to co-produce the aircraft in Indonesia has since been dropped in favor of purchasing finished units directly.

Industry sources regard an Indonesian sale as all but certain. According to Defense Express, a foreign defense industry publication, KAI has proposed selling 16 KF-21 Block 2 aircraft to Indonesia for around $2 billion, with negotiations currently underway. KAI, however, said the details of any export deal have yet to be finalized.

Malaysia is also frequently mentioned as a strong export candidate. The country is pursuing a program to replace its aging fighters in response to the South China Sea dispute. Industry observers note that Malaysia has already signed a contract for 18 FA-50 light combat aircraft, with delivery scheduled for the second half of this year, making a follow-on KF-21 sale a natural next step.

The Philippines, another key FA-50 customer, is similarly seen as a strong prospect for the KF-21. Manila purchased 12 FA-50PH aircraft — the Philippine export variant of the FA-50 — in 2014, then placed an additional order for 12 more in June last year. The Philippines also operates a range of Korean-made weapons systems as its primary platforms, including frigates, patrol vessels and offshore patrol vessels.

Once South Korea completes domestic development of the KF-21's missiles — widely seen as the final hurdle to exports — other defense companies stand to benefit as well. The KF-21 currently carries missiles made by European firm MBDA, meaning each export deal requires approval from the European side. That is why both the government and the private sector have recently been racing to develop a domestic alternative.

The Agency for Defense Development recently announced a research and development project for a long-range air-to-air missile system with a total budget of 1.9 trillion won ($1.36 billion), drawing expressions of interest from Hanwha Aerospace, Hyundai Rotem and LIG D&A. The final developer is expected to be selected in October.