[Diary Point = Reporter Joo-yong Eom] Hanwha Systems has been selected as the preferred bidder for a micro-satellite synthetic aperture radar (SAR) constellation development program commissioned by South Korea's Agency for Defense Development. The company offered ₩368.5 billion, undercutting Korea Aerospace Industries' (KAI) bid of ₩460.3 billion by ₩91.8 billion to secure the top spot.
Hanwha Systems and KAI were the two bidders in the competition. Under the evaluation rules, only companies scoring 85 points or higher out of 100 in the technical proposal review were eligible, with the contract going to whichever qualifying bidder offered the lowest price below the budgeted ceiling. That meant price competitiveness determined the outcome once both companies cleared the technical bar.
There is a discrepancy in how the figures are presented depending on value-added tax treatment. The bid amount recorded in the procurement results was approximately ₩368.5 billion, while Hanwha Systems' corporate disclosure listed a planned contract value of ₩334.97 billion excluding VAT. The company also noted that the final contract amount could change during negotiations.
Satellite manufacturing infrastructure behind the low bid
Hanwha Systems launched its own self-developed small SAR satellite in 2023 and has supplied SAR sensors and data-link systems for South Korea's military reconnaissance satellite program. The company has built satellite development, manufacturing and testing facilities at its Jeju Space Center and says it has the capacity to produce up to 100 satellites per year.
Micro-satellites are smaller and less costly to build per unit than large satellites, making it easier to mass-produce multiple units from a single design. Industry observers point to Hanwha Systems' existing SAR technology and mass-production facilities as key factors behind its lower bid, though the detailed cost structures and proposals of each bidder have not been disclosed.
SAR fills surveillance gaps day or night, rain or clear skies
SAR satellites emit radar waves toward the ground or sea and analyze the reflected signals to generate images. Unlike optical satellites, which depend on sunlight, SAR satellites can observe around the clock and are far less affected by clouds or severe weather, making them useful for military surveillance as well as disaster and maritime monitoring.
A satellite constellation refers to operating multiple satellites as a single coordinated system. As one satellite passes overhead, another in the constellation can follow shortly after to recapture the same area, shortening revisit intervals and reducing the impact if any single satellite malfunctions or has observation gaps. The South Korean government is pursuing a plan to operate 40 micro-satellites, including SAR satellites, by 2030 to shorten surveillance cycles over the Korean Peninsula and surrounding waters.
The overall micro-satellite system program, of which this contract is a part, is reportedly worth around ₩1.4 trillion. However, this bid covers only part of the broader system, and Hanwha Systems' selection as preferred bidder does not guarantee a final contract will be signed. The production and launch schedules for individual satellites have not yet been disclosed, leaving the final contract value and follow-on manufacturing timeline as key points to watch.