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Graphics = Kim Eui-gyun
On the 22nd of last month, a red-hot flame broke out at the Dnipro Hydroelectric Power Plant, the largest in Ukraine. With the war between Russia and Ukraine now over two years old, Russia launched a large-scale airstrike targeting Ukraine’s energy infrastructure. In this airstrike, the main weapon along with the missile was the Iranian-made Shahed drone. This drone, which has a hang glider-like triangular body and a wingspan of 2.5 m, carries 36 kg of ammunition in its warhead and flies at low altitude to hit the target.
In this ‘drone war’, Western countries’ support for Ukrainian drones is also significant. Last year, the U.S. Department of Defense provided a secret drone weapon called ‘Phoenix Ghost’ in response to Ukraine’s demands. This drone is said to have similar functions to a self-destruct drone switchblade that is small enough to fit in a backpack. This is not all. The ‘Black Hornet’ drone, donated to Ukraine by the Dutch Ministry of Defense, weighs about 33g and is only 16.8cm long, making it easy to fit into a pocket. It is said to be a drone used for surveillance and reconnaissance during urban warfare.
Graphics = Kim Eui-gyun
The war between Russia and Ukraine is taking on the aspect of a ‘drone war’ so intense that it is reminiscent of a drone exhibition hall. Drones are said to play the role of a ‘game changer’ that upsets the balance of military power on the battlefield. Moreover, it is expected that this war will be an inflection point for innovation in the drone industry. “This war will likely go down as one of the major catalysts for the growth of the drone market,” Lenore Elle Hawkins, founding partner of Calit Advisors, wrote in a Nasdaq op-ed. WEEKLY BIZ diagnosed the drone situation that war is changing.
Graphics = Kim Hyun-guk
◇The ‘drone laboratory’ sparked by war
War often serves as a catalyst for innovation. Some say that the Ukraine war is also sparking drone innovation. Drones’ capabilities such as speed, range, and bomb payload are having an immediate impact on the battlefield. The Washington Post said, “Ukraine, known for its agriculture and heavy industry, has not been considered a good environment for drone innovation until now, but the emergency situation of war is turning the country into the ‘best laboratory’ for drone invention.”
The reason drones received particular attention in this war is because of their ‘cost-effectiveness’. A representative example is the ‘FPV (First Person View) drone’. This drone, which costs only about 500,000 won ($400), receives real-time video from the pilot wearing goggles or a helmet and accurately lands on heavy weapons, such as Russian tanks worth billions of won. The British weekly Economist reported, “FPV drones are gaining almost a ‘mythical’ status on the front lines of the Ukrainian war.”
Due to this cost-effectiveness, Ukrainian President Volodymyr Zelensky said in a nightly video speech in February, two years before the outbreak of the war, “We have just signed a decree creating a separate unit in our military called the drone system unit.” The number of drone production companies in Ukraine, which numbered only about 10 before the war, has increased 20-fold to about 200 as of last November. Russia, which imported large quantities of Iranian suicide drones ‘Shahed-136’ before the war, is also building a drone production facility in the country with Iran’s help.
The war in Ukraine is shaking not only the parties involved, but also countries and startups across Europe. “When we first developed an ‘electro-optical’ device to detect drones, everyone laughed at us,” Estonian startup Marduk Technologies, named after the Babylonian god who slayed dragons, told Euronews. “He was deployed to Ukraine.” As drones become the center of the defense industry, related market growth is also explosive. According to Fortune Business Insight, the global military drone market size is expected to grow from $14.4 billion last year to $35.6 billion in 2030.
Graphics = Kim Hyun-guk
◇Drone market reaches 45 trillion won in 10 years
In fact, even before the war, the market for drones was in full bloom with various uses. Each country began to overhaul its drone-related laws around 2015, and the size of the drone market, which has only been around for about 10 years, reached $33.7 billion (about 45 trillion won) last year. Drone Industry Insight (DII), a German research and consulting company specializing in drones, predicted that the drone market will grow at an average annual growth rate of 7.1% until reaching $54.5 billion in 2030.
The rapid growth of the drone market is driven by its diverse uses. The Guatemalan government recently mobilized Chinese-made drones from DJI in the ‘El Mirador’ Mayan civilization exploration project. Because they were buried in a vast jungle spanning 1.6 million acres (approximately 6,474 ㎢), the ruins here remained an unknown space even after full-scale excavations began in the 1960s. However, the drone penetrated through the leaves and tangled branches of the jungle to observe a pyramid that existed in 800 BC and found traces of the Mayan terraced farming method. Drones are already being used to observe changes in ice and polar wildlife in polar regions such as Antarctica and the North Pole, and the U.S. National Aeronautics and Space Administration (NASA) conducted a Mars observation mission using the ‘Ingenuity’ drone for exoplanet exploration.
As such, the area where drones are currently most widely used is in various ‘observation and surveying’ fields. Drones go out and investigate the topography, altitude, and geology of areas that are difficult for humans to visit. It is used in various surveying fields such as construction, mining, and agriculture. The market size of this field alone reaches $10 billion.
The next area where drones are widely used is the ‘maintenance and repair’ field. The market size reaches $4.666 billion. In particular, drones are playing a significant role in the large-scale energy industry, such as oil and gas drilling facilities and power plants, where human access is difficult. DII explained, “Drones have unique advantages in inspecting chimneys, oil refineries, transmission lines, transmission towers, pipelines, etc.” and “The maintenance and repair field related to the energy industry is considered to be the field where drones will develop the most.” did.
In addition, cargo, courier and warehousing industries are also rapidly growing fields. After the coronavirus pandemic, large retailers such as Walmart and Amazon quickly introduced drone delivery. In African countries such as Ghana, when access to medical care was poor due to poor roads and a lack of ambulances, medicine delivery services through drones were introduced as an alternative.
Professor Yoon Yong-jin of the Department of Mechanical Engineering at KAIST said, “Drones can show their true value in places that are difficult for people to access, such as forest fire sites,” and added, “If drones can fly longer and carry heavier objects due to advances in battery technology, etc. “The related market could see annual growth rates well exceeding 7%,” he said. He said, “South Korea, which is actually only developing software technology, needs to actively foster the drone industry,” and “As China, which has the world’s best technology, is North Korea’s ally, it is necessary to foster the drone industry even in preparation for war.”
Graphics = Kim Hyun-guk
◇China dreams of an ‘empire of wings’
In fact, it is difficult to talk about the drone industry without mentioning China and DJI. This is because China, led by DJI, the world’s largest drone company, virtually dominates the global drone market. According to Defense News, a U.S. defense media outlet, Chinese drones occupy more than 90% of the U.S. hobby drone market, 70% of industrial drones, and more than 80% of emergency rescue drones.
China’s strength is also noticeable in market research agency surveys. In the latest (2021) DII survey, DJI achieved an overwhelming performance, occupying 76.1% of the US market. It was followed by Intel (4.1%, USA), Uniq (2.6%, China), Parrot (2.5%, France), and 3D Robotics (0.6%, USA). Most Chinese companies are unlisted, and each country does not disclose the exact size of the market for security reasons. However, considering the People’s Daily report that the scale of the private drone industry in China exceeded 120 billion yuan (about 22 trillion won) last year, and that nearly half of global sales came from China, Chinese companies’ drone market share is expected to be overwhelming.
DJI is the ‘Apple of drones’ and a symbol of Chinese tech companies. This company was founded in Shenzhen, Guangdong Province in 2006 by Chairman Wang Tao (44), a graduate of the Hong Kong University of Science and Technology, with the 300 million won in prize money he received from winning the robot competition in 2005. Since launching the first mass-produced drone, ‘Phantom 1’ in 2013, sales have grown to 30.14 billion yuan (about 5.6 trillion won, 2022). There is an interpretation that DJI’s growth was fueled by extensive support from the Chinese government. Shenzhen, known as China’s Silicon Valley, already enacted the ‘Common Aviation Flight Control Ordinance’ in 2003 and began fostering the drone industry. It was in 2009 that the Chinese government established related guidelines. It was a step faster than the United States’ first selection of a commercial drone operator in 2014 and Japan’s revision of drone operation rules in 2015.
China also selected ‘low-altitude economy’ as a strategic emerging industry at the Central Economic Work Conference in December last year and decided to activate not only drones but also urban air traffic (UAM). People’s Daily said, “This year, Shenzhen continued to expand the scope of ‘air taxis’, shortening the commuting time from 60 minutes on the ground to 13 minutes, and the world’s first commercial self-driving air taxi flew over Luogang Park in Hefei, Anhui Province.” “It won’t be long before we can say goodbye to congestion on our commutes due to air commuting,” he said.
In particular, the area that the Chinese government has used as a base to revitalize the low-altitude economy is China’s largest economic zone, the so-called ‘Yegangao Greater Bay Area’. The Chinese government has set out to build an ’empire of wings’ in this key economic region with a gross domestic product (GDP) of $1.9 trillion.
Graphics = Kim Hyun-guk
◇U.S., growing concerns
Of course, China’s ‘drone rise’ is not all smooth sailing. Due to the nature of drones, which can be transformed from a hobby product to military use at any time, the United States has no choice but to keep China in check. Moreover, in the drone market, American and Western companies are losing out significantly to China, and regulatory barriers are increasing. In particular, the United States suffered a blow to its pride when it was revealed that U.S. special forces dispatched to Syria in 2017 were dissatisfied with their own military drones and used DJI products. The Wall Street Journal said, “China is easily dominating the consumer drone industry through its flagship company, DJI.” “There are not many drone companies in the United States, and this is because China (with its overwhelming market share) has put too many drone companies out of business.” reported.
In fact, after the Syria incident, the United States strengthened regulations on Chinese drones, including banning the use of DJI drones for cybersecurity purposes within the U.S. military. The Donald Trump administration banned the use of overseas manufactured drones by all government agencies by executive order, and in 2022, DJI was included in the trade sanctions list. In December 2021, U.S. authorities blacklisted DJI on charges that drones were used to monitor residents and violate human rights in China’s Xinjiang Uyghur Autonomous Region and banned U.S. investors from investing in DJI. In response to these criticisms, DJI’s position is, “We only developed drones for civilian use and were not involved in it.”
However, some say that because DJI’s share of the drone market is so large, America’s checks are not working well. Foreign Policy, a US diplomatic magazine, said, “Banning DJI or other Chinese drones is not like swapping Samsung smartphones for Apple ones,” and added, “There are no American or European products that can replace DJI products in terms of price, availability, ease of use, and quality.” “He pointed out. The media said, “Western drones are almost useless for non-military purposes, such as observing how quickly glaciers are melting in the Cascade Mountains or the destruction left behind by hurricanes on the Gulf Coast.”
Kim Seong-jin, a researcher who studies drones at the Korea Institute for Industrial Economics and Trade (KIET), said, “In the end, the U.S.’s check on China has military and security issues, but it seems to be based on the intention to grow its own drone industry and the lobbying of domestic companies.” He also added, “China is a state. “While the U.S. has been driving the industry by directly supporting it, the U.S. supports private companies by easing regulations, so it will not be easy for the U.S., which is an aviation powerhouse, to keep up with China’s level for the time being,” he said.
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2024-04-05 12:19:10
