'Soyuz Rocket,' the 'King of Cost-Effectiveness,' Shaken by Russian Sanctions... The Market Battle Begins [Tech Talk by Lim Ju-hyung]

Roscosmos Soyuz Rocket Shunned in Western Markets
Active in Space Launch Services with 'Overwhelming Cost-Effectiveness'
SpaceX and Startups Show Signs of 'Market Share Battle'
Korea to Launch 'Nuriho 2' in June

Russian Soyuz rocket launched from Baikonur Cosmodrome in Kazakhstan last October / Photo by Yonhap News

[Asia Economy Reporter Lim Juhyung] Since the Russian military invaded Ukraine on the 24th of last month (local time), Western countries have launched full-scale economic sanctions. As a result, the Russian economy is expected to suffer enormous damage, and the space launch vehicle market is also likely to be affected.

Russia, which has established itself as an aerospace power since the 20th century, has been active in the space launch vehicle market by offering rockets that are affordable and reliable in performance. However, due to sanctions, Russian-made rockets now face the risk of being pushed out of the market. This opens up a huge market worth trillions of Korean won to other competitors.

◆Traditional Space Power Russia's Position Shaken in the International Launch Vehicle Market

Since the era of the former Soviet Union, Russia has been a space power. It developed the artificial satellite "Sputnik," which orbited the Earth before the United States, delivering the famous "Sputnik Shock" to the U.S.

The rockets developed by Russia have also been highly regarded in the global space launch vehicle market. The most representative commercial launch vehicle is the "Soyuz rocket," developed by the Russian Federal Space Agency (Roscosmos). Introduced in the 1960s, it has been launched over 2,000 times to date, continuously accumulating launch data and improving performance, making it an affordable and reliable product.

Roscosmos's space launch services are also relied upon by European countries. The British internet satellite manufacturer and service company "OneWeb" has recently been launching its satellites aboard Soyuz rockets.

Soyuz rocket carrying the payload of the British internet satellite service company 'OneWeb' / Photo by Yonhap News

However, Roscosmos announced on the 1st that it would not provide launch services until OneWeb excludes the British government's stake. OneWeb is a company in which the British government holds about a 30% stake.

In response, Western countries including the UK have begun to shun Russian space launch services. Immediately, OneWeb started looking for alternatives to the Soyuz rocket, and the European Space Agency (ESA) also withdrew from the Mars probe plan that was to be pursued with Roscosmos.

◆To Enter the Launch Vehicle Market, Must Surpass Soyuz's 'Price Competitiveness'

As the Soyuz rocket faces cold treatment in the international market, the huge share of the space launch service market that Russia held is expected to open up to other competitors.

The space launch vehicle market is already crowded with new challengers. Representative examples include SpaceX, owned by Tesla CEO Elon Musk, Rocket Lab, a U.S.-New Zealand joint venture, Virgin Orbit, a U.S.-UK joint venture, British companies Skyrora and Orbex, and German Rocket Factory, all of which are nearing the final stages of developing their own rockets.

For these competing companies to effectively replace the Soyuz rocket, they must first achieve price competitiveness comparable to Soyuz.

The reason Soyuz, based on 1960s technology, remains popular is its low price. According to data released by the Russian news agency TASS, the price of the Soyuz 2.1 rocket is $48.5 million (about 59 billion KRW) including boosters, and $35 million (about 4.26 billion KRW) when launched without boosters.

The most commonly used metric to measure rocket launch costs is "cost per kilogram." This converts the cost to how much money is spent per kilogram of satellite weight sent into Earth's orbit. The cost per kilogram for Soyuz 2.1 is about $20,000 to $30,000 (24 to 36 million KRW).

According to the U.S. financial media Bloomberg, the average launch cost of NASA is about $23,000 (about 28 million KRW) per kilogram. The Soyuz rocket without additional boosters is at least 10% cheaper than the average cost of U.S. rockets, demonstrating considerable price competitiveness.

◆Unrivaled SpaceX, Startups Accelerating Commercialization

From this perspective, the commercial rocket with the highest price competitiveness currently is SpaceX's product. SpaceX is notable for dramatically lowering launch prices with its reusable rocket, the "Falcon 9."

The reusable SpaceX 'Falcon 9' rocket significantly reduces launch costs, enhancing price competitiveness. / Photo by SpaceX Twitter capture

According to SpaceX, the current launch cost of Falcon 9 is $67 million (about 81.5 billion KRW), which translates to $5,500 (about 670,000 KRW) per kilogram. Due to the nature of reusable rockets, it can only reach low Earth orbit (LEO), but it has the strong advantage of being able to launch satellites at a much lower price than Soyuz.

Regarding this, CEO Musk expressed confidence that after Soyuz is pushed out of the international market, SpaceX will handle most of the space launch systems. In a tweet on the 22nd, he wrote, "SpaceX's basic plan is to secure 65% of the world's total launch mass within this year," adding, "If demand increases, it could reach up to 70%. Therefore, there will be no major changes in the space launch market even without Soyuz."

Other startups that do not have reusable rocket technology like Falcon 9 aim to secure price competitiveness with "small rockets." Representative examples are British companies Orbex and Skyrora, which have developed technology to instantly produce rocket engines requiring skilled labor using 3D printers. Their goal is to produce as many affordable rockets as possible to achieve economies of scale.

Small rocket engine mass production 3D printer (above) by UK small rocket manufacturer 'Ovex' and air-launched rocket by US-UK joint venture 'Virgin Orbit' / Photo by Ovex, Virgin Orbit capture

Meanwhile, instead of equipping expensive fuel motors and boosters, the concept of loading rockets onto aircraft and launching them mid-air is also being attempted. Virgin Orbit, owned by Richard Branson, CEO of Virgin Group, succeeded in lowering the manufacturing cost of low Earth orbit rockets to $18 million (about 2.2 billion KRW) using this method.

In South Korea, efforts to achieve "space technology independence" through the development of domestic launch vehicles continue.

According to the Ministry of Science and ICT, the Korean launch vehicle "Nuriho 2," capable of sending a 1.5-ton payload into low Earth orbit, is scheduled to conduct its second test launch on June 15. The Korean government plans to test satellite orbit insertion capability in this second launch test and then transport the next-generation medium-sized satellite No. 3 the following year.

This content was produced with the assistance of AI translation services.