Korean supply chain firm signs $1.1b supply deal with SpaceX

Sphere Corporation, a South Korean aerospace-grade alloy specialist, has signed a supply agreement worth up to US$1.05 billion with SpaceX.

Under the deal, Sphere will provide nickel and superalloys to SpaceX over a 10-year period ending in 2035, with an option to extend for three more years.

The 2026 supply volume is set at US$55.48 million.

Total purchases throughout the agreement are projected to reach US$1.05 billion, according to a regulatory filing.

Sphere became a Tier 1 vendor for SpaceX in 2023, supplying alloys used in rocket engines, nozzles, and other launch vehicle components.

The company said supply volume could increase as SpaceX ramps up rocket launches.

This follows US regulatory approval for more annual Starship flights.

🔗 Source: The Korea Times

🧠 Food for thought

1️⃣ SpaceX’s supply chain strategy evolves from vertical integration to selective outsourcing

SpaceX built its early competitive advantage through vertical integration, manufacturing most components in-house rather than following the aerospace industry’s traditional outsourcing model1.

This approach allowed the company to control costs and quality while achieving rapid innovation cycles, helping SpaceX capture nearly 87% of the U.S. orbital launch market by 20242.

The $1 billion deal with Sphere Corp represents a strategic shift toward selective outsourcing for highly specialized materials like superalloys that require extreme precision and certification.

This evolution makes business sense as SpaceX scales up operations. The FAA’s approval to increase Starship launches from 5 to 25 annually creates supply demands that may exceed efficient in-house production capacity1.

By partnering with specialized Tier 1 vendors for critical materials while maintaining control over core rocket assembly and software, SpaceX can focus internal resources on breakthrough innovations like reusability technology.