For a decade now South Korea has been trying to assemble the cash, technology and export orders so they can start building an F-16 type jet fighter; the KFX. This was part of an effort to create South Korean military aircraft development and building capability. The problem has always been cost and a lack of partners. The latest such problem is the recent refusal of the United States to transfer several key military technologies so South Korea can build its KFX. This is because of American security concerns, as East Asian nations (like Japan several times in the past) have proved vulnerable to China spies obtaining key military technologies. Not just the specifications but the more difficult to obtain details of actually manufacturing such tech. Most of the technologies the U.S. will not give South Korea access to are only available from a few sources, or only the United States.
Another reason for continued KFX delays is that several studies by South Korean analysts have shown that the KFX would cost up to twice as much as a top-of-the line model of the F-16 bought from the United States. Critics point out that Japan made the same mistake in the 1990s when they decided to develop and build a similar (to the KFX) aircraft; the F-2. It cost twice as much as an imported F-16 (or even one built in Japan under license) and was justified (unofficially) as a way to provide lots of good jobs. The F-2 did little to aid exports because Japan cannot, by law, export weapons.
South Korea can and does export weapons and has sought partners to build the KFX. The latest one was Indonesia who agreed in 2010 to jointly develop the KFX. That deal fell apart on costs as did several similar deals with other countries. The cost problem is less of an issue because of the popularity of developing the ability to design and build combat aircraft.
The KFX is basically an aircraft with capabilities somewhat beyond the top-line American F-16 Block 60. The best existing example of this is a special version of the Block 60 developed for the UAE (United Arab Emirates). The UAE bought 80 "Desert Falcons" (the F-16E) which is optimized for air combat. It is a 22 ton aircraft based on the Block 52 model (which the current KF-16 is based on), but with an AESA (phased array) radar and lots of other additional goodies (what the upgraded KFX will largely be). KFX development is expected to take ten years and cost $2 billion. Given the problems with American tech export restrictions it will take longer and cost more to get KFX into production.
South Korea hopes to build on the work it did to develop its T-50 jet trainer. This is a 13 ton, two seat, single engine aircraft that is also available as a combat model (the F-50), which carries a 20mm autocannon and up to three tons of bombs and missiles. The KFX is currently seen as a single seat 21 ton fighter with one engine and the ability to carry more than six tons of weapons. The KFX is expected to look more like the Eurofighter Typhoon, than the T-50 or F-16. The KFX is based on only costing $50 million each, having advanced electronics (including an AESA radar). South Korea wants 120 of these and would buy up to 250 if that helped obtain export sales. South Korea needs something to replace its current fleet of elderly American F-4s and F-5s.
KFX is an ambitious undertaking and success is not certain especially when the timeline, budget and aircraft performance are concerned. The KFX is still officially in the works but is delayed for the moment over political opposition to the escalating costs.