The Excellence of K-Defense
Seong-hyun Han
Former Diplomat
1. Introduction
President Lee Jae-myung’s state visit to India in April served as an important demonstration of the Republic of Korea’s efforts to strengthen security and economic solidarity with key partner nations. In a written interview with local media, President Lee cited the K-9 Self-Propelled Howitzer project (known as “Vajra” in India) as a model example of defense cooperation between the two countries.
The Vajra project, under which more than 60% of the manufacturing process is carried out locally in India, represents a customized partnership that closely aligns with India’s “Make in India” policy aimed at promoting domestic manufacturing. By utilizing the defense industry as a powerful catalyst, South Korea–India relations have gained momentum toward evolving into a strategic partnership capable of jointly addressing shared security challenges, such as ensuring freedom of navigation in the Strait of Hormuz and securing critical mineral supply chains.
This demonstrates the inherent value of defense exports. As of the end of 2025, the combined order backlog of South Korea’s four major defense companies exceeded 103 trillion won for the first time in history. This amount represents approximately four to five years’ worth of production for the domestic defense industry, and K-defense has effectively filled gaps in the existing defense supply chains centered on the United States and Europe. This development serves as an indicator that South Korea has firmly established itself as a major player in the global security supply chain.
Attention is now shifting to even larger markets. A prime example is the Canadian Patrol Submarine Project (CPSP), valued at approximately 60 trillion won—the largest overseas defense project ever pursued by South Korea. Currently, South Korea is engaged in intense competition with Germany’s TKMS for the contract. If this mega-project, whose details are expected to be finalized in 2027, is successfully secured,K-defense could establish itself as a new and durable pillar of South Korea’s long-term economic growth.
2. Large-Scale Defense Exports and South Korea’s Long-Term National Interests
The structural ripple effects of large-scale defense exports are directly linked to South Korea’s long-term national interests.
First, they involve securing a dominant position in the Maintenance, Repair, and Overhaul (MRO) market, which generates revenue for decades following the initial export. Typically, the MRO costs incurred over the 30- to 50-year operational lifespan of advanced weapon systems amount to two to three times the initial acquisition cost.
This is comparable to the case of the F-35 Lightning II stealth fighter, which is expected to generate substantial additional revenue through upgrades and maintenance over the coming decades, far exceeding the initial proceeds from aircraft sales. Once a platform is exported, it can continuously generate national wealth through parts replacement, maintenance services, and sustained performance enhancements.
Second, there is the spillover effect of technological diffusion throughout the broader industrial ecosystem. Large-scale arms exports signify the establishment of a stable, long-term export pipeline for domestic small and medium-sized enterprises (SMEs) and mid-sized firms that supply tens of thousands of components.
Furthermore, such exports help activate a “spin-off” ecosystem, in which high-performance radar technologies accumulated in the defense sector are transferred to autonomous driving sensors and aviation technologies are applied to Urban Air Mobility (UAM). At the same time, they also promote a “spin-on” ecosystem, whereby cutting-edge civilian AI and advanced manufacturing technologies are integrated into weapons systems, thereby enhancing the overall competitiveness of the nation’s manufacturing base.
Third, it involves securing interoperability in military operations and institutionalizing security partnerships. The adoption of a particular country’s weapons systems often leads the purchasing state to adopt that country’s military support framework as well. This creates one of the strongest and most practical foundations for long-term security cooperation, enabling a durable partnership with the supplier nation that can endure for decades. K-defense may therefore be regarded as an irreplaceable strategic national asset that positions South Korea at the center of the global security supply chain.
3. Structural Transformation Reflected in the Numbers
Of course, segments of South Korea’s financial investment community initially viewed the success of defense exports as a temporary boom driven by the external shock of the war in Ukraine. In fact, when export figures for 2023 declined to $13.5 billion from the previous year’s $17.3 billion, some securities firms raised concerns about a so-called “defense industry peak-out,” arguing that export momentum would weaken once the Ukraine-driven surge subsided.
A similar perception existed within the global defense industry. Major U.S. defense contractors such as Lockheed Martin and RTX (Raytheon), despite declines in their stock prices, maintained that their weapons systems remained the most sought-after products in the global market. They underestimated the competitiveness of K-defense, asserting that Western defense products would once again dominate the market once the conflict stabilized.
However, the reality demonstrated by accumulated data and historical experience is clear. According to the recently published “Analysis of Global Arms Exports, 2021–2025” by the Stockholm International Peace Research Institute (SIPRI), South Korea accounted for 3.0% of the global defense export market, firmly securing its position as the world’s ninth-largest arms exporter.
South Korea’s defense exports, which amounted to only approximately $250 million annually in 2006, increased more than seventy-fold to reach $17.3 billion in 2022. Even today, through export diversification, the country continues to maintain a substantial export volume of around $15 billion annually.
But has this merely been a rise in export rankings and scale? As recently as the early 2010s—just over a decade ago—South Korea’s defense export structure was centered on low-value-added items such as ammunition, components, and small tactical vehicles.
Today, however, it has undergone a fundamental transformation toward exports focused on advanced core military capabilities, including tanks, self-propelled howitzers, supersonic fighter aircraft, and interceptor missiles. The success of K-defense demonstrates through concrete data that South Korea has achieved a structural transformation and established itself as a global security supplier amid the realignment of the previously Western-dominated and highly concentrated global weapons supply chain.
3. The Three Core Competitive Advantages Behind the K-Defense Renaissance
① Western Production Bottleneck and South Korea’s Superior Mass Production Capacity
Following the end of the Cold War, major European countries sharply reduced their defense budgets and drastically scaled back their domestic defense production lines. The consequences were significant. Even Germany, traditionally regarded as a leading tank-producing nation, experienced acute supply bottlenecks, with the maximum annual production capacity of the Leopard 2 amounting to only a few dozen units.
Even the United States, the world’s leading military power, is currently facing delays of several years in the construction schedules for naval vessels and submarines due to chronic labor shortages at shipyards and disruptions in defense supply chains.
By contrast, South Korea, which has long faced the persistent threat posed by North Korea, has maintained large-scale production lines for core ground systems such as the K9 Thunder self-propelled howitzer and the K2 Black Panther tank. As a result, it has achieved significant economies of scale, reducing component costs and maximizing production efficiency.
This prepared production capability was most clearly demonstrated in delivery times. While European countries required waiting periods of several years after contracts were signed, South Korea delivered the initial batch of K2 Black Panther and K9 Thunder systems to Poland just four months after the export agreement was concluded. The widely noted image of Polish President Andrzej Duda personally greeting the shipment at the port and praising the rapid delivery firmly established South Korea’s overwhelming “fast delivery” capability in the global defense market.
② Combat-Proven Performance and Technology Transfer
During Iran’s large-scale missile and drone attack last April, a battery of South Korea’s Cheongung II interceptor missiles deployed in the United Arab Emirates was reportedly able to intercept incoming targets with a 96% success rate. This demonstrated top-tier interception performance in actual combat conditions at an acquisition cost of approximately one-third that of the U.S.-made MIM-104 Patriot PAC-3 missile system—around 1.5 billion won per interceptor compared to roughly 5 billion won for the PAC-3.
Furthermore, South Korea’s weapons systems are developed with ROK–U.S. combined operations in mind and are fully compatible with the stringent NATO Standardization Agreement (STANAG) specifications. This enables Western countries to continue utilizing their existing ammunition, communications, and command-and-control systems, thereby reducing substantial transition costs and time.
Above all, the “open partnership strategy”—under which South Korea actively transfers manufacturing technology to purchasing countries and supports the development of their independent industrial ecosystems, as demonstrated in the cases of Poland and Australia—may be regarded as the key factor that has opened the door to advanced markets.
③ The Emergence of South Korea as an “Arsenal of the Free World” Beyond Ideological Barriers
The reach of South Korea’s defense industry is expanding beyond Eastern Europe and the Middle East to encompass the broader ASEAN region. Last April, the Haegung ship-to-air missile developed by LIG Nex1 secured a 140 billion won export contract for deployment on Malaysian Navy patrol vessels being built by the Turkish defense firm STM. This marks the first time that a domestically produced guided weapon system has been adopted as an air-defense solution for a foreign naval vessel.
Negotiations are also reportedly in the final stages for the first-ever export of approximately 20 K9 Thunder self-propelled howitzers—valued at around 300–400 billion won—to Vietnam, a country with a different political system.
Why is the world turning to South Korea? Since the end of the Cold War, most Western countries have reduced defense spending and focused primarily on asymmetric high-technology capabilities, creating a significant gap in conventional heavy-armament forces—the backbone of modern warfare. By contrast, South Korea has steadily refined its capabilities in this area in response to persistent security threats.
At a time when countries around the world are accelerating rearmament efforts, South Korea has emerged as an indispensable supplier supporting the security of the free world and its allies, thereby acquiring substantial diplomatic leverage.
4. Challenges Facing the K-Defense Industry
Of course, the Korean defense industry faces a wide range of challenges. The global defense market is an intensely competitive arena in which the winner often takes all. Take the AS21 Redback armored vehicle program exported to Australia as an example: the initial plan for 450 units by the Australian government was significantly reduced to 129 during a defense budget restructuring, leaving the local subsidiary struggling to identify new avenues for growth.
This case offers a stark lesson: securing an order cannot be the end of the effort, and stakeholders must remain prepared to manage the constantly evolving political and fiscal risks of partner countries.
First, South Korea must overcome formidable protectionist barriers in major global markets. A symbolic example is the recent withdrawal of the Lockheed Martin–KAI consortium from the U.S. Navy’s Next-Generation Advanced Trainer program, valued at approximately $10 billion.
This outcome was largely attributed to the consortium’s difficulty in overcoming protectionist policy constraints in the United States—such as the requirement for a high proportion of U.S.-made components under the “Buy American Act (BAA)”—which undermined the price competitiveness that is one of the core strengths of Korean-made platforms.
This challenge is not unique to the United States. The European Union has likewise embarked on a process of reorganizing its supply chains around domestic interests, including significantly increasing the proportion of defense procurement within the region through the European Defence Industrial Strategy (EDIS).
To remain competitive amid the growing formation of large-scale blocs in the global defense market, it is essential first to reduce institutional barriers among allies—for example, through Reciprocal Defense Procurement (RDP) agreements—and to further refine localization strategies.
Second, South Korea must remain vigilant regarding the steady rise of Japan, often described as a “sleeping giant.” Having revised its Three Principles on Defense Equipment Exports for the first time in 60 years to ease long-standing restrictions, Japan has emerged as a formidable competitor to the Korean defense industry.
Japan’s Mogami-class frigate, which recently outcompeted South Korea to secure Australia’s next-generation frigate program valued at approximately 10 trillion won, features a significantly reduced crew size of roughly 90 personnel—about half that of conventional vessels—achieved through advanced automation. This capability effectively addressed a key vulnerability of the Royal Australian Navy, which faces challenges related to demographic decline and recruitment shortages.
Even more concerning is Japan’s substantial financial capacity. In addition to its existing Official Development Assistance (ODA), Japan has introduced the Official Security Assistance (OSA) framework, through which it provides defense equipment to Southeast Asia and other regions on a grant or low-cost basis.
The new foreign policy direction recently announced by Japanese Prime Minister Takaichi during her visit to Vietnam may likewise be understood as part of a broader strategy to leverage OSA in order to expand Japan’s influence within the security architecture of the Global South.
Third, there is a paradigm shift from hardware-centric approaches to artificial intelligence (AI). The mainstay of the K-defense industry, which has secured orders worth 100 trillion won, consists of conventional hardware platforms such as the K2 Black Panther and K9 Thunder, many of which were developed 10 to 20 years ago.
However, the nature of future battlefields is being fundamentally reshaped around Manned–Unmanned Teaming (MUM-T) systems that integrate artificial intelligence, drones, and robotics. In line with the AX (AI Transformation) policy recently established as a core national agenda, the Ministry of Planning and Budget has also announced that it will prioritize investment in securing advanced capabilities—including manned–unmanned systems involving drones and robots—in next year’s budget. Unless South Korea can rapidly integrate AI software capabilities and digital-based MRO solutions into existing hardware platforms, the structural advantages of K-defense on future battlefields may not be sustainable.
5. Conclusion
The true test for K-defense begins now. Industrial capabilities alone—such as cost-effectiveness and rapid delivery—are insufficient to navigate the turbulent waters of major global markets, where political, diplomatic, and financial considerations often prevail. Nor is this the time to become mired in administrative rhetoric, such as the “establishment of a new control tower,” the substance of which remains unclear. The central question is whether sustainability can be secured through the dismantling of outdated regulations and the effective integration of national capabilities.
South Korea must boldly dismantle the Defense Acquisition Program Administration’s outdated procurement regulations—originally designed for domestic procurement two decades ago—as well as unnecessary barriers to entry. Now that the defense industry has firmly established itself as a national strategic industry in both name and substance, the Export-Import Bank’s unprecedented financial support, the Ministry of Trade, Industry and Energy’s establishment of a technology cooperation framework, and the Ministry of Foreign Affairs’ security package negotiations must operate seamlessly as a single integrated system.
At every diplomatic opportunity, including summit diplomacy, defense companies, the government, and the military must function as a coordinated team in order to proactively and consistently present attractive, government-led package deals to partner countries.
The 103 trillion won in order backlog, secured through proven capability, is not merely a symbol of national pride. It is an irreplaceable asset essential to South Korea’s economic and strategic resilience, and one that must be further strengthened through rigorous industrial strategy and sober geopolitical calculation. The real contest facing the advancing K-defense industry will not be decided on a weapons testing ground, but at a carefully designed and strategically coordinated policy table.