WEEKENDER K-defense exports enter new phase

By Lee Min-hyung

• Published Sep 19, 2026 7:00 AM KST

Defense firms ride export wave, but supply chain stabilization poses new challenges

Korea’s defense industry stands at a critical crossroads, as its export boom gives way to a new phase in which major overseas buyers are demanding local production and supply chains in their own markets.

From K9 self-propelled howitzers and K2 battle tanks to Chunmoo multiple rocket launchers and air defense systems, Korean-made weapons have rapidly expanded their presence across Europe and other regions.

The export boom has transformed the defense industry from a largely domestic-oriented sector into one of Korea’s emerging global growth engines.

But the next stage may prove more challenging.

Korean defense firms can no longer rely solely on their traditional strengths of competitive prices, fast delivery and proven manufacturing capabilities.

As major customers increasingly demand technology transfers, local production and participation in their own defense industries, Korean companies are pushed to become not just arms exporters, but long-term industrial partners.

That shift could determine whether the current K-defense boom develops into a sustainable global business or remains a temporary export surge driven by geopolitical instability.

According to data from the Export-Import Bank of Korea, the nation’s defense exports reached $9.5 billion in 2024 and soared to $15.4 billion the next year. The figure will continue to grow rapidly and is forecast to top $27 billion this year.

The growth has been particularly striking in Europe.

European countries sharply increased military spending and arms imports amid Russia’s invasion of Ukraine, creating an opening for Korean manufacturers. Korean companies were able to capitalize on the demand because they could offer relatively quick deliveries at competitive prices, while also providing technology transfer and industrial cooperation.

Poland became the clearest example of a key strategic defense partner with Korean firms.

Warsaw’s large-scale purement of K2 tanks, K9 howitzers, FA-50 light combat aircraft and Chunmoo rocket launchers helped establish Korea as a major defense supplier in Europe. However, the relationship is now evolving beyond simply shipping weapons from Korea.

Poland wants to strengthen its own defense manufacturing capabilities, meaning future contracts increasingly involve local production and industrial cooperation. Hyundai Rotem, for example, has been working with Poland’s state-run PGZ on a localized version of the K2 tank, while Hanwha Aerospace has established partnerships with the country to produce its arms products locally.

The same trend is spreading to other markets.

Hanwha Aerospace has begun building a local production facility for K9 howitzers in Romania since February to strengthen regional maintenance capabilities and stabilize its European supply chain.

This is becoming increasingly important, as European governments seek to reduce their dependence on foreign suppliers and expand domestic defense production.

“European countries are increasingly looking not simply for weapons, but for industrial capabilities, when clinching arms import contracts,” an industry official said.

For Korean companies, localization therefore presents both an opportunity and a challenge.

Producing weapons closer to the customer can reduce logistical costs, improve access to follow-up contracts and create deeper relationships with local governments and defense companies. It can also make Korean weapons more attractive in procurement programs that prioritize domestic economic benefits.

But localization requires Korean firms to invest more capital overseas and share technologies that were previously kept within their domestic production networks.

There is also a longer-term strategic risk.

Technology transfers that help Korean companies win contracts for now could eventually strengthen the manufacturing capabilities of customer countries.

Turkey is a prime example of how technology transfers can reshape the global arms market. The country has been able to develop its Altay battle tank based on the technology of Korea’s K2 Black Panther tank.

That makes the balance between export expansion and technology protection increasingly important.

At the same time, Korea faces another challenge on whether its defense supply chain can keep pace with rapidly rising overseas orders.

The recent surge in exports has placed greater pressure on production capacity and specialized suppliers.

For an industry whose greatest competitive advantage has been its ability to deliver large quantities of weapons quickly, any disruption in the supply chain could directly undermine that advantage.

The success of K-defense was built partly on Korea’s broader manufacturing strengths. Decades of government-backed defense development, combined with the country’s sophisticated civilian industrial base, allowed Korean companies to develop efficient production systems and localized supply chains.

That model is now being tested on a much larger global scale.

The question is no longer whether Korea can manufacture competitive weapons. The bigger question is whether Korean defense companies can build a global industrial network capable of supporting those weapons for decades.

It also means moving beyond the traditional concept of an arms sale.

A tank or howitzer sold overseas is no longer necessarily the end product of a transaction. It can become the starting point for a much broader relationship involving local manufacturing, maintenance, training, logistics, software and future upgrades.

This could provide Korean defense companies with a more stable source of long-term revenue while strengthening their position against established players in the United States and Europe.

“The first chapter of K-defense was about proving that Korean weapons could compete globally, but the next chapter will be about proving that the industry can stay there sustainably with stable supply chains,” another industry official said.