Foreign demand for South Korean weapons is anticipated to increase as global defense spending continues to rise due to the ongoing conflicts in Ukraine and the Middle East, industry analysts told The Korea Economic Daily. A separate CNBC report in December highlighted that the lower cost of Korean arms is also contributing to this high demand.
According to the Korean daily, the country’s seven major defense companies had a record order backlog of $73.1 billion at the end of 2024 due to the instability in international relations caused by these conflicts. This reflects an 11.7 percent increase from the combined order backlog of $66 billion in 2023.
The report indicated that there is particularly strong foreign demand for self-propelled howitzers and tanks. Local defense firms have benefited from European companies’ inability to supply these weapons in a timely manner over the past decade, according to industry officials.
Localization as an Export Driver
The analysts believe that South Korean defense companies could enhance their presence in the export market by localizing core weapon technologies, such as software and engines, which often require authorization from their countries of origin.
To address this regulatory challenge, Hanwha Aerospace, which has the highest order backlog of $22.5 billion among the seven companies, developed its own engine technology for the K9 self-propelled howitzer. This was necessary because the German engine manufacturer had reduced its production due to budget cuts.
With the conflict in Ukraine highlighting the limited capacity of the Western defense industry, South Korea signed a memorandum of understanding in February 2024 with Saudi Arabia to strengthen their defense cooperation, focusing on weapons development and production.