The Donald Trump administration is showing signs of halting its role as the 'world police,' leading to escalating security threats everywhere and a global arms race. Meanwhile, advanced defense industry technology armed with artificial intelligence has changed the landscape of the battlefield. Here’s a look at the rapidly changing global defense landscape. [Editor’s note]
The Korean defense industry, which had remained focused on the domestic market, is expanding overseas in the wake of the Ukraine war. Amidst competitive military buildups from countries around the world, Korea's defense industry is boosting its credibility and competitiveness as it races toward becoming one of the top four arms exporters.
If cooperation with the U.S. in naval vessels becomes fully realized, an expansion of presence in maritime defense is anticipated. However, signs have emerged in Europe and elsewhere of efforts to curb the rise of Korea's defense industry, prompting calls for diversification of export regions.
According to the '2024 International Arms Transfer Trends' report published by the Stockholm International Peace Research Institute (SIPRI) in March, Korea ranked 10th in the world with a 2.2% share of global arms exports between 2020 and 2024. Arms exports increased by 4.9% compared to the 2015-2019 period, and the share rose by 0.1 percentage points.
The global arms export market is characterized by a triad of the U.S., France, and Russia, with China, Europe, Israel, and Korea competing within the top ten. Korean arms exports reached a historical high of $14 billion in 2023, but due to delays in export negotiations, exports are expected to drop to $9.5 billion in 2024.
In the defense industry, forecasts suggest that this year's exports will surpass the levels of 2023. The K9 self-propelled howitzer and multiple launch rocket system Cheonmu from Hanwha Aerospace, the FA50 light attack aircraft from Korea Aerospace Industries (KAI), the ballistic missile defense system Cheongung-II from LIG Nex1, the K2 tank from Hyundai Rotem, the radar systems from Hanwha Systems, and surface vessels from HD Hyundai Heavy Industries and Hanwha Ocean are leading exports. The order backlog of the seven major defense corporations has increased by 24% compared to the end of last year, surpassing 100 trillion won.
While Korea's arms exports have traditionally focused on land and air domains, they are now expanding into the maritime sector as well. At the request of U.S. President Donald Trump, domestic shipbuilding firms such as Hanwha Ocean and HD Hyundai Heavy Industries are expected to enter the naval vessel construction market, starting with maintenance, repair, and overhaul (MRO) of U.S. Navy vessels. They have also entered bidding for submarine projects in Canada and Saudi Arabia.
A key task to continue the momentum of export growth is to diversify export markets for each weapon. Although the number of countries receiving Korean weapon systems increased to 10 last year, specific items tend to be concentrated in certain countries or regions. For example, based on the achievements of Cheongung-II exports, LIG Nex1 has increased its proportion of overseas sales to the 20% range, but its export destinations are heavily concentrated in the Middle East.
A related official in the defense industry noted, 'It is necessary to lower reliance on specific regions for exports and to subdivide export destinations in consideration of the risks associated with changes in the policies of importing countries.'