European Startup Surge: K Defense Raises 100 Trillion Won
South Korean Defense firms See Order Backlog Soar Amid Global Demand
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SEOUL, South Korea (May 5, 2025) – South Korea’s defense industry is experiencing a surge in orders, fueled by rising defense budgets in Europe, the Middle East, and elsewhere. The nation’s leading defense companies are reporting near-record order backlogs, signaling significant growth in the sector.
‘Big Four’ Defense Firms approach $79 Billion in Orders
Collectively, the “Big Four” South Korean defense contractors – Hanwha Aerospace, Korea aerospace Industries (KAI), LIG Nex1, and Hyundai Rotem – hold approximately 94.9 trillion won (about $78.7 billion USD) in orders, according to industry figures released Monday. This substantial backlog points to continued expansion for these companies.
Hanwha Aerospace Leads the Way
Hanwha Aerospace, a major player in the South Korean defense sector, recently announced a ground defense order backlog of 31.4 trillion won. A notable shift has occurred in the composition of Hanwha Aerospace’s orders. Export orders now constitute 65% of the total, surpassing domestic demand, which accounts for the remaining 35%. This represents a significant increase in international sales.
The company’s success is partly attributed to the global popularity of its K9 self-propelled howitzer. In the past year, Hanwha aerospace secured several major contracts, including a 2.3 trillion won deal with poland for Cheonmu EC2 multiple launch rocket systems, a 1.4 trillion won agreement with romania for K9 howitzers, and a 900 billion won contract with Saudi Arabia for surface-to-air missile (SAM) launchers.
Further bolstering its order book, Hanwha Aerospace anticipates a second export contract with India for K9 howitzers and a contract with poland for KAAB self-propelled vehicle components, both expected to materialize in the second quarter of this year.
KAI Sees Steady growth in Order Backlog
KAI,the manufacturer of the KF-21 fighter jet and the FA-50 light combat aircraft,reported an order backlog of 24.7 trillion won at the end of last year, according to its recently released 2025 corporate value enhancement plan. The company’s order backlog has shown consistent annual growth, increasing from 18.4 trillion won in 2020 to 24.7 trillion won in 2024, representing a 7.7% annual increase.
LIG Nex1’s Exports Surge
LIG Nex1, a specialist in guided weapons, reported a substantial order backlog of 20 trillion won based on its sales report from the end of last year.exports account for more than 50% of this total.
While LIG Nex1’s orders remained between 6 trillion and 8 trillion won from 2019 to 2021, the company experienced a breakthrough in 2022 with a 2.7 trillion won export deal to the United Arab Emirates for its Cheongung II mid-range surface-to-air missile system. In 2023, the company secured 19 trillion won in export orders, including a 4.3 trillion won contract with Saudi Arabia for the Cheongung II system.
LIG Nex1’s current order backlog is reportedly six times the size of its sales from last year, providing the company with a secure revenue stream for the next six years.
Hyundai Rotem Expands Defense Division
Hyundai Rotem, the manufacturer of the K2 Black Panther tank, held an order backlog of 18.8 trillion won at the end of last year.While the company’s defense division currently accounts for 20% (3.9 trillion won) of its overall order backlog, with the railway division holding a larger share (74%, 14 trillion won), the defense division’s order backlog is projected to increase significantly.
Hyundai Rotem signed a framework agreement with poland in 2022 to supply 1,000 K2 tanks. The initial contract for 180 tanks has been completed, and the company is currently pursuing a second, large-scale contract for 820 additional tanks.
South Korean Defence Industry: A deep Dive into Soaring Orders
Q: What’s driving the recent boom in the South Korean defense industry?
A: The South Korean defense industry is experiencing a remarkable surge in orders, primarily fueled by two key factors:
Rising Global Defense Budgets: Increased defense spending worldwide, particularly in Europe and the Middle east, has created a significant demand for advanced military equipment. Countries are looking to modernize their armed forces and enhance their defense capabilities, leading to a surge in orders for South Korean-made weaponry.
High-Quality Products and Competitive Pricing: South Korean defense companies have earned a reputation for producing high-quality, technologically advanced military equipment at competitive prices, making them attractive partners for nations seeking to bolster their defense capabilities without breaking the bank.
Q: Which are the ‘Big Four’ South Korean defense companies mentioned in the article, and how much in orders do they have combined?
A: The “big Four” South Korean defense contractors, whose performance is the article’s focal point, are:
Hanwha Aerospace
Korea Aerospace Industries (KAI)
LIG Nex1
Hyundai Rotem
These four companies collectively hold approximately 94.9 trillion won (about $78.7 billion USD) in orders. This substantial backlog underscores the tremendous growth trajectory of the South Korean defense sector.
Q: How is Hanwha Aerospace performing, and what’s notable about their order composition?
A: Hanwha Aerospace is leading the charge wiht an remarkable ground defense order backlog of 31.4 trillion won. A noteworthy shift in their order composition is also occurring. Export orders now account for a substantial 65% of their total orders, surpassing domestic demand. This signifies a considerable increase in the company’s international sales and the global appeal of their products.
Q: What major contracts has Hanwha Aerospace secured recently?
A: Hanwha Aerospace has been very successful in securing large contracts. Some of their recent major deals include:
A 2.3 trillion won deal with Poland for Cheonmu EC2 multiple launch rocket systems
A 1.4 trillion won agreement with Romania for K9 howitzers
A 900 billion won contract with Saudi Arabia for surface-to-air missile (SAM) launchers
These contracts highlight the global recognition and demand for Hanwha Aerospace’s advanced weaponry.
Q: What future contracts is Hanwha aerospace anticipating?
A: Hanwha Aerospace anticipates further bolstering its order book with:
A second export contract with India for K9 howitzers
A contract with Poland for KAAB self-propelled vehicle components
These are both expected to materialize in the second quarter of the year.
Q: What is the K9 Howitzer and why is it in demand?
A: The K9 Thunder is a self-propelled 155 mm howitzer developed by South Korea’s Agency for defense Growth (ADD) and manufactured by hanwha Aerospace. It’s designed for rapid deployment and high firepower. Its demand stems from:
Proven Performance: The K9 has demonstrated reliability and effectiveness in various operational scenarios.
Advanced Technology: It incorporates state-of-the-art features, including automated fire control systems and high rates of fire.
Adaptability: The system’s modular design allows for integration with various command and control systems, and its platform is adaptable with a wide range of ammunition type.
Q: How is Korea Aerospace Industries (KAI) performing?
A: KAI, the manufacturer of the KF-21 fighter jet and the FA-50 light combat aircraft, reports a strong order backlog. At the end of last year,KAI had an order backlog of 24.7 trillion won, representing a steady 7.7% annual increase. this consistent growth demonstrates KAI’s continued success in the global aerospace and defense market.
Q: What is the significance of the KF-21 fighter jet and FA-50 light combat aircraft for KAI?
A: The KF-21 fighter jet and FA-50 light combat aircraft are crucial to KAI’s buisness. The KF-21 is a multirole fighter aircraft, and the FA-50 is a light combat aircraft. The KF-21 is a fifth-generation fighter, while the FA-50 serves as a highly capable and cost-effective option for light attack, fighter lead-in training, and air-to-air and air-to-ground combat. These products cater to nations in need of advanced air defense capabilities, significantly contributing to KAI’s backlog.
Q: What’s the story behind LIG Nex1’s export surge?
A: LIG Nex1, a specialist in guided weapons, has experienced a substantial surge in exports. The company reported a substantial order backlog of 20 trillion won, with exports accounting for over 50% of this total. This transformation illustrates its growing significance in global defense markets.
Q: What major export deals has LIG Nex1 secured recently?
A: LIG Nex1 has secured impressive export orders, including:
A 2.7 trillion won export deal with the United Arab Emirates for the Cheongung II mid-range surface-to-air missile system in 2022.
A 19 trillion won in export orders in 2023, including a 4.3 trillion won contract with Saudi Arabia for the Cheongung II system.
Q: How does LIG Nex1 determine its future?
A: LIG Nex1’s current order backlog is reportedly six times its sales from last year. LIG Nex1’s strategic partnerships and its robust order backlog position the company for long-term growth.
Q: How is Hyundai Rotem expanding its defense division?
A: While Hyundai Rotem is widely known for its railway division, its defense division is also gaining traction. At the end of last year, the company had an order backlog of 18.8 trillion won. While its railway division holds a larger share, the defense division’s order backlog is projected to increase significantly.
Q: What is Hyundai Rotem’s role in the K2 Black Panther tank program?
A: Hyundai Rotem manufactures the K2 Black Panther tank,one of the most advanced main battle tanks in the world. The company signed a framework agreement with Poland in 2022 to supply 1,000 K2 tanks, marking a significant international deal. The initial contract for 180 tanks has been completed, and Hyundai Rotem is now pursuing a second, large-scale contract for 820 additional tanks.