From a country mainly dependent on aid and imports of weapons and military equipment, South Korea has, in recent years, made many breakthroughs in defence industry development, becoming a nation which autonomously produces modern weapon systems for domestic use and export. The international community has paid much attention to those breakthroughs and the process as well.
Breakthroughs in defence industry development policy
Recently, the South Korean government's consistent and creative policy in developing defence industry has promoted the country to one of the world's leading arms manufacturers and exporters. Simultaneously, the South Korean government prioritises domestic technology and products over foreign defence technology. Therefore, the country's localisation rate of defence technology is increasing. According to South Korea Defence Industry Association (KDIA), the localisation rate of national weapon systems increased from 70.8% in 2016 to 76% in 2020.
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| The Republic of Korea Air Force 53rd Air Demonstration Group, nicknamed the Black Eagles, performs during the 2023 Seoul International Aerospace and Defence Exhibition media day at Seoul Air Base (photo: qdnd.vn) |
In August 2021, the South Korean Defence Acquisition Program Administration (DAPA) announced the adoption of a new policy, called "South Korean Defence Capability", requiring all defence procurement activities to apply quotas of 80% and 20% between domestic and foreign products respectively. Accordingly, South Korea would prioritise sourcing defence items produced by domestic companies, instead of foreign defence products. To participate in South Korea's defence procurement programs, foreign contractors are required to cooperate in production or development with domestic defence companies. Therefore, foreign defence contractors often establish joint ventures with leading South Korean defence companies such as: South Korea Aerospace Industries, Korean Air, Hanwha, LIG NEX1, Hyundai Rotem, etc.
Due to the complicated security developments in Northeast Asia and around the world, the South Korean government continuously maintains a high level of military expenses, dedicating a significant budget for research and development of its weapons manufacturing industry. At the same time, it strengthens its defence capabilities by gaining industrial autonomy and expanding international military partnerships. Accordingly, Seoul established the "Defence Industry Investment Fund" to support defence companies specialising in artificial intelligence, drones, and other fields, to improve the innovation of the ecology in defence industry and respond to changes in the overall. This is an opportunity for small and medium-sized defence enterprises to access advanced defence technologies in different fields, including energy, aerospace and semiconductors.
Breakthroughs in export market development
Currently, South Korea turns out one of the major arms suppliers with breakthroughs in competitive advantage in the global arms market. This stems from the need to strengthen military capabilities in the face of security fluctuations in Asia and on a global scale. According to South Korean government statistics, the country's arms sales in 2022 reach more than $17 billion, much higher than $7.25 billion in 2021. A sudden increase of about 240% per year has made this country the world's ninth largest arms exporter, which climbed up 23 higher levels compared to 2000.
South Korea's arms exports have marked a milestone by seizing a huge opportunity from Western countries looking for weapons sources to ensure security after continuously supporting Ukraine and addressing increasing tensions. Currently, South Korea is the third largest arms supplier to NATO and its member states. South Korea's Hanwha Group accounts for 55% of the global self-propelled howitzer market share and is estimated to increase to 68% thanks to the contract with Poland. In June 2023, South Korea signed a contract to supply K9 self-propelled howitzers, K2 main battle tanks and FA-50 fighter jets to Poland, worth $13.7 billion. The two sides also agreed to establish a joint venture enterprise so that Korean weapons can be produced in Poland, opening the way to Europe. It is expected that 500/820 tanks and 300/672 self-propelled howitzers in this agreement will be produced at factories in Poland, starting in 2026.
Meanwhile, the Asian market accounts for 63% of South Korea's arms exports during 2018 - 2022 period. To compete directly with strong European defence industrial corporations, South Korea is promoting weapons exports to the Philippines, New Zealand, Thailand, Malaysia, Turkey, and so on. Malaysia alone signed a contract worth nearly $1 billion for 18 FA-50 fighter jets, while Australia spent $2.4 billion on infantry fighting vehicles from South Korea.
According to the Stockholm International Peace Research Institute, South Korea ranks 9th in global arms exports in 2018 – 2022 period, accounting for 2.4% of the world arms export market share. Notably, South Korea's arms exports during this period increased by 74% compared to five previous years. This is the highest growth rate among the world's top 10 arms exporting countries. South Korea is aiming to become the world's fourth largest arms exporter, accounting for 5% of the market share by 2027 just following the US, France and Russia.
Breakthroughs in technology application, high compatibility, production capacity and product quality
South Korea currently holds many leading military technologies applied in weapons production. Therefore, its defence products have attained a strong position thanks to their quality, design and proper prices compared to the West. Thanks to appropriate investment strategy, defence industry has emerged as an important manufacturing force in South Korea, creating high-quality job opportunities and promoting balanced development.
South Korea's military technology is developing rapidly in many fields, especially the manufacturing of fighters, submarines and advanced surveillance satellite systems. Technological advances in weapons research also benefit other high-tech fields, such as auto industry, optics, and mechatronics. The 4th-generation indigenous fighter jet KF-21 is equipped with modern stealth technology equal to fifth generation fighters, such as US F-35 or China's J-20. KF-21 fighter jets are immediately drew significant attention thanks to its stability, diverse equipment and low operating costs. For the impressive speed and flight ability of KF-21 in Seoul sky, Poland proposed to firstly own its export version. While many fourth and fifth generation aircraft programs are stagnant, this is a crystal clear testament to the product quality of South Korea’s defence industry.
A highlight of the South Korean defence industry is public-private partnership, allowing private manufacturers to deeply consult on designing and manufacturing weapons. Typically in submarine production, Hyundai and Hanwha have jointly bid for large projects with the support of more than 200 small domestic contractors. The growth of the South Korean manufacturing industry has benefited the country by being able to be proactive in most stages. Besides, South Korea is also willing to allow technology transfer and establishment of production facilities abroad. In the $1.6 billion contract with Egypt to purchase K9 self-propelled howitzers, Egypt's Factory No.200 will assemble the system with 30% of the components produced here. Seoul gains additional benefits in allowing localisation as it creates resilience through its strategic manufacturing capacity and secondary supply chains beyond its borders. Hanwha Group is simultaneously setting up K9 howitzer assembly lines in Australia, Egypt and Poland.
Another advantage of South Korea is that its weapons are highly compatible with American and European ones. K9 self-propelled howitzers using 155mm ammunition based on NATO standards are equipped with a computerised fire control system and designed to be easily integrated into commanding and controlling networks. At the same time, K9 self-propelled howitzers have firepower equivalent to more expensive Western artillery. In 2023, South Korea provided the US with about 500 thousand 155mm artillery shells because they are fully compatible with the US Army's howitzer systems. Meanwhile, the Czech Republic, Romania, Slovakia, Finland, Estonia, Latvia, Lithuania and other countries once thought about European arms procurement, can now change for the products at lower prices and quick delivery from South Korea.
South Korean arms manufacturing companies also exploit production capacity, allowing speedy deliveries compared to other arms suppliers. Poland said that its main reason to consider signing a weapons contract with South Korea is its weapons production and supply capacity. In December 2022, just 4 months after the contract was signed, the first 10 K2 main battle tanks and 24 K9 self-propelled howitzers were sent to Poland. At Hanwha Group's K9 artillery factory, robots handle about 70% of welding work and play a key role in increasing productivity.
In fact, South Korean weapons can pervade the global market, despite not being the most advanced in the world, thanks to competitive prices and increasingly good quality. Middle powers, always looking for a balance between benefits and costs, are now seeing South Korean military equipment as an optimal choice. South Korea's success in arms exports is grounded on its ability to produce technologically advanced, high-quality, and competitively priced military equipment.
Thus, the undertaking of intensifying annual defence budget and developing defence industry has been increasingly promoted by South Korea in order to modernise the military and prioritise the development of military science and technology and weapons production. This country not only self-assures over 70% of the military's weapons demand, but also turns out the world's leading arms exporter. This is also the current trend of many countries around the world. However, in a "hot" and sensitive region like Northeast Asia, promoting the development of South Korea's defence industry will have a significant impact on the regional and global security environment, raising concern in the region and the international community.
DANG DONG TIEN – NGUYEN QUANG THUYEN