South Korea’s Defence Industry Boom How Seoul Became One of the World’s Top Arms Exporters in Five Years

Expert Comment — East Asia Programme

2026 07 05

SSouth Korea’s defence industry has undergone a remarkable transformation. Once a net importer of almost all its major weapons systems, Korea has emerged as one of the world’s fastest growing arms exporters. In 2025, Korean defence exports reached approximately $18 billion, up from $5 billion in 2020 and less than $1 billion a decade ago. Korean made howitzers, tanks, submarines, and fighter aircraft are now operated by armed forces across Europe, Asia, and the Middle East. The K9 Thunder self propelled howitzer has become the best selling artillery system in the world.

Poland’s 2022 orders for over 1,000 K2 tanks, 600 K9 howitzers, and 48 FA50 light fighter aircraft were transformative for Korea’s defence industry. The Poland deal demonstrated that Korean manufacturers could compete with and win against established European and American suppliers in NATO markets. Korea’s value proposition combines proven Western compatible platforms, competitive pricing, and rapid delivery timelines that established manufacturers cannot match. The Poland contracts also included significant technology transfer provisions, allowing Poland to produce and maintain Korean designed equipment domestically.

The sustainability of Korea’s defence export boom is uncertain. The domestic defence market is small, limiting economies of scale. Technology transfer requirements in export deals risk creating future competitors. The reliance on government to government deals makes exports vulnerable to political shifts. Korea’s defence industry must navigate these challenges while maintaining the quality and cost competitiveness that have driven its success. The industry’s ability to sustain its export momentum will determine whether Korea becomes a permanent fixture among the world’s top arms suppliers or a temporary phenomenon.

Korea’s defence export model relies heavily on technology transfer. The Poland contracts included provisions for Polish production and maintenance of Korean designed equipment. The transfer of sensitive military technology creates risks for Korea’s own defence industrial base. The more technology Korea transfers, the more it creates potential future competitors. The balance between export revenue and technology protection is a delicate one that Korea must manage carefully. The experience of other defence exporters, including the United States and Russia, demonstrates that technology transfer can create long term competitors. Korea must learn from these examples and calibrate its technology transfer policies accordingly.

Korea’s defence industry has achieved remarkable success in a short period, but sustaining that success will require careful management. The industry must invest in research and development, maintain cost competitiveness, and manage the risks of technology transfer. The global arms market is highly competitive, and Korea’s position is not guaranteed. The industry’s ability to adapt to changing market conditions and evolving customer requirements will determine whether Korea becomes a permanent fixture among the world’s leading arms suppliers or a temporary success story.

Korea’s success in defence exports is driven by several factors. The first is cost competitiveness: Korean weapons systems are typically 20 to 40 per cent cheaper than comparable Western systems. The second is delivery speed: Korean manufacturers can deliver equipment in months rather than the years required by established suppliers. The third is willingness to transfer technology: Korea is more willing than most established suppliers to share manufacturing know how and production capabilities. The fourth is interoperability: Korean systems are designed to be compatible with NATO standards, allowing them to be integrated into Western military forces. The combination of these factors has made Korea an attractive partner for defence cooperation, particularly for countries that need to modernise their armed forces quickly and cost effectively.

The Korean defence industry’s export success is built on a strong domestic industrial base. Korea is a major producer of ships, automobiles, electronics, and steel. The defence industry draws on the skills, technologies, and supply chains of these broader industrial sectors. Korea’s investment in research and development, which is among the highest in the world as a share of GDP, supports the development of advanced defence technologies. The government’s commitment to defence self sufficiency, driven by the threat from North Korea, has created a large domestic market that provides a foundation for export competitiveness. The Defence Acquisition Program Administration coordinates defence procurement and export promotion, ensuring that domestic and export markets are developed in a complementary way.

Korea’s defence export success has created competition with established suppliers, particularly in the Asia Pacific region. Korean companies are competing with Chinese, Russian, and American manufacturers in markets across Asia, the Middle East, and Latin America. The competition is intensifying as more countries seek to diversify their defence suppliers and as the global arms market becomes more contested. Korea’s ability to maintain its competitive position will depend on its continued investment in technology, its willingness to adapt to customer requirements, and its ability to manage the risks of technology transfer. The regional competition in defence exports is a reflection of the broader strategic competition in the Indo Pacific region.

The export boom has had significant effects on Korea’s domestic defence industry. Export revenues have funded research and development, enabled economies of scale in production, and attracted investment in new technologies. The defence industry has become an increasingly important part of Korea’s economy, employing over 50,000 people and generating export revenues that support the domestic industrial base. The relationship between export success and domestic capability is mutually reinforcing: exports provide the revenues that support domestic investment, and domestic investment produces the technologies that drive export success. The Korean defence industry has successfully created a virtuous cycle of export led growth and domestic capability development. The sustainability of this cycle depends on continued investment in technology and continued access to export markets.

Despite its success, Korea’s defence industry faces significant challenges. The global arms market is highly competitive, with established suppliers and emerging competitors. The pace of technological change is accelerating, requiring continuous investment in research and development. The domestic market, while significant, is limited in scale. The need to transfer technology to export customers creates risks of creating future competitors. The industry’s dependence on government support creates vulnerability to political changes. The management of these challenges will determine whether Korea’s defence export success is sustained over the long term. The industry’s ability to adapt, innovate, and compete will be tested in the years ahead.

The global arms market is undergoing significant changes that create both opportunities and challenges for Korea. Global defence spending has increased in response to the war in Ukraine and rising strategic competition between the United States and China. Many countries are modernising their armed forces and seeking to diversify their defence suppliers. Korea is well positioned to benefit from these trends. The demand for Korean defence equipment is likely to remain strong in the medium term. However, the market is also becoming more competitive. Established suppliers are responding to Korean competition by reducing prices, improving delivery times, and offering technology transfer. New entrants, including Turkey, India, and Israel, are also competing for market share. Korea must continue to innovate and adapt to maintain its competitive position.

The long term prospects for Korea’s defence export industry depend on several factors. The global security environment will continue to drive demand for military equipment, particularly in Europe, Asia, and the Middle East. Korea’s competitive position will depend on its ability to maintain cost advantages, invest in new technologies, and adapt to changing customer requirements. The government’s continued support for the defence industry is essential. The Defence Acquisition Program Administration must continue to coordinate procurement and export promotion effectively. The industry must continue to invest in research and development and maintain the quality and reliability that have driven its success. If these conditions are met, Korea’s defence export industry has the potential to continue its impressive growth trajectory and establish itself as a permanent fixture in the global arms market.