On the offense in defense exports

Kim Kyung-min

The author is an honorary professor of political science and diplomacy at Hanyang University.

On July 27, Poland’s Ministry of National Defense announced a bold plan to buy 980 K2 Black Panther tanks, 672 K9 Thunder self-propelled howitzers and 48 FA-50 light attack aircraft from South Korea. If you include ammunition, armored vehicles and other defense-related equipment, the total cost exceeds 40 trillion won ($27.9 billion).

The impressive achievements were made possible by the three leaders of Korea’s defense industry: Hanwha Defense, the producer of the K9 self-propelled howitzers; Hyundai Rotem, the manufacturer of K2 tanks; and Korea Aerospace Industries (KAI), maker of the FA-50 attack aircraft. LIG Nex1, which has been supplying short-range missiles, also helped strengthen Korea’s defense industry.

K9 Thunders currently occupy 50 percent of the market. (Over 700 of them have been exported to eight countries, including Turkey, India, Australia and Finland.) They have a shooting range of up to 40 kilometers (25 miles) and are highly accurate, making the self-propelled howitzers popular in the global defense market. Due to its domestic situation, Poland advanced its import schedule to August 26 for 212 K9 howitzers from Hanwha Defense costing 3.2 trillion won. A contract for a second batch of 460 howitzers is being negotiated.

Hyundai Rotem signed a formal contract with Poland, on August 29, for its first shipment of 180 K2 tanks, costing 4.5 trillion won, to be followed by another contract for a second shipment this year. After United States and Germany discussed ending production of their once-powerful tanks, K2s emerged as a quality replacement. The summit between President Yoon Suk-yeol and his Polish counterpart in June at the NATO Summit in Madrid, as well as back-to-back meetings between the defense ministers of the two countries, also contributed to the exports.

Impressed by Poland’s purchase of hundreds of K2 tanks, Norway began to show interest in placing a $1.7 billion order due to the need to defend itself against Russia. Given the apparent impact on other NATO member countries — particularly in Eastern Europe — the exports to Poland mark a watershed moment for Korea’s defense industry. The Voice of America has noticed Korea’s effort to find a niche market based on a value-for-money strategy.

Value for money means that made-in-Korea weapons are of a quality comparable with products from traditional defense juggernauts and yet the prices are lower. But value for money is not the only strength, because Korea also has advantages of fast supply, timely funding by the Export-Import Bank and a generous attitude toward local production of weapons. Few countries can match Korea on these terms.

Korea can satisfy clients in various areas, including cultural exchanges. Korea is emerging as a key state in the global defense markets. According to the Stockholm International Peace Research Institute (Sipri), Korea’s share in the global defense export market ranked 8th (2.8 percent) between 2017 and 2021.

In addition to Eastern European countries, Australia has considered introducing next-generation armored vehicles in a $7.5 billion contract with Hanwha Defense for its AS21 Redback infantry fighting vehicles possibly together with K239 Chunmoo multiple-rocket launchers developed by the same company. If the contract is signed, Korea can become a top-5 defense leader globally.

Noticeable in the exports to Poland is the first entry of the FA-50 light attack aircraft into the European market. FA-50 fighter jets are an advanced versions of KTX-2 supersonic jet trainers. Due to the need for a supersonic trainer in order to train pilots for supersonic fighter jets, Korea had to borrow these aircraft from advanced countries, including the UK, in the past. So the country drew up a plan to produce a supersonic trainer on its own, but the project was budgeted at 1.4 trillion won and went off track due to the 1997-98 Asian financial crisis.

A strong determination to make a supersonic trainer on its own for the ultimate goal of domestic production of fighter jets allowed Korea to develop the FA-50 light attack aircraft armed with air-to-surface missiles. The stunning development of KF-21 advanced supersonic fighter jets followed the same path as the FA-50 light attack aircraft.

The single-engine FA-50 attack aircraft and the twin-engine F-21 fighter jets both carry engines developed by General Electric. It takes at least 20 years to develop aircraft engines as it requires cutting-edge technology. Massive funding needed for the development forced Korea to suspend engine production efforts. The challenge should be addressed in the future.

What defense area does Korea need to develop for the future on top of the tanks, self-propelled guns and FA-50 light attack aircraft? Three fields await.

First is the development of submarines powered by lithium-ion batteries, which can operate for up to a month without recharging. Conventional diesel submarines have trouble carrying out military operations as they cannot operate for more than a week without refueling. Nuclear-powered submarines can run for years without refueling, but most countries using diesel submarines are expected to replace them with lithium battery submarines soon. Japan is changing its 24 diesel subs to battery-based subs. Korea too prepares for the dramatic transition.

Australia’s negotiation to purchase lithium ion-battery submarines from Japan failed because of Canberra’s demand for local production. Given Korea’s strength in shipbuilding, including warships and subs, the country can emerge as a leading producer of lithium battery-based submarines if it can manufacture them to meet the demand from clients for local production.

Second is the cyber defense industry. Israel earned $6.75 billion from exporting its cyber technology in 2020 alone. The field demands sophistication of cyber security capabilities impregnable to hacking from outside to steal information about national security matters and business. The area also calls for technology that can neutralize cyber systems of enemies.

Korea won at DEF CON — the equivalent of a hackers Olympics — on its own in 2015 and 2018 and in a joint team with the U.S. in 2022. The competitiveness can lift Korea to a frontrunner in the cyber defense sector in the future.

Third is short-range tactical missiles with high accuracy. Korea shipped 2.6 trillion won short-range missiles — Cheongung-2s — to the United Arab Emirates earlier this year. The UAE chose them as they are of better quality — and are cheaper — than those of the U.S. The Cheongung-2 was developed by LIG Nex1, Hanwha Systems and Hanwha Defense with the sponsorship of the Agency for Defense Development (ADD). Known as “Korean Patriot missiles,” they are interceptors.

After anti-tank Hyeongung missiles were exported to Saudi Arabia and other Middle East countries, Eastern European countries are showing a keen interest in the missiles following Russia’s invasion of Ukraine in February. Russia must stop the war. But since Korea’s defense industry drew much attention from Europe, it can expand the market to the rest of the world.

Korea’s largest-ever export to Poland has marked a milestone for its defense industry. That achievement is the result of quality at a good price. Besides, there is no delay in delivering weapons, not to mention a smooth supply of parts.

Hanwha Defense has challenged the self-propelled howitzer market with its newly developed K9A2s that can load shells automatically. Technology advances always. If Korea continues upgrading the weaponry it exports, it can top the world at least in the categories of tanks and self-propelled guns one day. In the submarines and cyber defense field in particular, the government and the private sector must invest heavily. Otherwise, Korea can hardly become a top defense industry country.
Translation by the Korea JoongAng Daily staff.