Korean defense companies, which were growing rapidly and posting record-high sales this year, have hit a rocky reef. The government’s full diplomatic support is vital for defense industry exports, but it has become challenging too expect government support for the time being due to the political chaos caused by the passage of President Yoon Seok-yeol’s impeachment. The bigger problem is that traditional defense powerhouses such as the United States and Europe are actively developing weapons. The United States has also begun developing conventional weapons in which Korea has competitiveness. Voices are growing that Korean defense companies must engage in innovation in research and progress (R&D), and the government must step in to support exports, calling for ‘two-person, three-way’ cooperation.
●Reconstruction of the defense industry market in Europe and the United States
The German government recently approved the export of the Eurofighter fighter jet to Türkiye. Germany has previously banned arms exports to the Middle East due to human rights issues. However, in January of this year, the ban on arms exports to Saudi Arabia was lifted, and the export of fighter jets to Turkiye was approved. The defense industry interprets this as the German government considering defense industry as a strategic industry and opening the door to weapons exports in consideration of the rapidly increasing global demand for weapons. Last month,german Defense Minister Boris Pistorius said at an official event,“The immediate task is to strengthen Germany’s defense industry base,” and “We will improve the industrial structure to strengthen the defense industry.”
Last month, the European Parliamentary Research Service (EPRS) analyzed in a report titled ‘Strengthening Europe’s Defense Industry’ that “Europe is strengthening its defense industry facilities in the region and pursuing an appropriate increase in defense spending.” The report pointed out that “the decline of Europe’s defense industry has led to increased imports of weapons from non-European countries,” and specifically mentioned that Poland purchased Korean weapons instead of European weapons. They are wary of importing Korean weapons.
Recently, Europe has been working to rebuild and expand the defense industry market. Germany is expanding its production facilities for the ‘Leopard’ tank, a competing model of the K2 tank, which was only producing 5 to 10 units per year. Rheinmetall, a Leopard production company, decided to build a new tank production base in Hungary, and recently completed and put into operation an armored vehicle Lynx production facility in Ukraine.
France,which has surpassed Russia in rankings of arms exporters over the past five years and has risen to second place,is also conducting military training for 2,000 Ukrainian soldiers to strengthen its grip on security capabilities in Europe. Poland, the largest importer of domestic weapons, allocated 1 trillion won in its budget to expand its own ammunition production facilities, and Ukraine also completed the expansion of its own ammunition production facilities.
The United States is turning its attention not only to cutting-edge weapons but also to conventional weapons. The United States, which stopped producing most conventional weapons after the end of the Cold War, recently decided to operate a trinitrotoluene (TNT) production facility in graham, Kentucky for the first time in 40 years to increase its 155mm artillery shell production capacity. An investment of 610 billion won was also made. TNT is an explosive used in 155mm artillery shells. Turkiye, which is chasing
after K Defense, decided to set next year’s defense-related budget at $47 billion (approximately 67.5 trillion won), the largest ever. This is a 17.5% increase compared to this year.
●“Need to establish overseas K-defense production base, etc.”
Defense industry experts believe that competition among defense companies in the global defense market will further intensify in the future. In this situation, in order for K defense companies to continue to grow, it is indeed critically important to strengthen security cooperation with K defense importing countries at the government level. Jang Won-jun, a researcher at the Korea Institute for Industrial Economics and Trade, said, “For the continued growth of the K defense industry, we need to strengthen government-level cooperative relationships such as the Korea-U.S. Defense Mutual Procurement Agreement (RDP-A), which is equivalent to the ‘Defense Free Trade Agreement (FTA).’” He added, “Through this, Korea “We need to open the way for companies to enter the U.S. defense supply chain,” he said.
Expanding local production facilities of defense companies is also important. Yoo Hyeong-gon, head of the policy research center at the Korea institute for Defense Technology, emphasized, “In order to transform the K defense industry into an export-oriented industrial structure, it is indeed necessary to establish a production base in an export target country.” Doing so may weaken the tendency of K defense importing countries to view Korean weapons with colored glasses as ’imported from overseas.’ Director Yoo added, “The government should also create a separate law for defense industry exports to support areas that companies cannot handle on their own, such as offset trade (transferring technology, etc.in return for weapons buyers).”
Reporter Kim Hyeong-min [email protected]
Reporter Byeon Byeon-guk [email protected]
- I’m sad
- 0dog
- I’m angry
- 0dog
hot news now
– What are the main challenges currently faced by the Korean defense industry?
Interview Between Time.news Editor and Defense Industry Expert
time.news Editor (TNE): Welcome, and thank you for joining us today. Our discussion is centered on a critical moment for the korean defense industry, experiencing both growth and impending challenges. To shed light on these issues, we have with us Dr. Jang Won-jun, a researcher at the Korea Institute for Industrial Economics and Trade. Dr.Jang, could you provide us with an overview of the current state of the Korean defense industry?
Dr. Jang Won-jun (JW): Thank you for having me. the Korean defense industry has indeed seen remarkable growth, achieving record-high sales this year. However, this growth now faces important hurdles. With the recent political turmoil surrounding President Yoon seok-yeol’s impeachment, expectations for government support in defense exports have diminished. This situation is precarious as we compete with traditional powerhouses like the U.S. and Europe,who are also increasing their defense capabilities.
TNE: You mentioned the political climate impacting support for defense exports. How essential is government backing for the competitiveness of the korean defense sector?
JW: Government support is crucial. The defense sector requires strong diplomatic backing when entering international markets. As an example, without solid government-level cooperative relationships, Korean companies may struggle to integrate into defense supply chains, particularly in the U.S.It’s essential to pursue agreements akin to a “Defense Free Trade Agreement” (FTA) to bolster our position.
TNE: What are some strategies that you believe the Korean defense companies should pursue in light of these challenges?
JW: innovation in research and development is non-negotiable. We need to focus on cutting-edge technologies while also revisiting conventional weapons production, where we have competitive advantages. Additionally, establishing K-defense production bases overseas will be key to maintaining our competitive edge in the global market.
TNE: It seems that the international landscape is shifting. You noted Germany’s recent arms export decisions as a reaction to changing dynamics. How do these moves by global powers affect Korea?
JW: Absolutely. Germany lifting its arms export ban to countries like Saudi Arabia and Türkiye signals a larger trend of nations re-evaluating their defense strategies, leading to increased competition. With countries like Poland opting for Korean products over European ones, we must capitalize on this opportunity while enhancing our export systems. However, we also need to remain cautious and avoid over-reliance on singular markets.
TNE: You touched upon the need for stronger connections with importing countries. Can you elaborate on potential partnerships that could benefit K-defense?
JW: A triumphant partnership model would involve strengthened alliances between the Korean government and its allies, particularly in Asia and North America. Engaging more closely with countries like the U.S. and Türkiye—not only for exports but for joint production initiatives—can yield significant benefits.Additionally, diplomatic efforts to facilitate the entry of Korean products into these countries can enhance our global presence.
TNE: With the competitive nature of the defense market,are there any specific sectors where you see significant growth potential for Korean companies?
JW: Yes,areas like drone technology,cyber defense,and advanced weaponry systems are ripe for growth. As the global demand for such technologies increases, our ability to innovate and provide effective solutions could place us in a strong position. Moreover, collaboration with foreign partners in these sectors can enhance our technological capabilities.
TNE: as we look towards the future, what key factors will determine the survival and success of the korean defense industry?
JW: Innovation and adaptability will be critical. The political will to support the defense sector plays a significant role as well. Balancing domestic production demands with international collaborations will determine how effectively we navigate the complex global defense market. This may involve revisiting strategies and strengthening both governmental and industrial alliances.
TNE: Thank you, Dr. Jang,for your insights. It’s clear that while challenges lie ahead for the korean defense industry, there are also significant opportunities for growth. We appreciate your time today.
JW: Thank you for having me. It’s been a pleasure discussing these critically important issues.