- South Korean defense firms are increasing efforts to expand arms exports to the Gulf region, citing rising demand for air defense and ground systems.
- Hanwha Aerospace is developing export channels and production sites in Saudi Arabia, with estimated deals exceeding $26 billion.
South Korea’s defense industry is setting its sights on the Middle East as its next major export destination, according to a senior analyst from Korea Investment & Securities.
At a seminar hosted Monday in Seoul by Hanwha Asset Management, a firm known for its defense-focused exchange-traded fund PLUS K-Defense, analyst Jung Nam-hyun said the region is emerging as a key opportunity for Korean defense firms.
“Air defense exports including launchers and radars to the Middle East continue to expand,” Jung said, noting that the aging fleets of tanks and armored vehicles across the region are creating fresh demand for replacement systems. According to Jung, Hanwha Aerospace and Hyundai Rotem are now actively conducting marketing operations in the region.
He added, “Hanwha Aerospace is developing a large-scale export network to Saudi Arabia and is also working to secure a local production base.” The expected scale of Saudi Arabia’s acquisition of Korean weapons systems is estimated to exceed 35 trillion won, Jung said.
The Korean defense sector’s recent success in Europe also featured in the discussion. Jung noted that while many European countries are experiencing ammunition shortages and plan to expand their production capabilities, Korean firms are working with them as suppliers—particularly in the provision of propellants—rather than as direct competitors.
The rapid growth of the industry has led to concerns about a potential earnings plateau, but Jung dismissed that idea. He argued that South Korean firms are likely to maintain high margins due to continued excess demand for weapons systems and expanding market share compared to 2022. He also pointed to the financial capacity of new Middle Eastern clients, which he said exceeds that of European buyers such as Poland.
In a separate presentation, Lee Sun-yeop, head of AFW Partners and a defense industry expert, highlighted how modern warfare trends centered on drones and artificial intelligence are reshaping battlefield dynamics—and offering new advantages for Korean-made systems.
“Tanks quickly become drone targets if stationary, so fast evasive maneuvers are critical,” Lee said. “Heavier main battle tanks from countries like Germany tend to get stuck in muddy terrain like that of the Russia-Ukraine battlefield. In contrast, Korean tanks, with their lighter armor, can escape such conditions more quickly and are showing operational advantages.”
Lee also discussed Korea’s emerging strength in counter-drone systems. “With the development of AI, jamming drones is no longer effective. They must be shot down,” he said. “While Korea has lagged in drone production, it has developed strong capabilities in anti-drone weaponry, building a new area of competitive strength.”
In 2023, South Korea announced its goal of becoming the world’s fourth-largest defense exporter. With new partnerships, local production deals, and continued demand from high-budget buyers, the Middle East may become a pivotal chapter in that effort.