South Korea fell short of its defense export targets last year due to delays in several key contracts initially planned for 2024. However, the defense industry remains optimistic about securing additional deals this year, including the second phase of Poland’s K2 tank program and agreements for the K9 self-propelled howitzer, Chunmoo multiple rocket launcher, FA-50 light combat aircraft, and Cheongung-II surface-to-air missiles. The Defense Acquisition Program Administration (DAPA) has pledged active support to achieve record-breaking export figures in 2025.
According to industry sources on Jan. 6, South Korean defense companies signed export contracts with various regions, including Europe, the Middle East, and Latin America, last year. On the ground systems front, Hanwha Aerospace secured contracts for 72 Chunmoo Multiple Rocket Launcher Systems (MRLS) and guided missiles with Poland and for 54 K9 self-propelled howitzers with Romania. LIG Nex1 secured a deal to supply Iraq with eight Cheongung-II batteries, the mid-range surface-to-air missile block-II system, while Hyundai Rotem exported 30 K808 wheeled armored vehicles to Peru. In the naval sector, HD Hyundai Heavy Industries (HD HHI) signed a contract for the local construction of four naval vessels for the Peruvian Navy. For aerial systems, Korea Aerospace Industries (KAI) exported two Surion helicopters to Iraq for the first time.
Despite these achievements, the total contract volume for 2024 fell short of expectations. According to data from lawmaker Yoo Yong-weon’s office, South Korea’s total defense exports amounted to $9.5 billion (approximately 13.94 trillion won) last year, less than half of the original target of $20 billion (about 29.35 trillion won). DAPA attributed the shortfall, which brought the total to less than $10 billion, to the postponement of several export projects totaling around $9.4 billion due to prolonged negotiations.
The second phase of Poland’s K2 tank contract is widely expected to be finalized this year. In August 2022, Poland signed a $4.5 billion contract with Hyundai Rotem and DAPA to purchase 180 K2 tanks. Negotiations are ongoing for a second phase that includes a performance-enhanced model, the K2PL (K2 Poland), and local production conditions. This phase, also involving 180 tanks, mirrors the scope of the initial deal.
The delay stems from disagreements between Poland’s state-owned defense firm PGZ, the local partner, and the Polish military over costs. PGZ has cited expenses related to factory renovations, production line setup, and employee training. A DAPA official said the issue is “not related to any state of emergency in our government but rather a difference in stance between local stakeholders. Once these negotiations conclude, the contract is expected to proceed more rapidly.”
KAI is pursuing additional FA-50 export contracts with the Philippines and Malaysia this year. The company previously exported 12 FA-50 fighter jets to the Philippines in 2014 and secured a Performance-Based Logistics (PBL) contract last year to maintain and service the fleet. The Philippine government, which is modernizing its defense capabilities, is reportedly considering acquiring 12 more FA-50 units.
Malaysia signed a deal early last year to purchase 18 FA-50 aircraft and is now exploring a second contract for the same number. Additionally, during a South Korea-Peru summit in November, KAI proposed exporting both the FA-50 and the KF-21, South Korea’s next-generation fighter jet, to Peru.