In 1940, U.S. President Franklin D. Roosevelt famously declared that the United States must become “the great arsenal of democracy.” Today, that label might also apply to South Korea. As U.S. allies and partners around the world build up their defense capabilities in the face of Russian and Chinese military threats, a growing number are turning to South Korean defense firms to fulfil their procurement needs. After years of incremental growth in South Korean defense exports to states in Asia and the Middle East, South Korea is emerging as a major global defense industry player. In 2022, South Korea’s defense exports are expected to surpass $10 billion, representing a 177 percent increase over the last five-year period, making it the eighth-largest arms exporter in the world. South Korea is now offering and fulfilling the defense procurement needs of frontline U.S. allies in the Indo-Pacific and Europe.
The emergence of what might be called the K-arsenal is a development that the United States should support. Commercial logic would posit South Korean defense companies as competitors to U.S. industry. But cast in a strategic light, Seoul’s growing ability and willingness to supply advanced capabilities to other U.S. allies should be welcomed, particularly as the Biden administration grapples with the parallel challenges of resourcing military strategies in Europe and the Indo-Pacific while shoring up America’s own defense industrial capacity. Even if questions remain over the true extent of South Korea’s strategic alignment with the United States, Seoul is nevertheless generating strategic effects by arming states facing Chinese and Russian coercion.
South Korea Joins the Defense Major League
As we have closely tracked, South Korea’s entry into the Australian defense industry market is a case in point. Earlier this year, the two countries broke ground on an AU$1 billion deal with Hanwha Defense to build 30 self-propelled artillery howitzers and 15 armored ammunition resupply vehicles in Australia, making it Australia’s first defense deal with an Asian country and South Korea’s first with a member of the inner circle of U.S. allies. The project is seen as a prelude to a massive AU$27 billion contract to build up to 450 infantry fighting vehicles, for which Hanwha Defense is also a finalist, that will be announced later this year.
According to Breaking Defense, a South Korean defense delegation also recently offered to provide Australia with its latest KSS-III conventionally-powered submarines, built by Daewoo Shipbuilding and Marine Engineering and Hyundai Heavy Industries. At “seven years from signature to delivery” these would provide an interim capability while Australia awaits the arrival of its AUKUS nuclear-powered submarines. The final decision will be determined by the new Labor government’s Force Posture Review and the recommendations of the AUKUS Nuclear Powered Submarine Taskforce in March next year. But the offer suggests South Korean defense firms see potential for closer cooperation with Australia beyond armored vehicles.
More broadly, this offer signals South Korea’s emergence as a source of high-end military kit to other U.S. allies and partners on the frontlines against China and Russia. Indeed, on the other side of the world, three South Korean defense firms recently signed deals with the Polish government for 980 tanks from Hyundai Rotem, 48 light attack fighters from Korea Aerospace Industries, and 648 self-propelled howitzers from Hanwha Defense in a deal estimated to be worth in excess of $15 billion over its lifetime. The deal was especially notable given Poland’s recent efforts to replace its Soviet-era systems with advanced U.S. platforms, such as F-35 fighter jets, Patriot surface-to-air missile batteries, Abrams tanks, and most recently High Mobility Artillery Rocket Systems.
South Korea’s willingness to sell to Poland helps to offset its refusal to directly provide Ukraine with military equipment in addition to the humanitarian and non-lethal aid that it is already sending. Indeed, the deal could well benefit Ukraine. Poland provided Ukraine with 18 of its 155mm Krabs self-propelled howitzers in March. The Krabs are manufactured in Poland in a technology-sharing agreement with Korea’s Hanwha Defense that utilizes Hanwha’s K9 Thunder howitzer chassis with British turrets. Poland has reportedly promised to sell Ukraine a further 60 Krabs by the end of next year. This could set a precedent for other European militaries that also field the K9, such as Norway, Estonia, Finland, and Turkey as they replenish and upgrade their inventories. In any case, the key takeaway here is that in both the Australian and Polish cases, South Korea has moved to outfit key U.S. allies on the frontlines of coercion.
A Long Time Coming, But the Right Time to Arrive
South Korea’s ambitious approach to defense industry partnerships is the continuation of a longstanding quest for defense industrial self-reliance, something it has pursued while also being one of the biggest purchasers of U.S. defense equipment. South Korea’s export success has been made possible by a combination of factors, including a robust domestic civil manufacturing base, competitive pricing, rapid delivery schedules, inclusive local industry participation, customization, and technology transfer arrangements to allow for subsequent production by partners themselves. The “K-arsenal” of K9 Thunder self-propelled howitzers, K21 infantry fighting vehicles, K2 tanks, KM-SAM missiles, and more are poised to equip U.S. allies and partners with new high-end warfighting capabilities. These are only the tip of an even more ambitious domestic defense modernization program in motion, including KDX naval guided-missile destroyers, KSS-III attack submarines, KF-21 fighter jets, a future light aircraft carrier, and ballistic missiles, all being developed with an eye to future exports.
South Korea is arriving as a major global provider of modern military kit just as the United States grapples with how to resource both its own strategies and the requirements of its allies in both Europe and the Indo-Pacific. In its efforts to arm Ukraine, the Biden administration has made nine successive drawdowns from U.S. stockpiles of weapons systems and munitions, amounting to a significant drain on America’s reserve of critical warfighting tools. An industrial base that was already suffering from a capacity-demand mismatch and single-source supplier bottlenecks has struggled to keep pace with surging demand from what is ultimately a proxy conflict. To make matters worse, growing demands from Ukraine and frontline European partners for advanced U.S. weapons systems are in direct competition with similar demands in Asia. While it is important not to overstate the true extent of the problem, it is increasingly clear that the United States alone cannot arm its global suite of allies and partners the way it once did.
“We Go Together” or We Go Around
U.S. armaments are still the global gold standard, but there are not enough to go around, nor, if you ask many allies, are they sufficiently affordable. As captured by the South Korea-U.S. alliance’s motto, “we go together,” this requires leaning on a wider pool of suppliers to help it to fill the gaps in allied defense capabilities. The fact is that in today’s world of global supply chains and multinational companies there are few truly autarkic national defense enterprises. South Korean defense firms partner closely with U.S. firms in components such as jet engines. They have also worked with companies in NATO countries such as Italy, Turkey, and Germany. Nonetheless, government customers want to build domestic expertise, workforces, and infrastructure to produce and sustain critical defense capabilities on their own, even if self-sufficiency is not a realistic outcome.
But the U.S. government has historically controlled the pace and scale at which this can happen in allied nations. In fact, in some ways such impediments are factors that have propelled South Korea’s emergence as a serious defense industry player. In recent years, U.S. officials were expressing concern that South Korea was a competitor stealing U.S. technology and making cheap imitations. Such was the level of distrust that in 2015 the U.S. Congress banned four aircraft communications and tracking technologies from being shared with South Korea, including the Advanced Electronic Scanner Array. This was due to concerns that they would be used in the development of South Korea’s indigenous KF-21 fighter jet program. Despite the setback, within seven years a South Korean defense firm eventually built a domestic array and is now poised to export it.
Reconciling the commercial and strategic logics that underpin defense industry matters is no easy thing, but it is increasingly necessary. Rather than being perceived solely as a commercial competitor, the United States ought to view South Korean defense firms as having a complementary role to play in fulfilling the defense acquisition needs of key allies and partners. For example, Australia is doubling down on off-the-shelf purchases of U.S. maritime helicopters, tanks, and potentially nuclear-powered submarines, and seeking deeper integration in a joint industrial base with the United States. At the same time, successive Australian governments are committed to building sovereign industrial capabilities for domestic production and sustainment of priority systems like precision guided missiles. This is why Australia is building the facilities to assemble the AS9 Huntsman self-propelled howitzer in Australia rather than just buying 30 K9 Thunder howitzers directly from South Korea.
Defense Industry and Strategic Alignment
When major purchasers of Russian military platforms such as India and Vietnam were reluctant to condemn Russia’s invasion of Ukraine, it was a reminder of the complex relationship between defense procurement sources and strategic alignment. Defense contracts often generate powerful, and sometimes unforeseen, linkages between countries over time, as Australia’s falling out with France over its cancelled submarine contract clearly illustrated. At the same time, the cases of Sweden and Germany are reminders that states can foster strong defense export industries without changing their foreign policy or security relationships with recipient states. A Swedish firm designed Australia’s Collins-class submarines and a German firm designed South Korea’s Jang Bogo-class submarines, but neither deal transformed bilateral relations.
South Korea, it seems, is walking a fine line between these two poles. Given that South Korea is not a military superpower, its defense sales have attracted less attention about the potential strategic signals they may be broadcasting. In fact, South Korea’s rise as a defense industry power is likely quite appealing to many countries that perceive significant political costs to investing in American, Russian, or even Chinese military platforms but still desire high-end military kit. And amid persistent debate around South Korea’s apparent “strategic ambiguity” when it comes to U.S. goals, it is also worth pointing out that buttressing the deterrence capabilities of other frontline allies and partners is a useful contribution to collective regional balancing. In this way, South Korea is generating strategic effects in the region even short of clear statements of strategic intent.
That said, there may yet be real geopolitical costs to South Korea’s shift towards enhanced defense industrial partnerships with U.S. allies on the front lines of high-end strategic competition. This is a different from arming distant partners in the Middle East against rivals like Iran. Even as successive South Korean administrations demur when asked to provide strategic clarity on various military contingencies, policymakers in Beijing and Moscow will not be blind to the fact that Seoul is nevertheless supporting the provision of weapons that U.S. allies could use against them. While the costs might be unclear at this stage, the possibility of retaliation should nevertheless trigger serious debates about how South Korea can prepare for and manage any potential fallout.
Roosevelt’s call to arms came a year before the United States formally entered World War II. Yet he presciently recognized that the power of American industry would tilt the scales of the war. That expectation has been revived in the wake of Russia’s invasion of Ukraine and the Biden administration’s commitment to provide advanced weapons systems to Kiev for “as long as it takes.” But this endeavor, like many others, is one that the United States can no longer fulfill alone. The K-arsenal can help.
Peter K. Lee is a research fellow at the United States Studies Centre at the University of Sydney and a Korea Foundation fellow at the University of Melbourne. His Ph.D. thesis was the first study of the Australia-South Korea security relationship and he previously worked at the Asan Institute for Policy Studies in Seoul, Korea.
Tom Corben is a research associate at the United States Studies Centre at the University of Sydney. He was previously a Lloyd and Lilian Vasey Fellow with Pacific Forum, where he worked extensively on Japanese and South Korean defense and foreign policies.