Defense Industry News

Doosan Enerbility and LIG Defense & Aerospace signed a memorandum of understanding on October 19, 2026 at Doosan Tower in Bundang to co-develop domestically produced engines for next-generation guided weapons, announced the following day. LIG D&A leads the missile system while Doosan develops the propulsion unit, with the two firms cooperating through testing, evaluation and certification, forming a joint research and development organization and a working-level council. They plan to review mass production and additional cooperation after the propulsion system is developed and to pursue joint marketing in the United States. The partnership aims to cut dependence on foreign engines that constrain exports of long-range precision strike systems. Signatories were Son Seung-woo, head of Doosan's Power Service business group, and Park Tae-sik, head of LIG D&A's missile systems division.

LIG Defense & Aerospace announced on October 19, 2026 a reorganization effective November 2 that replaces four of its seven business and management division heads, creates head-of-business and head-of-operations posts reporting to the CEO, establishes a Compliance and Audit Office to strengthen internal controls, and names a regional head for Europe and Latin America. The move came a day before the Defense Acquisition Program Administration's 20-member contract review committee met on October 20 to decide sanctions after prosecutors indicted two LIG D&A executives for allegedly providing about 460 million won in bribes to a DAPA evaluation official, alongside two cost-accounting violations. All 27 prior bribery cases since DAPA's founding ended in bid-participation bans, and the State Contracts Act prescribes a two-year ban for bribes of 200 million won or more, though a fine may substitute where competition would otherwise collapse; DAPA Minister Lee Yong-cheol told lawmakers he was weighing the impact on force deployment. At stake are LIG D&A's roughly 1 trillion won electronic warfare aircraft program and its KF-21 missile contracts. The committee's decision had not been published as of October 20.

Hyundai Rotem's board approved on October 19, 2026 the purchase of Hyundai Wia's Special Business Division for 358.386 billion won (about $269 million) through a business transfer covering assets, liabilities, employees and intellectual property. The division makes the 120 mm main gun for the K2 Black Panther, 155 mm barrels for the K9 Thunder, CIWS-II naval close-in weapon systems and remote weapon stations, making Hyundai Rotem the first Korean tank builder to control its own cannon production. The business was valued at 480 billion won, with 117 billion won of land and buildings excluded and leased instead; Rotem will retain all staff and build its own production line later. Hyundai Wia shareholders vote on November 27, dissenters may demand a buyback at 51,811 won per share until December 16, and Wia can withdraw if buyback claims approach 140 billion won. Closing is targeted by March 31, 2027. Hyundai Wia will redirect proceeds to thermal management and robotics, consolidating Hyundai Motor Group's weapons business under Rotem.

Hyundai Rotem reported preliminary third-quarter 2026 consolidated revenue of 1.6207 trillion won, up 0.1 percent year on year, and operating profit of 247.1 billion won, down 11.0 percent and below the 276 billion won consensus. Net profit fell 10.3 percent to 178 billion won. Defense and aerospace operating profit dropped 10.5 percent to 236 billion won while the rail division earned 5.9 billion won. Cumulative new orders through September were 3.8 trillion won, down 74.2 percent from a year earlier, and the order backlog slipped 2.1 percent from end-2025 to 29.14 trillion won as the Peru, Romania and Iraq K2 programs remain unsigned. Shares fell about 10 percent on October 19 as the results landed alongside the Hyundai Wia defense-unit acquisition.

Korea's four major defense contractors are expected to post combined third-quarter 2026 operating profit of about 1.68 trillion won, down 4.1 percent from the previous quarter, Global Economic reported on October 18, 2026, as Polish export shipments slipped into October and delayed revenue recognition while a stronger won squeezed export margins. Brokers cut target prices across the board for Hanwha Aerospace, LIG Defense & Aerospace and Hyundai Rotem in mid-October, with Asia Business Daily noting that major year-end events such as Saudi, Romanian and Iraqi decisions remain the catalysts. Korea Investment & Securities forecast Hanwha Systems third-quarter revenue of 1.15 trillion won and KAI revenue of 1.20 trillion won. Hyundai Rotem's preliminary results on October 19 came in below the 268.6 billion won operating profit consensus. Hanwha Aerospace reports on October 30.

The Defense Acquisition Program Administration is revising contract evaluation rules to curb unrealistically low bids on weapons programs, Seoul Economic Daily reported on October 15, 2026. The changes introduce a bidding floor below which offers are not accepted and raise the weighting of technical capability relative to price, with revisions to be completed in the second half of 2026. Separately, DAPA said on October 11 that it aims to finalize a multiple-award bidding model by December, allowing more than one supplier to be selected for a program to secure supply chains and keep competition alive. The reforms follow the 2026 bribery case involving a DAPA evaluation official and industry complaints that price-driven awards had squeezed small suppliers.

A Wall Street Journal report relayed by Korean media on October 13 and 14, 2026 said Hanwha Philly Shipyard lacks space and customers nearly a year into the Korea-US "Make American Shipbuilding Great Again" (MASGA) initiative. The yard's three container ships for Matson are priced at about $330 million each, roughly twice the cost of comparable vessels built in Korea or China, and Hanwha's planned $5 billion expansion has stalled while it awaits US government financing, according to an unnamed source. Hanwha's US Navy work so far is limited to the Next Generation Logistics Ship design effort with VARD and a Missile Defense Agency vessel project with TOTE. Seoul Economic Daily added that no Korean shipbuilder other than Hanwha has committed to the Philadelphia site and that Korea's $150 billion shipbuilding investment pledge remains largely on paper. Hanwha says the workforce has more than doubled since 2024 to nearly 2,500.

The US Army and Hanwha Defense USA held an official naming ceremony for the XM1776 Mobile Tactical Cannon at the Hanwha booth during the AUSA Annual Meeting in Washington on October 12, 2026. The XM1776 is the American version of Hanwha's K9 Mobile Howitzer, a wheeled 155 mm system derived from the K9 Thunder, of which more than 2,500 are fielded worldwide. Under the August 2026 Mobile Tactical Cannon award the Army has ordered nine prototypes with an option for nine more. Hanwha Defense USA is establishing a Phase I integration and test site in Opelika, Alabama, and said it would meet more than 70 existing and prospective suppliers to form an Artillery Industrial Base Coalition. COO Mike Smith called the XM1776 the start of the Army's long-range precision fires modernization effort; the cannon had also been shown at a first-ever Army Modernization Day on Capitol Hill earlier in October.

At the National Assembly Defense Committee's annual audit on October 13, 2026, Defense Acquisition Program Administration Minister Lee Yong-cheol reported plans to accelerate the Jang Bogo-N nuclear-powered submarine, targeting a first boat in the mid-2030s and operational service in the late 2030s, and to speed acquisition of AI-based combat systems including combat drones, unmanned surface vessels and laser air defense. DAPA also laid out the purchase of 20 additional F-35A stealth fighters. On exports, the agency described region-tailored packages: US naval shipbuilding and North American ground systems, localization and technology transfer in the Middle East, NATO cooperation in Europe, and tank and submarine bids in Peru, citing Croatia's Chunmoo order as a new European market. Force improvement spending is about 19.97 trillion won in 2026 with 22.72 trillion won proposed for 2027. Lawmakers also pressed DAPA over an internal evaluation bribery case and alleged pressure on small suppliers.

Defense Acquisition Program Administration Minister Lee Yong-cheol told the National Assembly audit on October 13, 2026 that a potential Hanwha takeover of Korea Aerospace Industries has both advantages and drawbacks and that it would be premature to set a direction, adding that any move would be closely examined in terms of national security and the national interest. Hanwha Group holds 15.89 percent of KAI after the Korea Fair Trade Commission cleared its stake increase in late August, while the Export-Import Bank of Korea remains the largest shareholder with 26.41 percent. Under the Defense Acquisition Program Act a change of control at a designated defense contractor requires approval from the Minister of Trade, Industry and Energy, and KAI's labor union marched on the National Assembly on October 14 in opposition.

Hanwha Defense USA displayed a model of the M38 medium unmanned surface vessel, developed with US autonomy firm Magnet Defense, at the AUSA Annual Meeting in Washington on October 12, 2026, after the parent vessel arrived at National Harbor following sea trials. The 38-metre M38 is the primary test platform and the 48-metre M48, for which steel has been cut, is the planned production standard; Magnet Defense claims a demonstrated range of 17,000 nautical miles including a Pacific crossing in up to Sea State 9. Hanwha builds the vessel and integrates weapons while Magnet handles navigation autonomy. Alongside the vessel Hanwha showed four containerized launcher concepts: a 20-foot Chunmoo container with two pods for CGR-080, CTM-MR, CTM-160 anti-ship ballistic, CTM-290 or CTM-X rounds; a 20-foot compact K-VLS container with four cells for K-SAAM; a 40-foot K-VLS I container for K-ASROC, SSM-700K cruise missiles and K-SAAM; and a 40-foot K-VLS II container for L-SAM and larger missiles. The program targets the US Navy's medium USV market and export customers; no contract was announced.

Korea Aerospace Industries said on October 8, 2026 that it is the only Korean exhibitor at the Marrakech Air Show (October 7 to 10), where it set aside a dedicated FA-50 display aimed at the Royal Moroccan Air Force's advanced trainer and light combat aircraft requirement to replace ageing Alpha Jets and Northrop F-5s. KAI signed a memorandum of understanding with Moroccan maintenance providers Maintenance Aero Maroc and Sabca Maroc to explore industrial cooperation around a T-50 and FA-50 offer. Morocco's minister delegate for national defence administration, Abdellatif Loudiyi, and senior air force officers visited the KAI stand. Leonardo's M-346 is the main competitor. KAI positions Morocco as its gateway to African markets; no contract has been awarded.

South Korea's Nuri launch vehicle lifted off from the Naro Space Center in Goheung on October 7, 2026 on its fifth flight, carrying a record 15 satellites: five KAIST NEONSAT cluster satellites (units 2 to 6) as the main payload and ten cubesats. Hanwha Aerospace, the designated system integrator under the government's launch-vehicle technology transfer program, took a larger share of assembly and launch operations than on previous flights, a step toward the company leading future Nuri missions and the next-generation launcher. One satellite reportedly failed to deploy. Bloomberg framed the expanded Hanwha role as a sign of growing reliance on private industry for Korea's space ambitions.

Hanwha and Estonia's Milrem Robotics announced on October 7, 2026 at the Land Forces exposition in Perth that Hanwha has acquired two THeMIS unmanned ground vehicles, one for research and development in South Korea and one for Hanwha Defence Australia to test with the Australian Army's 1st Armoured Regiment. The memorandum sets a framework for Hanwha Defence Australia to market, locally produce, sell and sustain THeMIS in Australia and the wider region, with an Australian supply chain and maintenance capability at Hanwha's armoured vehicle centre in Geelong and technology transfer from Milrem. It also includes an option to integrate Milrem's Intelligent Function Integration Kit onto crewed Hanwha platforms such as the AS9 Huntsman and AS21 Redback, adding autonomous navigation and mission execution. The deal builds on the Romania-focused Hanwha-Milrem partnership announced in May 2026.

Hanwha Ocean has replaced its earlier Ocean 1400 proposal for the Philippine Navy's submarine program with the Jangbogo-III PN, a derivative of the KSS-III Dosan Ahn Changho class built for the Republic of Korea Navy, the Manila Times reported on October 2, 2026. The boat displaces about 2,800 tons surfaced, is 77 metres long with a 9.7-metre beam, and combines lithium-ion batteries with air-independent propulsion. Korean reports on October 11 said the offer covers two submarines plus crew and technician training, shore infrastructure and training facilities, and integrated logistics support. The program is budgeted at roughly 80 to 110 billion pesos. Hanwha competes against HD Hyundai Heavy Industries, Naval Group's Scorpene, Navantia's S-80 Plus and Fincantieri; no supplier has been selected.

Malaysian Defence Minister Mohamed Khaled Nordin said in October 2026 that the Royal Malaysian Air Force expects to receive its first FA-50M light combat aircraft this month or next, with no delays reported by Korea Aerospace Industries. The RMAF chief had earlier set the first two aircraft for October 2026, with the remaining jets of the 18-aircraft order arriving in stages through March 2028, later than KAI's original mid-2027 schedule. The jets will be based with No. 15 Squadron at Kuantan Air Base, whose upgraded facilities were reported more than 90 percent complete in June; the first two Malaysian pilots finish conversion training in October and four more in December. Malaysia holds an option for 18 additional FA-50Ms. As of October 20 no arrival ceremony had been reported.

October 2026 brings several tests of Hanwha's push for management participation at Korea Aerospace Industries, where it holds 15.89 percent as the second-largest shareholder. The National Assembly's annual audit is expected to take up the plan, with Hanwha Group Vice Chairman Kim Dong-kwan and KAI President Kim Jong-chul named as witnesses. KAI's labor union, which opposes Hanwha's involvement over information access and monopoly concerns, plans a march to the National Assembly in Seoul on October 14. The same month decides the KF-21 long-range air-to-air missile program, where Hanwha Aerospace competes against a Hyundai Rotem and LIG D&A consortium, with evaluation on October 6 to 8 and a preferred bidder on October 12. Hanwha argues that combining its engines, radars, and guided weapons with KAI's aircraft integration would raise Korea's aerospace competitiveness.

Hanwha Aerospace said on September 30, 2026 that it has started final assembly of a reusable-technology demonstrator developed with the Korea Aerospace Research Institute and domestic suppliers including Bitzro Nextec and Hanyang Engineering. The 12.2-metre, 1.5-metre-diameter vehicle uses a single throttleable dual-combustion-cycle turbopump engine and is to fly in 2028: a vertical take-off, a climb to about 500 metres in roughly 90 seconds, and a vertical landing at a designated pad, verifying thrust control, attitude control, and guidance for first-stage reuse on the next-generation launch vehicle planned for the 2030s. Hyundai Rotem exhibited hypersonic propulsion test facilities and space-environment simulation chambers at Aerotech 2026, which runs September 30 to October 2 at the Changwon Convention Center with 179 companies in 317 booths.

The Defense Acquisition Program Administration and India's Ministry of Defence held the 10th Korea–India Joint Committee on Defense Industry and Logistics Cooperation in New Delhi on September 29, 2026, co-chaired by DAPA Vice Minister Kim Il-dong and Additional Secretary for Defence Production Dinesh Mahur. The meeting followed the April 2026 summit commitment to expand defense cooperation. The two sides discussed stable implementation and long-term operation and maintenance of key programs, including the Biho Complex hybrid air-defense system still under negotiation and the K9 Vajra howitzers already in Indian Army service, agreed to link logistics systems more closely, and explored joint research and development topics. Larsen & Toubro and BEML took part in the industry sessions, which covered maintenance and repair supply chains for land systems and expansion into aviation and naval electronics. No new contracts or values were disclosed.

The Defense Acquisition Program Administration presented its KF-21 S1000D electronic technical-manual work at an international S1000D forum on September 28, 2026 and said it will apply the international-standard approach to other export weapon systems, including the K2PL tank for Poland and the K9 howitzer. S1000D-compliant manuals let foreign operators integrate Korean equipment into their own logistics and training systems, which DAPA describes as a way to support follow-on logistics and sustainment revenue on export programs. The KF-21 was the first Korean weapon system to be documented fully to the standard.