K-Defense Faces "Buy Local" Headwinds as Export Clients Demand Domestic Production
export local production headwinds capacity financing backlog risk
South Korea's defense export pipeline faces growing "buy local" pressure from client nations, with three major risks to the projected $37B+ 2026 export target: demand for local production exceeding Korean firms' capacity to establish overseas facilities, buyer nations developing indigenous alternatives after technology transfer, and financing bottlenecks as export credit mechanisms approach their limits. The backlog-to-execution conversion rate is becoming the key metric, with analysts warning that order books alone do not guarantee revenue recognition.