South Korea's government plans to establish a 50 billion won venture fund for startups developing security-critical technologies, including AI, semiconductors, space, and defense applications, Seoul Economic Daily reported on September 5, 2026. The Ministry of SMEs and Startups and the Defense Acquisition Program Administration will each contribute 25 billion won, with the fund to grow beyond 200 billion won by 2030. Modeled on In-Q-Tel, the CIA's venture arm, the new institution will sit under Korea Venture Investment Corp. and invest roughly 2-3 billion won per company in early-stage firms with strong technology but unproven commercialization, prioritizing strategic value over financial return. Launch is targeted for mid-2027 at the earliest, pending National Assembly passage of a special act this year. The plan follows the February 2026 MSS-DAPA pledge to nurture 100 defense-participating startups and 30 "defense venture 100-billion-won companies" by 2030.
DAPA released a request for proposals on August 21, 2026 for a 14-month, roughly 900 million won ($650,000) conceptual study of a South Korean sixth-generation fighter. The study will examine two parallel stealth configurations — one tailless and one with alternative control surfaces — for a single-seat aircraft with low observability across L, S, and X bands, twin adaptive-cycle engines, and an internal weapons bay. Fielding is not expected before 2040 and no full program launch decision has been made, but the study marks the formal start of thinking beyond the KF-21 Boramae just weeks after that program completed system development. Analysts see it as a signal that Korea intends to stay in the top tier of fighter developers alongside the US, Europe, and Japan.
President Lee Jae-myung directed the Ministry of National Defense on August 18, 2026 to speed up development of the Jangbogo-N nuclear-powered attack submarine, days after DAPA established dedicated program organizations on August 12 using the KSS-III development team. In parallel, Seoul introduced draft legislation to provide the legal and institutional framework for building indigenous nuclear-powered submarines, including fuel supply and safety oversight. The moves follow DAPA's pledge in its second-half policy report to finalize the Jangbogo-N business plan within 2026, with a first boat targeted for the mid-2030s. The President also reaffirmed plans to complete the wartime operational control transfer during his term.
DAPA delivered the first vessel of the upgraded Geomdoksuri-B (PKX-B Batch-II) fast patrol ship program to the Navy at a ceremony at a Busan shipyard on August 14. The ship carries guided rockets and anti-jamming systems and will complete operational evaluation before deploying near the Northern Limit Line, the de facto maritime border with North Korea in the Yellow Sea. Three follow-on vessels are scheduled for phased delivery by the end of 2026, completing the four-ship batch ordered for delivery between August and November. The Batch-II boats are the successor to the original Chamsuri-class replacements and add hardened navigation and communications against GPS jamming — a direct response to repeated North Korean interference along the western sea border.
Korean defense export orders totaled roughly $8 billion through the end of July 2026 — about half the pace of the prior year, against full-year totals of $13.5 billion in 2023, $9.6 billion in 2024, and $15.4 billion in 2025. Backlogs at three of the Big Four (Hyundai Rotem, KAI, LIG D&A) have started to contract, with only Hanwha Aerospace still growing. Analysts tie the slowdown to buyer-nation "domestic-first" procurement policies, deeper localization and technology-transfer demands, and slipping timelines on Middle East mega-packages. A parallel critique published the same week argues Korea still lacks an export control tower with real authority: the Defense Industry Development Act names the DAPA commissioner as export-support coordinator, but the role requires Ministry of National Defense sign-off and can only "request" action from other agencies, leaving decision rights scattered. DAPA's export-support budget rose 53.8% to 391.1 billion won this year, yet only 2.5 billion won (0.6%) went to workforce development, and just 135 of 17,027 military alternative-service placements went to the defense industry.
The Defense Acquisition Program Administration approved the basic strategy for the K2 tank performance-improvement program at the 177th Defense Project Promotion Committee on August 11, 2026. The program will spend about 3.448 trillion won (~$2.4 billion) from 2028 to 2046 to fit every K2 in Republic of Korea Army service with a hard-kill active protection system, drone and improvised-explosive-device jammers, and a remote-controlled weapon station, with the first upgraded tanks entering service from 2033. DAPA framed the package as a response to lessons from the Russia-Ukraine war and North Korean drone development, shifting tank survivability from passive armor toward detecting and defeating top-attack missiles, FPV drones, and loitering munitions. The APS, jammers, and weapon stations are expected to be domestically produced, giving Korean suppliers a reference configuration that Hyundai Rotem can also offer to K2 export customers such as Poland.
DAPA Commissioner Lee Yong-chul presented the agency's second-half 2026 policy report to President Lee Jae-myung at the Blue House state guest house on August 5, alongside the Ministry of National Defense and Military Manpower Administration, under the theme of an "irreplaceable Republic of Korea." DAPA set five core tasks: securing key forces for self-reliant defense, innovating toward rapid and open acquisition of advanced capabilities, nurturing future security innovation firms, building a co-prosperous defense industrial base, and strengthening international cooperation and export support for K-defense. Concrete commitments include establishing the nuclear-powered submarine (Jangbogo-N) business plan within 2026 using the KSS-III development organization, moving unmanned systems and counter-drone system acquisition into full swing, and fielding three-axis capabilities such as the KF-21 and the long-range artillery interceptor (LAMD) on schedule.
The Defense Acquisition Program Administration officially signed the detailed design and lead-ship construction contract for the Korean Destroyer Next Generation (KDDX) program with Hanwha Ocean on July 31, 2026. The lead-ship contract is worth KRW 837.9 billion (~$587 million) within a roughly KRW 7.8 trillion ($5.4 billion) six-ship program. The ~7,000-ton KDDX will be South Korea's first destroyer with a fully domestic combat system — including indigenous combat management, multifunction radar, and sonar — with the first vessel due for delivery to the ROK Navy by 2032. The signing formalizes Hanwha Ocean's June evaluation win over HD Hyundai Heavy Industries and moves the long-delayed program into the construction phase.
Korea Aerospace Industries and the Defense Acquisition Program Administration held the KF-21/IF-X System Development Completion Ceremony at KAI headquarters in Sacheon, South Gyeongsang, on July 29, 2026, formally closing the roughly ten-year development program launched in 2015. About 300 people attended, including DAPA Minister Lee Yong-chul, Ministry of National Defense, Agency for Defense Development and ROK Air Force officials, representatives of some 500 domestic partner companies, defense ministry and PTDI officials from co-development partner Indonesia, and technical partner Lockheed Martin. The program completed basic and detailed design, prototype manufacturing, ground testing and flight testing, logging more than 1,600 flight trials and verifying over 13,000 test conditions without a single accident, and passed combat suitability certification in May 2026 followed by initial type certification. The 8.8 trillion won ($6.04 billion) effort, begun to replace ageing F-4 and F-5 fleets, now moves into full-rate production: the first mass-production aircraft is scheduled for delivery to the ROK Air Force around September 2026, with an initial batch of 40 air-to-air-capable jets by 2028 and a further 80 enhanced aircraft by 2032 toward a 120-aircraft target.
South Korea unveiled a strategy on July 23 to accelerate development and domestic production of military semiconductors, jointly presented by the Ministry of Science and ICT, the Ministry of Trade, Industry and Energy, and the Defense Acquisition Program Administration (DAPA) at the 11th meeting of science and technology ministers. The plan uses predictable government demand from weapons acquisition programs to drive chip development: military semiconductors developed under the program will undergo government-led reliability testing and operational demonstrations, and once they meet required standards, their use in applicable weapons systems will be made mandatory. The government will leverage existing public and commercial fabrication facilities as an initial production base and plans to establish a dedicated public-private semiconductor fab for defense-chip R&D and mass production. South Korea currently imports roughly 99% of the semiconductors used in its weapons systems. The strategy builds on the earlier plan to raise domestic defense-chip production to 50% by 2029.
South Korea's KF-21 Boramae supersonic fighter has formally completed its system development phase, closing out roughly ten years of prototype manufacturing and flight testing that began in 2015. The Defense Acquisition Program Administration scheduled a "KF-21/IF-X System Development Completion Ceremony" for July 29 at Korea Aerospace Industries in Sacheon, Gyeongnam, with Ministry of National Defense, Joint Chiefs of Staff, and Air Force officials attending alongside Indonesian defense and embassy representatives from the co-development partner. The milestone moves the program into full-rate production and export marketing: the ROK Air Force plans to induct roughly 120 aircraft by 2032, with about 10 this year, 30 by 2028, 40 by 2030, and 40 by 2032. Block-II upgrades covering engine, avionics, and weapons integration are targeted for completion by 2028. The first mass-production aircraft rolled out on March 25, 2026, and Air Force deliveries of air-to-air-capable Block-I jets begin in the second half of 2026.
Korea's Ministry of SMEs and Startups opened the second round of its "Everyone's Challenge – Defense" open-innovation program, recruiting about 50 startups to team with military and defense demand companies, with applications running July 16 to August 4. Each selected project receives up to 100 million won for technology validation and prototyping, with follow-on support of up to 200 million won in startup-growth R&D and up to 600 million won in public-private commercialization funding. The first round in March backed 10 companies; the program is part of Korea's plan to grow 100 defense startups by 2030.
Korea's record defense export backlog is straining production capacity, with DAPA acknowledging temporary bottlenecks on export lines including the K9 self-propelled howitzer and K239 Chunmoo MLRS, aggravated by the country's 52-hour workweek and overtime restrictions. Manufacturers warn that the labor-hour cap complicates efforts to accelerate deliveries against a rapidly growing order book, projected at more than $27 billion in exports for 2026. The report is a caution flag on delivery timelines rather than a contract event.
The Defense Acquisition Program Administration completed price bidding on June 24 and will select the winner of Korea's first multipurpose unmanned ground vehicle program on July 24. Hanwha Aerospace's Arion-SMET and Hyundai Rotem's HR-Sherpa — both battery-powered 6×6 platforms with 100+ km range — are competing for the ~50 billion won initial contract. The program marks a milestone in Seoul's push to replace labor-intensive forces with AI, robotics, and autonomous systems.
DAPA officially confirmed Hanwha Ocean as the preferred bidder for the KRW 7.8 trillion ($5.1B) KDDX next-generation destroyer program on July 2, after rejecting an objection filed by rival HD Hyundai Heavy Industries. Hanwha Ocean edged out HD Hyundai by 0.58 points after a 1.2-point security penalty was applied to HD Hyundai for employees convicted of leaking KDDX research materials. DAPA aims to finalize negotiations and sign the contract for the six-ship program of 6,000-ton fully indigenous destroyers.
|Korea Herald / Korea Times / Seoul Economic Daily
The Defense Acquisition Program Administration held the two-day 2026 Defense Offset Industry Cooperation Event on July 2–3 at the War Memorial of Korea in Seoul, jointly organized with the Korea Research Institute for Defense Technology Planning and Advancement (KRIT). The event aimed to help smaller Korean defense companies secure long-term positions in the supply chains of major global contractors — moving beyond complete weapons system exports toward deeper integration into international defense industrial networks. The initiative reflects Korea's strategy to expand its defense export ecosystem beyond the Big Four firms.
Amendments to the Defense Project Act and National Defense Science and Technology Innovation Promotion Act took effect on July 1, streamlining Korea's defense export process. Key changes include extending export license exemptions for maintenance spare parts from 2 to 5 years, shortening DAPA's technology transfer contract approval period from 2 months to 1 month, and simplifying documentation requirements. The reforms aim to support Korea's rapidly growing defense export pipeline, projected to reach $37.7 billion in 2026.
DAPA granted initial type certification to the KF-21 Boramae on June 15, described as the government's "final official recognition" of the aircraft's flight safety. The fighter met all 745 inspection requirements across 14 airworthiness categories including aircraft structure, weapons integration, and electronic systems. With formal system development concluding in June 2026, KAI is on track to deliver the first production KF-21 to the ROKAF in September 2026.
DAPA selected Hanwha Ocean as the preferred bidder for the KDDX next-generation destroyer program on June 11, 2026. The six-ship program covers 6,000–6,500-ton surface combatants valued at KRW 7.8 trillion ($5.1B) for air defense, ASW, strike, and escort. Hanwha Ocean scored 93.9542 vs HD Hyundai Heavy Industries' 93.3675. HD Hyundai led on technical score but received a 1.2-point security-related deduction. DAPA aims to complete negotiations and sign the contract in July 2026. This will be Korea's first fully indigenous destroyer.
DAPA announced the successful domestic production of the laser oscillator used in the Cheongwang Block-I directed energy air defense system, raising the domestic component ratio from 76% to 90% by value. The new oscillator delivers over 50% improvement in output power, cutting drone intercept time from 2–4 seconds to 1–2 seconds. South Korea joins the US, Israel, China, and Germany as the only nations known to independently produce this strategically sensitive component.
The Korea Institute for Defense Analyses (KIDA) and the National Information Society Agency (NIA) signed an MOU to deepen cooperation between the public and defense sectors on AI strategy. KIDA plans to expand its Defense AI Policy Research Office into a Defense AI Policy Center overseeing defense AI strategy, data planning, and verification. The initiative aligns with South Korea's goal of becoming one of the world's top three AI powers ("AI G3") and supports the broader Defense Innovation 4.0 program.
The Defense Project Promotion Committee approved the purchase of Standard Missile-6 (SM-6) long-range ship-to-air missiles via U.S. FMS for 530 billion won (~$351.5M). The SM-6s will equip three King Jeongjo the Great-class (KDX-III Batch-II) Aegis destroyers through 2034. SM-6 has a 460km range and 36km altitude capability. The budget was reduced from an original 770 billion won plan with a reduced missile quantity.
DAPA launched a 17 billion won ($11.27M) project to develop drones that physically collide with enemy suicide drones using infrared search-and-track for detection and a hard-kill method for interception. If the first interceptor misses, a follow-up drone engages. The 2-year R&D program is under the Defense Rapid Acquisition Technology Research Institute.
The U.S. State Department approved two Foreign Military Sales packages for South Korea totaling $4.2 billion: 24 MH-60R Seahawk multi-mission helicopters (~$3B) from Lockheed Martin and an AH-64E Apache upgrade program (~$1.2B) including 8 AN/APG-78 fire-control radars. The packages require Congressional approval and represent the largest single U.S. arms sale to South Korea in recent years.
The US State Department approved two Foreign Military Sales packages totaling $4.2 billion for South Korea: 24 MH-60R Seahawk multi-mission helicopters ($3B) to triple the ROK Navy's anti-submarine helicopter fleet from 12 to 36 units, and a $1.2B modernization package for the ROK Army's AH-64E Apache attack helicopter fleet. Both deals require congressional approval before finalization.
Bipartisan lawmakers Rep. Kim Byung-joo (Democratic Party) and Rep. Yu Yong-won (People Power Party) agreed on the need to establish a dedicated fund for defense exports, saying "financing competitiveness" is essential to expanding K-defense exports. The push comes as existing export credit and insurance mechanisms approach capacity limits amid a projected $37+ billion export year. The fund would complement the existing K-SURE and KEXIM frameworks with dedicated defense-sector financing tools.
DAPA and NATO held their second defense industry consultative meeting at the Government Complex Gwacheon, co-led by DAPA's international cooperation chief and NATO Assistant Secretary-General Tarja Jaakkola. The sides discussed expanding cooperation in interoperability, ammunition production (particularly 155mm shells to replenish European stockpiles), and space projects. NATO requested South Korea's participation in multinational alliance projects, reflecting a shift from viewing Seoul as an emergency procurement source to a long-term defense supply partner.
DAPA announced that the KF-21 Boramae has met all criteria of its final combat suitability evaluation, clearing the Block I air-to-air variant for operational deployment after roughly 1,600 test flights and 13,000+ test conditions including aerial refueling and live weapons release. System development is set to conclude in June 2026, with the first mass-produced aircraft scheduled for delivery to the ROKAF in the second half of the year. This makes the KF-21 South Korea's first indigenous combat aircraft to achieve full combat approval.
South Korea's Defense Ministry issued a partial revision to the enforcement decree of the Defense Science and Technology Innovation Promotion Act, cutting approval times for state-owned defense R&D technology transfers from up to two months to 30 days. The revision also allows certain repair parts exports to proceed without separate DAPA approval, and expands self-approval authority for technology-holding institutions when domestic firms manufacture repair parts for previously approved defense exports. The changes respond to surging demand for follow-up maintenance and parts supply as defense exports reached $15.44 billion in 2025 (up 62.5% year-over-year), with $37+ billion projected for 2026.
Despite strong Korean defense industry presence, Malaysia's DSA 2026 exhibition (April 20-23) yielded fewer procurement contracts than previous editions. However, the event still produced notable deals including LIG D&A's landmark $94M K-SAAM Haegung export contract and contracts with HD Hyundai Heavy Industries. Boustead signed agreements with Korean and European firms. Lunas inked seven MOUs valued at RM300 million involving Hyundai Heavy Industries among others. Analysts noted that Southeast Asian procurement cycles are lengthening due to tighter defense budgets, though demand for affordable, rapidly deployable Korean systems remains strong.
A total of 23 Korean defense companies participated in DSA 2026 in Kuala Lumpur (April 20-23), including major systems integrators LIG Defense & Aerospace and HD Hyundai Heavy Industries alongside SMEs and regionally based firms. The Korea Pavilion, operated by DAPA, KRIT, and KDIA, showcased hull-mounted sonars, underwater drones, AI-based command decision support systems, and other advanced defense technologies targeting the Southeast Asian market. LIG D&A's $94M Haegung missile contract with Malaysia highlighted the event.
KADEX 2026, the Korea Army International Defense Industry Exhibition, will be held October 6-10 at Gyeryongdae military headquarters in Chungcheongnam-do. Themed "Physical AI, Dominate the Battlefield," the event will feature over 450 companies across 2,032 booths — the largest scale in its history — with VIP delegations from 50 countries. Hanwha, Hyundai Rotem, KAI, LIG Nex1, and Poongsan have confirmed participation. Exhibition space is organized by battlefield function (Intelligence & C4I, Maneuver, Firepower, Protection & Anti-Drone, Space & Aerospace, Power Support) rather than by company. A dedicated "KADEX LAB Defense Startup Innovation Pavilion" will spotlight AI, robotics, and autonomous systems startups.
DAPA is operating an integrated Korea Pavilion at Defense Services Asia (DSA) 2026, held April 20-23 at MITEC in Kuala Lumpur. Eight Korean defense firms are showcasing hull-mounted sonars for minesweepers, underwater drones, and AI-based command decision support systems. DSA 2026, Asia's largest defense exhibition, draws approximately 1,400 defense companies from around the world and officials from more than 60 countries. The pavilion includes buyer-matching consultation sessions to generate tangible export outcomes in Southeast Asia.
South Korea is establishing a national policy framework to build anti-drone defense capabilities as unmanned aerial threats become increasingly significant in modern warfare. DAPA plans to deploy the Low Altitude Missile Defense (LAMD) system prototype by 2029, two years ahead of schedule, to counter North Korean long-range artillery targeting the Seoul metropolitan area. The strategy combines radar, tactical communications, launchers, and interceptors designed to neutralize simultaneous low-altitude attacks, complementing existing Patriot and THAAD layers.
DAPA approved accelerated deployment of the Low-Altitude Missile Defense (LAMD) system — dubbed the "Korean Iron Dome" — to 2029, two years ahead of the original 2031 schedule. The system is designed to intercept North Korean artillery and rocket attacks targeting the Seoul metropolitan area. Government will invest 842 billion won ($558M) in development.
DAPA opened bidding for the KDDX next-generation destroyer program, distributing RFPs to HD Hyundai Heavy Industries and Hanwha Ocean on March 26, 2026. The program covers six 6,000-ton class destroyers at ~KRW 7.04 trillion ($4.9B), with contractor selection targeted for July 2026. This will be Korea's first fully indigenous destroyer.
South Korea's defense exports hit $15.4 billion in 2025, and the Export-Import Bank of Korea projects exports could exceed $27 billion in 2026. The Big Four defense firms (Hanwha Aerospace, Hyundai Rotem, KAI, LIG Nex1) are projected to reach 50 trillion won ($37.4B) combined revenue. Korea targets top 4 global defense exporter status.
DAPA Administrator Lee Yong-cheol pledged a sweeping overhaul of the defense procurement agency, pushing for faster decision-making, stronger export execution, and greater technological self-reliance. Lee described the current moment as a last chance to reform an organization long criticized for inefficiency and delay, as South Korea targets top-4 global defense exporter status.
UAE's EDGE Group and South Korea's DAPA signed a landmark $35 billion defense industry cooperation framework covering integrated air defense, advanced aircraft, and maritime capabilities. The agreement establishes joint design, development, training and sustainment, moving beyond traditional buyer-seller relationships.
South Korea's defense exports reached $15.4 billion (KRW 23.2 trillion) in 2025, up 60.4% year-on-year, driven by massive European and Middle Eastern contracts. The Big Four defense firms are projected to hit KRW 50 trillion combined revenue in 2026.
LIG Nex1 won a KRW 1.56 trillion (~$1.1B) DAPA contract for the EW Block I electronic warfare aircraft system, enhancing the ROKAF's electronic warfare capabilities through 2030.
South Korea's defense exports surpassed $20 billion in 2024, driven by continued European demand and new contracts in the Middle East. The country has solidified its position as a top-5 global arms exporter.
The South Korean government has announced plans to become the world's fourth-largest defense exporter by 2027, backed by continued strong demand for Korean weapons systems across Europe, the Middle East, and Southeast Asia.
South Korea's defense exports reached a record $17.3 billion in 2022, driven primarily by the massive Polish procurement of K2 tanks, K9 howitzers, FA-50 fighters, and Chunmoo MLRS. The figure represents a dramatic increase from the previous year.