The Rise of South Korea’s Military Power and K-Defense Industry in 2025

In this explainer, Asia Pacific Analyst Soojin explores how South Korea’s defense industry is evolving into a strategic global sector where rising exports, domestic R&D, and geopolitical uncertainty together drive both opportunity and risk. 

Image: Yonhap News 

Executive Summary:   

• South Korea has emerged as a global defense powerhouse, ranking 5th in military strength and 8th in arms exports. This status is driven by strategic initiatives under Defense Reform 2.0, including investments in drones, satellites, cyber warfare, and precision strike capabilities. 

• “K-Defense” exports are experiencing historic growth, with major systems like the K9 self-propelled howitzer, K2 tank, and FA-50 aircraft gaining traction worldwide.  

• Despite geopolitical risks including the U.S.–South Korea alliance uncertainties and North Korea’s provocations, South Korea’s advanced technology, reliable delivery, and fast production capacity make it a sustainable and attractive defense partner in an increasingly unstable global security environment. 

Amid rising tensions in the Taiwan Strait, intensified U.S.-China military rivalry in the South China Sea, and continued missile provocations by North Korea, demand for defense capabilities is rapidly increasing worldwide. In this context, the defense industry is being redefined not as a short-term cyclical sector but as a long-term strategic industry. 

Within this shifting landscape, South Korea’s defense export sector is gaining significant global attention, having firmly positioned itself as the world’s 5th strongest military power and the 8th largest arms exporter. 

In terms of military strength, the 2025 Global Firepower (GFP) rankings place South Korea 5th globally, following the United States, Russia, China, and India. GFP evaluates military power including troop size, defense spending, military equipment volume, industrial capacity, technological advancement, geographic positioning, and economic strength. 

Regarding defense exports, South Korea is steadily strengthening its position as a trusted global supplier, leveraging its advanced weapons development capabilities, rapid production, and strategic flexibility to support long-term growth potential in the global defense market. 

In particular, using Defense Reform 2.0, South Korea has been working to secure advanced military capabilities and achieve technological self-reliance. It has focused on building a wide range of core competencies, including drones, reconnaissance satellites, cyber warfare response systems, precision strike capabilities, and long-range missile defense systems. In parallel, it is accelerating R&D investment in key areas essential to modern warfare. 

As a result, South Korea’s defense industry today has evolved beyond a traditional manufacturing base and is emerging as a global industrial power with strategic, economic, and technological influence. This demonstrates that South Korea’s defense sector is no longer merely a tool for national security but is now being recognized as a globally significant strategic industry. 

What is particularly noteworthy is that this strategy has translated into tangible export outcomes for Korea’s defense industry—commonly referred to as “K-Defense.” In 2022, South Korea recorded an all-time high in defense exports, reaching approximately USD 17 billion, making it the world’s 9th largest arms exporter at the time. As of 2025, this upward trend continues, with South Korea now ranked as the 8th largest defense exporter globally. Major export items include the K9 self-propelled howitzer(K9), the K2 main battle tank(K2), and the FA-50 light combat aircraft(FA-50). Among them, the K9, developed and produced by Hanwha Aerospace, commands over 50% of the global self-propelled artillery market share. 

Shifts in the global security environment have also driven a renewed emphasis on defense spending across many nations. This momentum has been reinforced by NATO’s agreement to raise member states’ defense spending. In response, the Korean stock market saw a significant rally in major defense stocks, including Hanwha Aerospace and LIG Nex1, reflecting increased investor confidence in the sector. 

South Korea’s defense industry presents several key opportunities. First, the government's expanded R&D investment aimed at achieving technological self-reliance and developing strategic weapon systems signals the potential for stronger public–private partnerships and supports the sustainability of long-term investments. 

Second, ongoing global security instability such as the U.S.–China rivalry, the Russia–Ukraine war, and tensions in the Middle East is fueling increased demand for reliable arms suppliers. In this context, South Korea is receiving high marks for its on-time delivery, rapid production capacity, and strong technological reliability, all of which reinforce its position as a sustainable and attractive investment destination in the global defense sector. 

However, alongside these business opportunities, it is equally important to acknowledge the geopolitical risks on the Korean Peninsula. Recently, former President Trump’s calls for a significant increase in South Korea’s defense cost-sharing have reignited concerns over a potential realignment in the U.S.–South Korea alliance. Should the alliance weaken and North Korea respond with heightened missile provocations or military threats, foreign investors may factor in the broader regional risk landscape when making strategic decisions. 

That said, such risks remain subject to change, depending on the outcome of the next U.S. presidential election and potential shifts in Washington’s alliance policy. As such, ongoing monitoring and scenario-based risk assessment will be essential in evaluating the stability and investment outlook for Korea’s defense industry. 

Nevertheless, as the world’s 5th strongest military power and the 8th largest arms exporter, South Korea continues to solidify its position as a reliable global defense supplier, backed by its strengths in advanced weapons development, timely delivery, and strategic flexibility. 

If you would like to learn more about the implications for your business, please  contact us at ceo@northstar-insights.com