World’s Top 100 Defense Companies See 5.9% Revenue Increase… Korean Companies Stand Out
(Seoul = Yonhap News) Reporter Cha Dae-woon = In 2024, amid the simultaneous Russia-Ukraine and Israel-Gaza wars, the demand for weapons has surged, especially in Europe, leading to record-high sales for the world’s top 100 defense companies.
Led by Hanwha Group, four South Korean companies continue to be listed among the “World’s Top 100 Defense Companies,” with South Korea ranking 10th in national sales, just after the traditional defense powerhouse, Germany.
The Stockholm International Peace Research Institute (SIPRI) reported on December 1st that the total sales of the world’s top 100 defense companies reached $679 billion in 2024, reflecting a 5.9% increase from the previous year.
The report stated, “Global defense sales in 2024 sharply increased due to the wars in Ukraine and Gaza, growth in geopolitical tensions worldwide and regionally, and escalating military spending.” It also noted that, for the first time since 2018, all top 5 defense companies saw an increase in arms sales.
The “K-Defense Big 4,” Hanwha Group, Hyundai Rotem, LIG Nex1, and Korea Aerospace Industries (KAI), were included in the top 100 defense companies for the second consecutive year in 2023.
While the total sales of the top 100 companies increased by 5.9%, the combined sales of these four South Korean defense companies reached $14.1 billion, a rise of about 31%, marking a notable growth.
The share of sales contributed by South Korea’s four defense companies to the total sales of the world’s top 100 corporations increased from 1.7% in 2023 to 2.1% in 2024.
On a national sales ranking basis, South Korea ranked 10th, following the United States (49%), China (13%), the United Kingdom (7.7%), Russia (4.6%), France (3.8%), multinational companies in Europe (3.3%), Italy (2.5%), Israel (2.4%), and Germany (2.2%).
Since 2023, when South Korea began a major export of armored forces such as the K2 tank to Poland, it has been competing with Germany, a traditional European defense power, for the 9th to 10th place positions in SIPRI’s annual survey.
Individually, Hanwha Group climbed three spots from 24th in 2023 to 21st in 2024 and is on the verge of entering the top 20 global defense companies. LIG Nex1 (73rd to 60th) and Hyundai Rotem (84th to 80th) also gained in ranking, although KAI’s sales slightly declined, dropping it from 54th to 70th place.
SIPRI noted that the weapon sales by the four South Korean companies included in the top 100 increased by 31% in 2024, continuing a strong upward trend from the previous year. Hanwha Group, for example, saw a 42% increase in arms sales to $8 billion, attributed to more exports and domestic deliveries of self-propelled guns, multiple rocket launchers, and 120mm self-propelled mortars.
Since the outbreak of the Russia-Ukraine war, Eastern European countries, especially those bordering Russia like Poland, have been hastily expanding their military forces amidst a growing sense of security crisis in Europe.
However, major defense companies in the U.S. and Europe, which traditionally supplied main weapon systems to European countries, faced difficulties in timely product deliveries due to the sudden spike in demand.
In this context, South Korea is increasingly being recognized as a new supplier of weapon systems in the international defense market.
Despite a general trend of reducing conventional weapons in the West following the Cold War, South Korea’s unique security environment, owing to the North-South confrontation, has driven it to maintain a large military force and produce a systematic production system covering a wide range of arms from shells, tanks, and self-propelled guns to fighter jets and warships.
Although this was not South Korea’s intention, it ultimately resulted in what is considered the greatest strength of K-Defense: the ability to supply competitive, high-performance weapons swiftly on a global scale.
Following the Russia-Ukraine war, South Korean defense companies such as Hanwha Group, Hyundai Rotem, and KAI have exported K-9 self-propelled guns, K2 tanks, FA-50 light attack aircraft, and other military equipment primarily to Eastern Europe, including Poland, Romania, and Estonia.
SIPRI’s report underscores that while global demand rises, defense companies, particularly in the U.S. and Europe, are experiencing delivery disruptions due to production problems.
Despite the fact that most countries saw increased sales from defense companies in 2024, Chinese companies’ aggregate sales fell by 10% compared to the previous year. The share of Chinese companies in the total sales of the world’s top 100 defense companies also decreased from 16% in 2023 to 13% in 2024.
Nan Tian, head of the Arms and Military Expenditure Programme at SIPRI, cited various corruption allegations in China’s military procurement process, leading to delays or cancellations of major weapon contracts in 2024, which increased uncertainties regarding the modernization of the Chinese military.