As the war triggered by U.S. and Israeli airstrikes on Iran spreads across the Middle East with growing concerns of prolonged conflict, South Korea's defense industry is expected to benefit from increased demand for weapons systems including the Chunmoo multiple rocket launcher and Cheongung missile defense system. Some analysts project that combined revenue of South Korea's four major defense contractors, which surpassed 40 trillion won last year, could exceed 50 trillion won this year if Middle East-driven demand materializes.
According to military authorities and defense industry sources on the 4th, South Korea's medium-range surface-to-air guided weapon Cheongung-2 (M-SAM II), deployed at Al Dhafra Air Base in southern Abu Dhabi, UAE, achieved an interception rate of approximately 90% during Iran's retaliatory attacks. The better-than-expected performance in Cheongung-II's first combat deployment has raised expectations for follow-on export deals. The UAE government signed a contract worth approximately 4 trillion won with LIG Nex1, Hanwha Systems, and Hanwha Aerospace in 2022 to acquire the Cheongung-2 system.
Cheongung is a Korean medium-range surface-to-air guided weapon system developed with domestic technology. It is divided into Block-I for countering enemy aircraft and Block-II, which adds engagement control technology for ballistic missile interception. The Cheongung-2 acquired by UAE can intercept ballistic missiles at altitudes of approximately 15-20 kilometers using a hit-to-kill method. It can also engage multiple targets simultaneously by firing interceptor missiles in all 360-degree directions.
The system is particularly praised for its cost-effectiveness compared to competing weapons systems such as the U.S. Patriot. Starting with UAE, large-scale orders have followed from Middle Eastern markets including Saudi Arabia (4.25 trillion won) in 2024 and Iraq (3.9 trillion won) in 2025. Building on successful Cheongung-2 exports, the defense industry is also eyeing export potential for the L-SAM long-range interception system, which recently entered mass production.
Hanwha Aerospace's Chunmoo (K-239), a Korean multiple launch rocket system, is also considered a star product for K-defense. Chunmoo was exported to Middle Eastern countries in 2017 and 2021. The system, comprising a launcher (K239L) and ammunition transport vehicle (K239T) as one set, features the ability to select and operate various ammunition types according to the situation. It is recognized as a core component of the "kill chain" for rapidly neutralizing enemy long-range artillery forces in the early stages of war.
Korea Aerospace Industries (KAI) also aims to make this year the inaugural year for KF-21 supersonic fighter exports to the Middle East. As the current war has reaffirmed the importance of air superiority, Saudi Arabia and UAE are expected to accelerate modernization of their air force capabilities.
Securities analysts project that combined revenue of South Korea's four major defense contractors—Hanwha Aerospace, Hyundai Rotem, KAI, and LIG Nex1—will exceed 50 trillion won this year. This significantly surpasses last year's revenue of 40.4526 trillion won. Initial forecasts were around 48 trillion won, but expectations could rise further if oil-producing nations' demand for early weapons acquisition materializes.