Korean defense companies eye U.S. entry

[Courtesy of LIG Nex1 Co.]

South Korea’s defense industry is poised to enter the U.S. market through acquisitions and export deals in the second half of 2024.

According to industry sources on Monday, LIG Nex1 Co. is awaiting approval from the Committee on Foreign Investment in the United States (CFIUS) for the 60 percent stake it acquired last year in U.S. quadruped robot company Ghost Robotics Corp.

The successful completion of the acquisition process, which is expected to be approved by U.S. authorities by the end of the year, is expected to place the company in a favorable position for entry into the U.S. market.

Ghost Robotics had previously developed the Vision 60 quadruped robot for military reconnaissance and security purposes and supplied it to the U.S. and U.K. armed forces.

The U.S. Tyndall Air Force Base has deployed four Vision 60s to patrol the perimeter of the base, while the U.K. military has deployed ten Vision 60s for resupply, surveillance and reconnaissance.

Industry insiders also see prospects for the export of LIG Nex1‘s 2.75-inch Poniard (locally known as Bigung) guided munition to the U.S. by the end of the year.

The U.S. Department of Defense is scheduled to conduct a final test of Poniard next month during the Rim of the Pacific Exercise (RIMPAC), the world’s largest international naval warfare exercise.

If Poniard passes the test, its U.S. export could be in sight by the end of the year.

With a maximum range of 8 kilometers and equipped with infrared guidance, Poniard can engage multiple targets simultaneously and is highly mobile due to its vehicle-mounted design. If successful, LIG Nex1 would become the first Korean defense company to export finished products to the U.S.

Entry into the U.S. Navy‘s maintenance, repair and overhaul (MRO) market is also within reach.

[Graphics by Song Ji-yoon]

HD Hyundai Heavy Industries Co. is expected to obtain Master Ship Repair Agreement (MSRA) qualification to enter the Navy’s MRO market by mid-June.

Upon obtaining the MSRA qualification, HD Hyundai Heavy Industries is expected to secure a position to win maintenance and repair contracts for combat and non-combat ships of the U.S. Navy‘s 7th Fleet worth $250 million annually.

While securing contracts for critical ships such as combat ships may be challenging at first, HD Hyundai Heavy Industries plans to expand its business by starting with non-combat ships such as transport ships.

Korean Aerospace Industries Ltd. (KAI) is aiming to win the contract to launch the U.S. Navy’s Undergraduate Jet Training System (UJTS) with the upgraded version of the FA-50 light attack aircraft, known as the TF-50, currently under development in a consortium with Lockheed Martin Corp.

The U.S. Navy‘s 220-unit UJTS fielding project is expected to begin next year.

The Korean defense industry is seeking to enter the U.S. because it is the world’s largest defense market and a battleground for intense competition among global defense companies.

Last year, the U.S. spent $916 billion on defense.

“In the Southeast Asian, Middle Eastern, and Eastern European countries where domestic defense firms have found export success, the markets are generally considered peripheral,” said Jang Won-joon, a researcher at the Korea Institute for Industrial Economics & Trade. “Entering the U.S. market could signify global recognition of products.”