South Korea’s defense industry is gaining ground in the global arms market, creating new opportunities—and potential competitive pressure—for U.S. defense contractors and investors as allies increase military spending and seek alternatives to traditional suppliers. Four South Korean companies ranked among the world’s 100 largest defense contractors in 2026, with Hanwha making the biggest move up the rankings.
On August 31, U.S. defense publication Defense News ranked Hanwha No. 16 globally, up six places from last year, after the company generated $10.44 billion in defense revenue in 2025. Its defense revenue rose from $6.82 billion in 2024, an increase of nearly $3.62 billion.
The figures highlight the rapid expansion of South Korea’s defense business, which has increasingly moved beyond its traditional domestic market into major overseas procurement programs. For U.S. defense companies, South Korean contractors are emerging as increasingly significant competitors in areas ranging from artillery and armored vehicles to missiles and aerospace systems.
Defense News ranks defense companies by their defense revenue in the previous year. Defense operations accounted for 20% of Hanwha’s total revenue in 2025.
LIG Nex1 ranked No. 52, up one place from No. 53 a year earlier, with $3.03 billion in defense revenue.
Hyundai Rotem climbed six places to No. 61 from No. 67, while Korea Aerospace Industries fell eight places to No. 74 from No. 62.
The four South Korean companies have appeared together in Defense News’ Top 100 for two consecutive years. Their continued presence reflects the country’s growing role as a major exporter of conventional weapons and military equipment.
The expansion comes as governments in Europe and other U.S.-aligned markets accelerate efforts to replenish weapons inventories, strengthen military capabilities and diversify supply chains. South Korean manufacturers have benefited from their ability to offer relatively fast delivery and competitive pricing while expanding production capacity.
For U.S. investors, the rise of South Korean defense companies also underscores a broader shift in the global defense industry. The market is no longer dominated solely by the largest U.S. contractors as European and Asian manufacturers gain access to overseas procurement programs and build deeper relationships with allied governments.
U.S. companies continued to dominate the top of the Defense News ranking. Lockheed Martin remained No. 1, with $72.14 billion in defense revenue in 2025. RTX ranked second, followed by General Dynamics and Northrop Grumman.
BAE Systems of the U.K. ranked No. 5, while Boeing ranked No. 6. China’s Aviation Industry Corp. of China, or AVIC, ranked No. 7.
L3Harris Technologies ranked No. 8, Italy’s Leonardo ranked No. 9 and Airbus ranked No. 10, rounding out the top 10.
The widening field of global defense suppliers could give governments more procurement options while increasing competition for U.S. contractors in overseas markets—a trend investors will be watching as allied defense budgets continue to rise.
