South Korea Defense Market - Size and trends, budget allocation, regulations, key acquisitions, competitive landscape and forecast, 2026-2031

South Korea Defense Market - Size and trends, budget allocation, regulations, key acquisitions, competitive landscape and forecast, 2026-2031 report provides the market size forecast and the projected growth rate for the next five years. The report covers industry analysis including the key market drivers, emerging technology trends, and major challenges faced by market participants. It also offers insights regarding key factors and government programs that are expected to influence the demand for military platforms over the forecast period.

Despite the Republic of Korea’s (ROK/ South Korea) defense budget shrinking in 2024 and 2025, 2026 recorded a 9.7% jump in spending. Defense spending in the ROK has fluctuated in line with North Korean defense posture since the Korean War. Nuclear developments over the past year, such as accelerating development of ballistic missiles and submarine capabilities, have forced Seoul to aggressively fund its preemptive strike framework. Additionally, over the past decade, the country has undergone a shift towards fostering domestic manufacturing capability, only procuring internationally as part of a political or economic deal with the given country, like with the US submarine deal, for instance. The country’s desire to foster its defense industrial base, combined with both a volatile US-China trade war and burden-sharing pressures from Washington is forcing South Korea to increase its defense spending substantially over the next ten years. During the period 2022-26, the ROK’s total defense budget recorded a CAGR of 2.8%, rising from $42.3 billionin 2022 to $47.2 billion in 2026.

Personnel remains the largest expenditure for the ROK’s Ministry of National Defense (MoND), accounting for 39% of all defense spend in 2026. While personnel is forecasted to grow at a CAGR of 3.6% over the period 2027-31, South Korea’s world-lowest fertility rate has reduced the amount of eligible conscripts, with the number of 20-year-old males in the country dropping 30% between 2019 and 2025. Because of these demographic issues, South Korean military leadership has indicated a shift towards AI and robot-enabled warfare. Defense Innovation 4.0, South Korea’s defense reform strategy, is pivoting the country’s military towards manned-unmanned teaming (MUM-T) and AI-enabled command networks, as well as procuring platforms like smart battleships and jets. RDT&E, therefore, has the highest CAGR between 2027 and 2031, going from $4.2 billion in 2026 to $6.0 billion in 2031. South Korea is allocating 30% of its total defense budget to RDT&E and acquisition for 2026, increasing to 32% come 2031. Overall, the South Korean defense market is set to grow at a CAGR of 3.9% between 2027 and 2031, increasing from $48.4 billion in 2027 to $56.3 billion in 2031.

Key Highlights

• Shifting North East Asia - US economic and security relations, combined with falling recruitment numbers, and numerous policies fostering domestic production are shifting the South Korean defesne market toward industrial autonomy.
• Major ongoing procurements include Nuclear-powered attack submarines (SSNs), the K-21 Boramae program, the Cheolmae 4-H program, and the KDDX Destroyer program

Scope

• This report offers a detailed analysis of South Korea's defense market, with market size forecasts covering the next five years. It also offers insights into the strategy, security environment and defense market dynamics of the country. Various sections covered in the report are as follows:
• Defense Budget Assessment: This chapter covers the defense budgeting process, market size forecasts, drivers of expenditure, and allocation analysis. It also examines key market trends and insights.
• Drivers, Trends and Political Environment: Detailed analysis of defense strategies, political, macroeconomic and technological factors, as well as alliances influencing the security environment.
• Market Entry Strategy and Regulations: This section elaborates on defense procurement bodies, trade associations and clusters, funding opportunities, contracting, essential aspects of procurement policy and market regulations, in addition to market entry challenges and routes.
• Market attractiveness: It provides an overview of deals and the investment landscape, evaluates the attractiveness of various defense sectors, indicating cumulative market value, and highlights the top sectors and defense segments by value in the country.
• Import and Export Dynamics: Provides an understanding of the defense platform imports and exports of the country from 2016 to 2025. Both imports and exports of the country are provided in terms of value ($M) and volume (units), categorized by country and sector.
• Defense Platform Acquisitions: Offers an overview of defense platform acquisitions by value. It lists current defense procurement schedules for the major ongoing and planned military platforms that have been formulated in the country and elaborates on the reasons leading to the procurement of the same.
• Fleet Size: Outlines the current fleet sizes of the Army, Air Force, and Navy, detailing the year of acquisition, units in service, and prime contractor for the equipment. It also provides the average age of the fleet for different services.
• Competitive Landscape: Profiles the main defense companies operating in the country.

Reasons to Buy

• Determine prospective investment areas based on a detailed trend analysis of the South Korea defense market over the next five years
• Gain in-depth understanding about the underlying factors driving demand for different defense and internal security segments in the South Korea market and identify the opportunities offered
• Strengthen your understanding of the market in terms of demand drivers, market trends, and the latest technological developments, among others
• Identify the major threats that are driving the South Korea defense market providing a clear picture about future opportunities that can be tapped, resulting in revenue expansion
• Channel resources by focusing on the ongoing programs that are being undertaken by the Singapore government
• Make correct business decisions based on in-depth analysis of the competitive landscape with links to detailed profiles of the top defense equipment providers in the country