South Korea Aerospace and Defense Market Size and Share - Growth Analysis Report and Forecast Trends (2026-2035)

The South Korea Aerospace And Defense Market attained a value of USD 16.5 Billion in 2025 and is projected to expand at a CAGR of around 6.1-9.4% through 2035, reaching USD 28.5 Billion by 2035. Korean Air's April 2025 selection as preferred bidder for the KRW 961.3 Billion UH-60 helicopter upgrade project covering 36 Black Hawks with digital cockpits; Hanwha Aerospace's March 2025 announcement of a USD 2.5 Billion rights offering to expand defense production targeting KRW 70 Trillion in sales by 2035; South Korea's 2022-2026 mid-term defense plan allocating USD 271.5 Billion for military modernisation; DAPA's air-to-air electronic warfare platform programme approved in April 2023 running through 2032 at USD 1.41 Billion; and South Korea's global defense export successes in FA-50 fighter jets to Poland and K9 self-propelled howitzers to multiple NATO allies are collectively driving explosive market expansion.

Key Market Trends and Insights

• South Korea's defense industry is experiencing an unprecedented export boom driven by European rearmament following Russia's invasion of Ukraine, with K9 Thunder howitzers ordered by Poland (672 units), Norway, Estonia, and Finland; K2 Black Panther tanks ordered by Poland (1,000 units); and FA-50 light combat aircraft ordered by Poland (48 aircraft), Philippines, and Iraq - establishing South Korea as a leading global defense exporter.
• By Industry, Maintenance, Repair & Overhaul (MRO) is projected for significant growth as South Korea's growing military fleet - F-35A stealth fighters, K2 tanks, K9 howitzers, naval destroyer and submarine programmes - requires increasing sustainment investment. Manufacturing, Design & Engineering remains the largest segment.
• South Korea's space sector is emerging as a strategic priority: KARI's August 2022 Danuri lunar orbiter and the successful NURI (KSLV-II) domestic launch vehicle demonstrate South Korea's indigenous space capabilities, with DAPA's USD 13.6 Billion space infrastructure investment plan through 2031 encompassing military reconnaissance satellites, space surveillance, and advanced communication systems.

Market Size & Forecast

• Market Size in 2025: USD 16.5 Billion
• Projected Market Size 2035: USD 28.5 Billion
• CAGR 2026-2035: 6.1-9.4%
• Mid-Term Defense Plan Budget 2022-2026: USD 271.5 Billion

South Korea's aerospace and defense market is one of the world's most dynamic, combining substantial domestic procurement driven by North Korea's nuclear and missile threat with a rapidly growing global defense export franchise. The Defense Acquisition Program Administration (DAPA) manages South Korea's defense procurement, with annual defense budgets of approximately USD 47.9 billion (2023) funding procurement across army (K2 tank, K21 IFV, K9 howitzer, Chunmoo MLRS), navy (KDX-III destroyer, KSS-III submarine, PKX-B guided missile corvette), and air force (F-35A stealth fighter, KF-21 Boramae indigenously developed supersonic fighter) programmes.

The most transformative development in South Korea's aerospace and defense market is the KF-21 Boramae programme - Korea Aerospace Industries' domestically developed 4.5-generation supersonic multirole fighter aircraft - which achieved its first successful supersonic flight in 2023 and is targeted for initial operating capability by 2026. The KF-21 represents South Korea's most ambitious aerospace engineering achievement, developing a supersonic fighter with indigenous design, domestic AESA radar, and infrared search-and-track systems. With potential export orders to Indonesia and other regional partners, the KF-21 could establish Korea Aerospace Industries as a credible fourth tier global fighter aircraft OEM alongside the US, European, and Russian manufacturers.

Key Takeaways

• South Korea's defense export success - generating approximately USD 17.3 billion in defense exports in 2023, making South Korea the world's 9th largest defense exporter - is providing commercial validation and production scale that reduces unit costs for domestic procurement, creating a virtuous cycle between export success and defense industrial capability development.
• Hanwha Aerospace's March 2025 USD 2.5 billion rights offering - targeting KRW 70 trillion in sales by 2035 - demonstrates South Korean defense companies' ambition to scale production capacity to meet both domestic modernisation requirements and growing global export demand for K9 howitzers, K2 tanks, and the next generation of Korean defense systems.
• South Korea's space sector development - the Danuri lunar orbiter, NURI launch vehicle programme, and DAPA's USD 13.6 billion space infrastructure investment - is establishing South Korea as an APAC space power with commercial and military satellite capabilities that support both domestic requirements and regional partner demands.