As the fear of war grows, Europe is expanding its military power, but supply is overwhelmingly short. Korean weapons, proven in both quality and delivery, have an edge.
On the 27th, AFW Partners CEO Lee Seon-yeop said at a press briefing hosted by Hanwha Asset Management at the Korea Financial Investment Association on the theme of "reordering of the global security order and the 2026 outlook for K-defense" that deepening global conflicts are becoming the foundation for growth in the global defense industry market.
Lee noted that various agreements from the era of globalization, such as the World Trade Organization (WTO) and free trade agreements (FTA), are being nullified, and that the United States is moving to rebuild supply chains that exclude China to revive manufacturing. He analyzed that this trend is creating a confrontation between South Korea, the United States, and Japan, and North Korea, China, and Russia.
Lee explained that the global supply chain is becoming bloc-based and that the fear of war is spreading in Europe due to the Russia-Ukraine war, adding that an arms race has begun as a means to avoid war risks.
He added that there is an unprecedented shortage of weapons and that Europe is suffering from fiscal burdens, emphasizing that Europe wants a country that can supply weapons at the right time and at the right price, and Korea can be the answer.
Korea Investment and Securities researcher Jang Nam-hyeon, focusing on the fact that the negotiating power of Korean companies has grown compared to 2022 in response to concerns in some quarters about a "margin peak," said the likelihood of sustaining high margins is strong.
As grounds, Jang cited: ▲ continued excess demand environment for weapons systems ▲ increased market share of Korean companies compared with 2022 ▲ Middle Eastern countries with greater capacity for defense expenditure than Poland.
Jang stressed that attention should be paid to the Middle East market, noting in particular that suppliers are very limited in the global weapons systems market.
Jang said that the United States, France, Germany, and the United Kingdom, which had exported weapons to many Middle Eastern countries in the past, have shifted their focus to exporting to European countries such as Ukraine after the Russia-Ukraine war, opening opportunities for K-defense corporations. He added that many tanks and armored vehicles in the Middle East are aging and need replacement, and both Hanwha Aerospace and Hyundai Rotem are carrying out full-scale marketing activities in the Middle East.
Meanwhile, Hanwha Asset Management Chief Marketing Officer (CMO) Choi Yeong-jin said that the PLUS exchange-traded fund (ETF) showed a 112% net worth growth rate as of October this year compared with the end of the previous year, emphasizing that the bloc-to-bloc confrontation between the U.S.-centered Western camp and the China-centered anti-Western camp is a "new normal" that will last for decades.