Hanwha Systems is expected to set a record high order backlog as it secured delivery contracts worth 930 billion won in the fourth quarter of last year. Although Hanwha Systems does not manufacture bulky weapons like tanks or ships directly, it is regarded as a hidden supporter of the South Korean defense industry by supplying a variety of systems and equipment that can be called the 'brain' of weapons.
According to the Financial Supervisory Service's electronic disclosure system on the 2nd, Hanwha Systems signed seven single sales and supply contracts in the fourth quarter of last year. The total contract amount is approximately 929.8 billion won. The orders cover all three areas: three land-based, two maritime, and one air.
In the air institutional sector, Hanwha Systems secured a supply contract worth 61.6 billion won for mission computers (MC), multi-function displays (MFD), audio command and control systems (ACCS), and infrared search and track equipment (IRST) to be installed on the Korea Aerospace Industries' (KAI) first production model of the KF-21.
The mission computer acts as the brain of the fighter jet, while the multi-function display and audio command and control system serve as the pilot's eyes and ears. The infrared search and track equipment detects and tracks threat targets approaching the aircraft and provides information. Hanwha Systems achieved domestic production after the United States refused to transfer technology.
In the land institutional sector, Hanwha Systems won a logistics support (PBL) contract worth 204.6 billion won based on the results of system integration for the short-range surface-to-air missile system 'Cheonma.' This includes providing maintenance, repair, and overhaul (MRO) services involving detection and tracking radar, fire control systems, and chassis for the Cheonma and the army armored vehicles equipped with Cheonma, aiming to enhance operational readiness.
Additionally, Hanwha Systems signed a contract worth 82.2 billion won to provide the fire control system and fire control systems for 51 K11 command vehicles and 216 K9A1 self-propelled howitzers, which it contracted for export to Egypt in 2022. This is the first time a fire control system developed by a domestic defense firm has been exported abroad.
In the maritime institutional sector, Hanwha Systems secured a contract for the KDX-II (Korea Destroyer Experiment-II) performance upgrade combat system development project worth 197.1 billion won and a combat system project for the Ulsan-class Batch-IV (ships 1 and 2) worth 186.7 billion won. The KDX-II performance upgrade combat system development aims to enhance the performance of command and control systems and fleet air defense missile command systems installed on domestically produced advanced destroyers. Hanwha Systems plans to utilize technology applied to the performance enhancement of KDX-I, which it previously carried out.
The combat system project for the Ulsan-class Batch-IV (ships 1 and 2) involves supplying combat management systems (CMS), multi-functional radars (MFR), infrared detection and tracking equipment (IRST), and electro-optical tracking systems (EOTS) to the Ulsan-class corvettes. A total of six Ulsan-class Batch-IV corvettes will be built, with the contracts for ships 1 and 2 awarded to Hanwha Ocean, while Hanwha Ocean and HD Hyundai Heavy Industries are competing for the remaining four.
At the end of last year, Hanwha Systems' order backlog is expected to exceed 8 trillion won, marking a record high. The order backlog has increased annually: ▲5.8 trillion won in 2021 ▲5.9 trillion won in 2022 ▲7.3 trillion won in 2023. The order backlog stood at 7.9 trillion won at the end of the third quarter of last year, up 12% from the end of the previous year.