In a world increasingly shaped by geopolitical uncertainty, the defense industry is experiencing a surge in investment and international collaboration, with Australia and South Korea emerging as notable players. Recent developments in both countries underscore a shifting landscape where local industry support and global export ambitions are being propelled by government initiatives and market demand.
On August 18, 2025, the Victorian Minister for Industry and Advanced Manufacturing, Colin Brooks, visited Hanwha’s Armoured Vehicle Centre of Excellence at the Avalon Airport Industrial Precinct. There, he announced the recipients of Round 5 of the Supply Chain Uplift Program, a Victorian government initiative that is providing more than $800,000 in funding to support 11 local businesses. Each recipient is set to receive matched grants of up to $100,000, empowering them to undertake projects ranging from facility upgrades to obtaining critical industry accreditations and advancing research and product development. These efforts are aimed at strengthening their competitiveness for supply chain contracts at Hanwha Defence Australia’s facility in Avalon and with other major defense businesses across the state.
Hanwha Defence Australia is at the center of two major projects: the federal government’s $1 billion Land 8116 Phase 1 Protected Mobile Fires program, which will deliver the Huntsman vehicles (including the AS9 Self Propelled Howitzer and AS10 Armoured Ammunition Resupply Vehicle), and the $5 to $7 billion Land 400 Phase 3 Infantry Fighting Vehicle program, responsible for the production of the AS21 Redback. These projects are expected to generate more than 1,000 direct jobs and create hundreds more opportunities across Victoria’s network of 2,500 defense supply chain businesses.
"The support from the Victorian government through the Supply Chain Uplift Program to SMEs is an excellent ongoing investment in defense industry," said Ben Hudson, CEO of Hanwha Defence Australia and Europe/UK, as reported by Times News Group. "From capital investment to DISP accreditation, it’s great to see SMEs investing to make sure they are ready to do business with us in current and future defense programs."
The Victorian government’s vision is clear: to establish the state as a powerhouse in defense and aerospace. Minister Brooks emphasized, "We’ve set out a vision for Victoria to be a defense and aerospace powerhouse – and we’re backing our industry to grow and thrive. The Supply Chain Uplift Program gives Victorian manufacturers the best shot at winning substantial defense contracts, helping to create jobs and boost the economy." For those interested in learning more about the program, eligibility criteria and application details are available at business.vic.gov.au/scup.
Meanwhile, on the global stage, South Korea’s defense industry is making headlines for its strong export performance, fueled by ongoing tensions in Europe and Asia. On August 19, 2025, industry officials told Yonhap News Agency that South Korea’s defense exports are expected to remain robust, citing persistent geopolitical uncertainties such as the Russia-Ukraine war and rising security tensions in Asia. Despite international efforts to resolve the Ukraine conflict, an official from a major South Korean defense firm remarked, "Even if there is a cease-fire or peace agreement, I don’t think the overall arms buildup in Europe will decrease." The official clarified that while South Korean firms do not export to Ukraine or Russia, they are closely monitoring the evolving situation.
Another industry representative explained, "We need to look at how the geopolitical landscape is changing. From a business perspective, we will continue to watch these shifts closely and capture new opportunities." The official also noted ongoing efforts to explore cooperation with major European defense companies. A third source added that the global demand for advanced weapons systems could accelerate, stating, "The Ukraine war has made countries recognize the importance of preserving their own security. I predict governments will strengthen research and development in areas that can help them prepare for future battlefields, such as those involving unmanned and automated warfare."
South Korea’s rapid expansion in the global defense market is attributed to a combination of factors: the intensifying rivalry between the United States and China, and persistent security instability in Europe and the Middle East. According to the Stockholm International Peace Research Institute, South Korea ranked 10th worldwide in arms exports between 2020 and 2024. This momentum was further highlighted earlier this month when South Korea signed a $6.5 billion deal with Poland to export a second batch of K2 tanks from Hyundai Rotem Co., marking the largest-ever export contract for a South Korean defense contractor.
President Lee Jae Myung has made defense exports a cornerstone of his economic agenda, pledging to transform South Korea into one of the world’s top four defense powerhouses during his term. Ahn Sang-nam, head of the defense industry promotion division at the Korea Defense Industry Association, told Yonhap News Agency, "The sense of insecurity in Europe is unlikely to fade even if the conflict in Ukraine subsides. In my personal opinion, it will not have a major direct impact on South Korean defense exports. Russia continues to pose a threat not only to Ukraine but to the Baltic region at large, and there is a growing perception that each country needs to take charge of its own security." He added, "Our weapons systems are highly suited for regions that truly need them, so I believe Korea’s defense exports will continue their upward momentum for the time being."
This optimism is supported by financial results. The combined operating profit of South Korea’s top five defense firms—Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries Co., Hanwha Systems Co., and Hyundai Rotem—soared 161 percent year-on-year to 2.34 trillion won (about US$1.69 billion) in the first half of 2025, already reaching 80 percent of their annual earnings in 2024. In February, Seok Jong-gun, minister of the Defense Acquisition Program Administration, predicted that South Korea is poised to post its largest-ever defense export results in 2025, thanks in part to projects rolled over from the previous year.
Despite this positive outlook, industry experts caution that long-term success is not guaranteed. Ahn noted the importance of continued investment in research, development, and innovation to generate future growth engines for the sector. "It is difficult for the industry to guarantee its success in the following decade," he said, underscoring the need for vigilance and adaptability.
As Australia invests in building up its local defense supply chain and South Korea continues its ascent as a global arms exporter, the defense industry’s trajectory seems set for further growth—at least for the foreseeable future. Both nations are responding to a world where security concerns are driving economic opportunity, and where the ability to adapt and innovate may well determine who leads the next chapter in global defense.
