The South Korean defense industry is at a pivotal crossroads, as two of its most formidable conglomerates—HD Hyundai and Hanwha—vie fiercely for major military contracts that could redefine their standing both at home and abroad. With the much-anticipated selection of contractors for the Korean Destroyer Next Generation (KDDX) project and the multipurpose unmanned vehicle program looming, the results are poised to ripple across the global defense landscape.
On March 23, 2026, the Defense Acquisition Program Administration (DAPA) in South Korea announced the official bid for the KDDX detailed design and lead ship construction. The project, with a massive budget of 882.099 billion KRW (including VAT), marks one of the country's most ambitious naval undertakings to date. The KDDX program aims to build six 6,000-ton Aegis-class destroyers using entirely domestic technology, with the total project cost estimated at a staggering 7.8 trillion KRW. According to News1, the project briefing is set for March 31, 2026, with bid registration closing on May 14 and the bid opening scheduled for May 18. The final contractor is expected to be selected and the contract signed by July 2026.
But this is no ordinary competition. Only two shipbuilding giants—HD Hyundai Heavy Industries and Hanwha Ocean (formerly Daewoo Shipbuilding & Marine Engineering)—are eligible to participate, setting the stage for a high-stakes showdown. Both companies bring decades of expertise to the table. HD Hyundai Heavy Industries boasts experience from the 2020 KDDX basic design contract and has built renowned Aegis destroyers such as the Sejong the Great and Jeongjo the Great classes. Hanwha Ocean, on the other hand, leverages its 2012 KDDX concept design experience and a strong track record with submarines like the Jangbogo and Son Wonil classes.
The rivalry, however, goes beyond technical prowess. According to News1, tensions have been simmering between the two firms, fueled by allegations that HD Hyundai's confidential KDDX reports were unlawfully obtained by Hanwha Ocean. The dispute intensified when DAPA distributed basic design data—including sensitive trade secrets—to Hanwha Ocean, prompting HD Hyundai to file an injunction with the courts. "We have to write a bid proposal, but since the basic design results containing business secrets were handed over to the competitor, it cannot help but be unfair," an HD Hyundai official told News1. "There is also great uncertainty because the security deduction criteria have not been confirmed."
DAPA is reportedly considering applying security-related deductions to HD Hyundai in the bid evaluation, citing past information leaks. Yet, the criteria for these deductions remain undecided as the bidding process unfolds, raising concerns about fairness and transparency. Hanwha Ocean, for its part, has maintained a focus on cooperation and due diligence, stating, "We plan to actively cooperate with the government project according to DAPA's plan and prepare for the project faithfully."
While the KDDX battle rages at sea, a parallel contest is unfolding on land. The multipurpose unmanned vehicle project, valued at 49.63 billion KRW and announced in April 2024, pits Hyundai Rotem against Hanwha Aerospace. These next-generation unmanned vehicles are considered a cornerstone of the Army's future force concept, Army Tiger 4.0. The project has not been without its own share of drama. Initial plans called for the contractor to be selected by mid-2024, but disagreements over performance evaluation criteria and friction between Hyundai Rotem and Hanwha Aerospace have delayed the process.
Recently, Hanwha Aerospace completed the performance verification evaluation for the project on its own, while Hyundai Rotem did not participate. The final contractor is now expected to be selected by the first half of 2026. Should Hyundai Rotem ultimately withdraw, the absence of multiple bidders could result in the tender being voided, a scenario that would further complicate the procurement timeline. Both contenders have showcased their technological strengths: Hyundai Rotem's HR-Sherpa features a six-wheel electric drive, 360-degree on-the-spot rotation, and advanced autonomous driving capabilities. Hanwha Aerospace's Arionsmet unmanned vehicle boasts a top speed of 43 km/h and can travel 100 km on a single electric charge.
Hanwha Aerospace has expressed eagerness to move forward. "After completing the performance verification evaluation alone, we are waiting for the next step," a company representative told News1. "We believe it is right to proceed quickly and supply multipurpose vehicles to our military as soon as possible." The company also addressed recent controversy over unauthorized updates to prototype vehicles, stating, "The controversy has been resolved through verification, and other issues are unlikely to be problematic. Considering the goal of self-reliant national defense, we hope for a swift conclusion." Hyundai Rotem, meanwhile, is said to be weighing its options carefully regarding continued participation.
The outcome of these two major defense contracts is expected to have far-reaching implications for the industry. As a defense industry insider told News1, "Hyundai is strong in manufacturing, while Hanwha is catching up through mergers and acquisitions. For KDDX, the key battleground is ship design and construction capability; for unmanned vehicles, it's the fusion of autonomous driving and sensor technology. This round of bidding could reshape the future landscape of the defense market."
While South Korea's defense giants are locked in competition at home, Hanwha Aerospace is also making significant inroads abroad—most notably in Poland. In early March 2026, the Polish Missile and Artillery Training Center (CSWRiA) in Toruń conducted a specialized training course for the Homar-K multiple rocket launcher system, a Polish variant of Hanwha's K239 Chunmoo. The training, which targeted platoon and battery commanders as well as rocket artillery battalion staff, combined theoretical instruction with hands-on practice, covering everything from launch procedures to the influence of weather and terrain on mission success. Hanwha Aerospace personnel participated directly, sharing operational expertise with the K239 Chunmoo system, according to reports from The Guru.
Poland's rapid adoption of the Homar-K system has been remarkable. As of March 2026, 156 launch modules had been delivered, with at least 108 fully operational. The initial contract for 212 units was expanded to 290, including advanced munitions such as the 80 km-range CGR-080 guided rockets and 290 km-range CTM-290 short-range ballistic missiles. Hanwha Aerospace first inked a basic contract with the Polish Military Procurement Agency in July 2022, followed by execution agreements in November 2022 and April 2024, cementing its commitment to deliver all 290 units. The launch modules are manufactured by Hanwha and integrated with Polish state-owned partners like Huta Stalowa Wola and Jelcz, ensuring seamless compatibility with Poland's battlefield management systems.
Looking ahead, the CGR-080 guided missiles will be produced by Hanwha WB Advanced System—a joint venture established in 2023 between Hanwha Aerospace and Poland's WB Group—with deliveries to the Polish military scheduled to begin in 2030. The rapid pace of equipment deployment has made standardized training essential, not just to unify operational standards across units, but to maximize the effectiveness of the new systems in real-world scenarios.
As South Korea's defense titans battle for supremacy at home, their influence is increasingly felt on the global stage. The coming months will not only decide the fate of billion-dollar contracts but could also determine who leads the next era of defense innovation—both in Korea and beyond.