[Edaily Reporter Park Soon-yeop] South Korean air defense systems, which have proven their performance and reliability in the Middle East, are expanding their reach into the European market. As European countries accelerate the rebuilding of their air defense networks in the wake of the Russia-Ukraine war, analysts suggest that South Korean defense companies could emerge as a new option for medium- and long-range air defense systems.
Yang Seung-yoon, an analyst at Eugene Investment & Securities, stated in a report on the 17th, “K-air defense systems, whose performance and reliability have been verified in the Middle East, are pushing for expansion into Europe,” and maintained an “Overweight” investment rating for the defense sector.
He highlighted #LIG Defense & Aerospace, #Hanwha Aerospace, and #Hanwha Systems as stocks to watch. For LIG Defense & Aerospace, he maintained a “Buy” rating and raised the target price to 1.2 million won. He kept the target prices for Hanwha Aerospace and Hanwha Systems at 1.86 million won and 140,000 won, respectively.

The key focus of this report is the strategic collaboration between LIG Defense & Aerospace and Germany’s Rheinmetall. The two companies announced a strategic partnership in the air defense systems sector on the 15th. The collaboration aims to establish a multi-layered air defense system ranging from Very Short-Range Air Defense (VSHORAD) to Short-Range Air Defense (SHORAD), Medium-Range Air Defense (MRAD), and Long-Range Air Defense (LRAD).
The structure involves combining Rheinmetall’s very short-range air defense capabilities with LIG Defense & Aerospace’s medium- and long-range air defense missile systems. LIG Defense & Aerospace plans to pursue localization, upgrades, and marketing of its medium- and long-range air defense systems within Europe, while in the short-range air defense sector, the two companies plan to jointly develop new missiles and related capabilities. The partnership is currently in the strategic partnership agreement phase, with the short-term goal being the establishment of a joint venture in which Rheinmetall will hold a majority stake.
Researcher Yang viewed this collaboration as significant for both companies. This is because Rheinmetall can expand its existing portfolio—which is centered on ground systems—to include air defense missile systems, while LIG Defense & Aerospace can establish a foothold in the European market, which has high barriers to entry. In particular, they predicted that positioning the solution as interoperable with the North Atlantic Treaty Organization’s (NATO) integrated air and missile defense system would be advantageous for meeting European joint procurement and localization requirements.
Demand for air defense in Europe has surged following the Russia-Ukraine war. While Europe did not prioritize investment in air defense systems after the Cold War, the prolonged conflict and ongoing missile and drone threats from Russia have made the need to expand air defense networks increasingly urgent. Researcher Yang, citing estimates from the German think tank Kiel Institute, explained that 89 batteries are needed to defend strategic locations across Europe, and the total cost of deploying these air defense systems could reach 300 billion euros, or approximately 500 trillion won.
Eugene Investment & Securities estimated that even under conservative assumptions, the market for additional air defense systems in Europe could reach up to 160 trillion won. This estimate is based on the assumption that approximately 40 batteries are currently deployed in Europe and that an additional 50 batteries will be procured. Applying a unit price of 1.5 trillion won per battery and 6 billion won per missile, the calculation suggests a total market of 160 trillion won, comprising 70 trillion won for batteries and 90 trillion won for interceptor missiles.
Demand for interceptor missiles was also cited as a separate growth factor. The Center for Strategic and International Studies (CSIS) in the United States estimates that Russia produces 800 to 1,000 ballistic missiles annually. Assuming that two interceptor missiles are allocated for each ballistic missile, the annual demand for ballistic missile interceptors could reach approximately 2,000 units. At 6 billion won per missile, this represents a market worth 12 trillion won annually.
Currently, various air defense systems exist in Europe, including the U.S. Patriot, France’s SAMP/T, Germany’s IRIS-T, Norway’s NASAMS, France’s VL-MICA, and the U.K.’s CAMM. However, high-tier air defense and missile defense systems capable of intercepting ballistic missiles are limited to the Patriot, THAAD, and SAMP/T families. Analysts note that supply capacity and delivery schedules for U.S. systems are uncertain due to depleted stockpiles amid the Middle East crisis, and since the SAMP/T NG is still in the early stages of operational deployment, there is a growing need for Europe to secure additional medium- and long-range air defense options.
Not only LIG Defense & Aerospace but also Hanwha Group’s defense affiliates are being cited as potential beneficiaries. Hanwha Aerospace and Hanwha Systems are targeting the German and European markets through separate channels. Researcher Yang believes that the recent developments involving LIG Defense & Aerospace could bring renewed attention to Hanwha Aerospace’s marketing of the L-SAM in Europe and Hanwha Systems’ efforts to integrate its multifunction radar (MFR) with Germany’s Diehl Defense.
Researcher Yang stated, “I recommend maintaining a close watch on the ‘Big Three’ of South Korea’s air defense sector: LIG Defense & Aerospace, Hanwha Aerospace, and Hanwha Systems.”