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A South Korean missile defence specialist has emerged as a beneficiary of the US-Israel war on Iran, with demand for LIG Nex1’s cheaper system pushing its shares higher and shining a spotlight on the country’s thriving security sector.
The company’s flagship product is the Cheongung-II (M-SAM II), a mid-range missile defence system that it has already sold to Saudi Arabia, Iraq and the United Arab Emirates, and that is much cheaper than its rivals.
The system, which fulfils a similar role to the Patriot PAC-3 mid-range interceptors used by the US and its allies, has demonstrated a 96 per cent success rate against Iranian missile and drone attacks, according to Yoo Yong-won of the Korean National Assembly’s defence committee.
Until this month, the Cheongung-II had not been tested in a real war situation. Now that it has proven itself, “there will be much higher demand from the [Middle East] region and Europe”, said Kim Ho-sung, professor of advanced defence engineering at Changwon National University.
Shares in the missile defence specialist LIG Nex1 are almost 47 per cent higher than before the conflict started in late February, a sharp contrast to the falls in the broader Korean market.
The increased importance of anti-missile systems worked to LIG Nex1’s advantage, Kim said.
“The Iran war is mostly about firing missiles and defending against them as politicians are reluctant to send in ground troops over fear over mass casualties . . . therefore the importance of anti-missile defence systems is increasing as Iran continues to fire waves of missiles and drones,” he said.
In a recent report, Chae Woon-saem of Hana Securities noted stockpiles could be quickly depleted. “Iran is estimated to have launched hundreds of ballistic missiles, and given that multiple interceptor missiles are typically fired to counter a single ballistic missile.”
Interceptor missiles are expensive and produced in low volume. Lockheed Martin, which manufactures the Patriot PAC-3, produced only around 620 last year at a cost of $3.7mn each.
While the lead time for PAC-3 delivery could be around four to six years, LIG Nex1, which also has a substantial backlog, was expanding capacity and could potentially increase production within nine to 12 months with double-shift operation, said Nomura analyst Eon Hwang in a research note. The Cheongung-II is also much cheaper, at around $1.1mn per missile.
“Korean defence companies are good at meeting deadlines with value for money,” said Moon Sung-mook, senior researcher at the Korea Research Institute for National Strategy.
“K-defence”, as Korean authorities refer to it, has thrived in recent years, thanks to government support and a surge in global rearmament, particularly in Europe and the Middle East.
According to the Stockholm International Peace Research Institute (SIPRI), global defence spending reached $2.7tn in 2024, 9.4 per cent higher than the previous year.
Korea has become the world’s ninth-largest arms exporter, with 3 per cent market share, according to SIPRI. Nearly 60 per cent of Korean defence exports between 2021 and 2025 went to Poland, which has been dramatically increasing military spending in the wake of Russia’s war on Ukraine.
In a 2022 agreement, Poland bought $22bn worth of Hyundai Rotem tanks, K9 howitzers and Chunmoo rockets from Hanwha Aerospace, as well as FA-50 fighter jets from Korea Aerospace Industries. Last year Warsaw made a follow-up order for 180 more Rotem tanks worth $6.5bn.
Korea’s Polish deals are serving as a bridgehead into a re-arming Europe. Norway signed a $2bn contract for the firm’s Chunmoo missile system this February, selecting it over the US’s Himars. Estonia has also recently agreed to take €290m of Chunmoo rocket launchers.
Hanwha Aerospace shares have risen from Won187,500 to Won1,435,000 over the past year. Armoured vehicle maker Hyundai Rotem is up more than sixfold over the same period and shares in fighter jet maker Korea Aerospace Industries have tripled.
The success of Cheongung-II highlights how Korean defence companies increasingly operate as an ecosystem. A Cheongung-II battery consists of a radar, an engagement control station and four transporter-erector launchers. LIG Nex1 is responsible for the overall system as well as the interceptor missiles, while Hanwha Systems supplies the radar and Hanwha Aerospace — Korea’s largest defence firm — provides the launchers.
LIG Nex1 declined to comment.
Additional reporting by Kang Bu-seong
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