K2 Tank Likely Bound for Peru; Hanwha Ocean Set as Sole Negotiator for Thai Frigate Program

This is seen as an important sign of K-defense's potential to expand into the Latin American market.

The contract has not yet been formally signed, but images have confirmed that K2 tanks have already arrived in Peru and taken part in a military parade.

Peru has no defense company of its own, and the CTO is the core body responsible for weapons acquisition decisions and technical analysis, so its recommendation is expected to have a decisive influence on the export.

Beating the Chinese tank is also viewed as a positive.

The K2 is set to be optimized for operation in Peru's high-altitude desert regions. The original K2 was developed for domestic terrain and had limitations in desert operations, but the desert-specialized K2ME (Middle East version) was completed earlier this year and shown to Middle Eastern countries including Iraq, demonstrating its desert capability. Peru also plans local production to create jobs and promote cooperation through technology transfer.

It could also open opportunities for further exports to other Latin American countries.

This shows Hanwha Ocean's strong competitiveness in the Thai navy program.

Eight companies are competing for the Thai frigate program. Among Korean firms, besides Hanwha Ocean, HD Hyundai Heavy Industries and STX Shipbuilding are proposing Korean-built systems based on the Daegu-class frigate. However, Hanwha Ocean, which has already supplied one ship to Thailand, is considered the most likely candidate.

This can be interpreted as the navy judging that newly designed ships from other shipyards have not been proven, and recognizing the strength of Korean-built ships based on the Daegu and Chungnam-class frigates.

The episode suggests Thailand faced trust issues in its relationship with China, and the shift has opened new opportunities for Korean defense companies. Thailand, which had maintained a fairly close relationship with China despite facing Chinese pressure, is seen as having felt betrayed, which has worked in Korea's favor.

The Royal Thai Navy has operated only one submarine acquired from China, and due to widespread dissatisfaction with its performance, some expect the follow-on submarine program to go to Korea. In that case, the Thai navy could end up with a fleet of all-Korean submarines.

LIG Nex1 and Hanwha Systems are participating, but competition is expected to be fiercer than anticipated, so both companies will need to put in considerable effort.

With a value of roughly 589.7 billion pesos, a win would extend Cheongung-II's influence in Southeast Asia, but competition is intense because strong rivals such as Israel's SPYDER and Germany's IRIS-T also share the advantage of combat-proven performance.

Cheongung-II has achieved results such as a 96% interception rate, but rival systems also have combat records: Israel's SPYDER and Germany's IRIS-T have proven themselves in the Iran conflict and the Ukraine war, respectively. Proven combat performance alone therefore makes it difficult to gain an edge. Israel's SPYDER, in particular, has a track record of success in Southeast Asia through price competitiveness and aggressive pricing, and is seen as the greatest threat to watch. A Turkish missile is assessed as less competitive because it has not been proven in combat.

Cheongung-II has an advantage in integrated operation with U.S.-made systems such as the Patriot missile. Israel's SPYDER claims close integration with the U.S. because of their special relationship, but outside Israel there are few cases of it operating integrated with U.S. missiles. Cheongung-II, by contrast, operates integrated with U.S.-made THAAD and Patriot missiles in three countries (the UAE, Saudi Arabia, and South Korea), which could give it a competitive edge in the Philippine market, where integration matters. The radar's earlier weakness to heat has been improved through an AESA radar developed for a UAE order, and its proven stable performance in hot climates is expected to serve it well in the Philippines' jungle and high-temperature environment.

At the NATO summit on July 8, sales of the K2 tank, K9 self-propelled howitzer, and Chunmoo multiple rocket launcher to NATO members were discussed, and concrete results are expected from this autumn onward.

France's Thales and Hanwha have agreed to integrate the Chunmoo rocket into Thales' multiple rocket launcher, and LIG Nex1 and Hanwha Aerospace plan to establish European branches to increase joint development of weapons. European countries have strong demand for domestic weapons and are working to strengthen their defenses, and Korean weapons are increasingly entering through partnerships with local European companies in forms such as missile-launcher pairings and anti-aircraft gun-missile combinations, so follow-up developments are expected in the second half of the year.

The Korean K-SM2 air defense missile is also drawing attention as a promising next-generation export item. The K-SM2 is described as a naval version of Cheongung and is rated as superior to competing products such as France's Aster and the U.S. Standard SM-6. The SM-6 was developed in the 1960s and upgraded, but its older design is a limitation, while the Aster lacks the ability to intercept ballistic missiles and can only target cruise missiles and drones. LIG Nex1's K-SM2 is seen as addressing these shortcomings and holding a competitive edge.

Additional sales are expected in the second half of the year, which is expected to expand K-defense's footprint in the U.S. market.