Major Korean defense contractors are diversifying their business portfolio into civilian disruptive technology areas such as air taxi, wearable robot, space vehicle and ship energy storage system.

Of 12 disclosed MOUs Hanwha Group’s defense affiliates drew this year, half had been signed by Hanwha Systems with a focus on mobility areas such as urban air mobility (UAM).

Hanwha Systems has developed an aerial vehicle platform since its entry into the UAM market in July 2019. Early this year, the company signed an agreement with Korea Airports Corporation, SK Telecom and Korea Transport Institute to create a UAM-related industrial ecosystem. In May, Hanwha Systems signed a business agreement with U.K. urban air mobility (UAM) startup Skyports to cooperate in developing air taxi infrastructure.

Hanwha Defense, another Hanwha Group defense unit whose main business is to produce and export armored vehicles and self-propelled howitzers, signed three MOUs this year, which are all related to energy storage system for ships. Hanwha Defense appears to make inroads into eco-friendly ESS business for commercial ships based on its proven safety and reliability in battery pack solutions for submarines.

LIG Nex1 is as active as Hanwha companies. It signed 11 business agreements spanning a wide range of areas such as artificial intelligence, 3D printing, and wearable robot. Most of its projects will be carried out with local university and research institutes, suggesting the importance of upgrading weapon systems using disruptive technologies in defense R&D.

New business agreements involving Korea Aerospace Industries (KAI) are more associated with its mainstream business compared with Hanwha and LIG Nex1. KAI signed an MOU with KAIST late March to establish an aerospace technology research center. Under the MOU, the two will cooperate in the development of satellite system software and future vehicle technology. In April, KAI and Seoul National University agreed to establish a future aviation research cluster. Overseas, KAI is cooperating with Israel`s leading defense companies, IAI and ELBIT, on manned-unmanned teaming (MUT) and next-generation UAV project`, respectively. KAI`s future air vehicle and unmanned aerial vehicle projects are likely to expand into UAM business in the future.

By Lee Yu-sup and Minu Kim

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