Hanwha Group is intensifying its efforts to penetrate the U.S. defense market, the largest in the world. Following its successful export of the K9 self-propelled howitzer, the company is set to inject significant funds into its local defense subsidiaries. This move aims to solidify its business foundation while rapidly expanding into maritime defense centered around the Philadelphia shipyard.
According to industry sources on August 23, Hanwha has decided to invest up to $299 million (approximately 415 billion won) in two U.S. defense subsidiaries. This investment will be made through a capital increase in Hanwha Defense USA, a subsidiary of Hanwha Aerospace, and the investment firm Hanwha Future Proof.
Hanwha Aerospace will contribute $149 million (about 206.8 billion won) to the capital increase of Hanwha Defense USA, acquiring 14,901 common shares in the process. This investment surpasses the total amount of 159.7 billion won that Hanwha Aerospace had previously invested in Hanwha Defense USA.
Hanwha Future Proof is pursuing a capital increase of $150 million (approximately 208.2 billion won), with Hanwha expected to participate fully. Hanwha Aerospace is likely to invest $75 million, while Hanwha Ocean, Hanwha Systems, and Hanwha Solutions will share the remaining amount. This distribution reflects Hanwha Aerospace's 50% stake in Hanwha Future Proof, with Hanwha Ocean and Hanwha Systems each holding 18.75%, and Hanwha Solutions holding 12.5%.
The decision for such a large-scale investment is rooted in Hanwha's strategy for the U.S. defense market. Recently, Hanwha Defense USA signed a contract with the U.S. Army for the development of a prototype for the Mobile Tactical Cannon (MTC) program. The contract includes the supply of six prototypes of the K9 wheeled self-propelled howitzer (K9MH), marking the first export of a domestic weapon system to the U.S.
With this foothold in the U.S. market, the investment is interpreted as a means to enhance local operational capabilities. In the defense industry, a single order can serve as a critical reference for demonstrating the performance and reliability of weapon systems. The intent is to seize additional export opportunities to the U.S. and allied nations, which are now more likely.
To support the MTC contract, a larger working capital and investment resources are necessary. The current contract amount is $10,030,961 (approximately 1.4 billion won), but the estimated cost for the mass production phase could reach 10 trillion won. The U.S. Army has also indicated that there is an option to order an additional 12 units.
Furthermore, Hanwha is expected to rapidly expand into maritime defense. The Philadelphia shipyard, acquired by Hanwha Ocean and Hanwha Systems at the end of 2024, will play a central role in this strategy. The plan includes constructing various combat vessels for the U.S. Navy, including nuclear submarines, through licensing agreements.
Hanwha Defense USA is also considering acquiring the U.S. division of Australia's Austal, which manufactures modules for U.S. Navy vessels and nuclear submarines. In this regard, Hanwha Aerospace stated, "We are exploring various business options to expand our operational base in the U.S.," but added, "Nothing has been confirmed as of now."
An industry insider remarked, "After Poland, news of overseas orders for K-defense has been scarce. In this context, making a large-scale investment would have been a difficult decision."
* This article has been translated by AI.
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