Amid a deteriorating US-Canada relationship, South Korean defense firms are sensing great opportunities. Industry leaders like Hanwha Defense and Hyundai Heavy Industries have presented Ottawa with an ambitious proposal valued between US$20 billion and US$24 billion to modernize Canada’s depleting armed forces.
The proposal includes supplying the Canadian armed forces with submarines, artillery systems, and armored vehicles, providing comprehensive training packages, and helping revitalize the country’s defense industrial base.
Interestingly, the bids by South Korean firms were presented when relations between Canada and the US are undergoing their worst phase, owing to tariff tensions and aggressive threats from US President Donald Trump to annex Canada.
In light of these circumstances, Ottawa is rethinking its historically close defense and security relationship with the US. South Korea, an emerging defense manufacturing powerhouse, is eager to fill the vacuum.
The proposal’s main highlights are the KSS-III submarine, a state-of-the-art vessel developed by Hanwha Ocean and Hyundai Heavy Industries, K9 Thunder self-propelled howitzers, and modern armored vehicles.
The bids by the South Korean defense firms are fully supported by the Seoul government, which is eager to expand its defense partnership with Canada.
According to a report by Canadian media outlet CBC News, the offer also includes setting up local maintenance and manufacturing facilities in Canada and full access to onboard technologies, in stark contrast to generally restrictive conditions aligned with US weapon systems.
The sheer size of the deal, valued between US$20 billion and US$24 billion, could position South Korean defense firms as serious competitors to US defense giants like Lockheed Martin and Boeing.
The Multi-Billion Dollar Defense Deal
The lion’s share of the offer is the submarine deal.
According to the sources quoted by CBC News, the Canadian government has set the timeline to deliver the first submarine by 2035. However, Hanwha Ocean and Hyundai Heavy Industries submitted a detailed, joint presentation worth US$20 billion to US$24 billion, promising to deliver not one but four KSS-III submarines by 2035.
The KSS-III, a 3,700-ton diesel-electric vessel designed for stealth and endurance, is known for its advanced air-independent propulsion system, enabling extended submerged operations for up to three weeks.
South Korea has ordered nine KSS-III submarines for its Navy, to be inducted by the early 2030s.
The KSS-III Batch 1 boats have a crew of 50, displace 3,358 tons surfaced and 3,705 tons submerged, and measure 274 feet long with a 31.5-foot beam. However, Batch 2 and 3 submarines will be bigger.
They are fitted with an innovative vertical launch system (VLS) abaft the sail. The VLS can carry six to ten conventionally armed SLBMs (depending on the variant) for land attack.
The class also carries advanced sensors and weapons, including bow, flank, and towed-array sonars and six 21-inch bow tubes for heavyweight torpedoes, such as the new Tiger Shark.
The South Korean KSS-III submarines, priced at around US$ 1 billion, are also significantly cheaper than the U.S. Virginia-class submarines, which can cost up to US$3 billion per unit.
Separately, Hanwha Aerospace, a sister company to Hanwha Ocean, has offered to supply Canada with advanced artillery systems, including the K9 self-propelled howitzer and K21 infantry fighting armored vehicles.
The K21 is equipped with a 40mm gun capable of firing APFSDS, high-explosive, smoke, and multipurpose munitions, and a 7.62 mm machine gun. It is powered by a 720 hp Doosan D2840LXE V-10 diesel engine and has an anti-tank launcher mounted to the left side of the turret. It has a crew of 3 and can carry nine soldiers.
The K21 is often compared with the US Bradley M2A4, but is significantly cheaper than its US counterpart.
The proposal also offers setting up local maintenance and manufacturing facilities in Canada, which would generate employment and help revitalize the country’s defense industrial base.
South Korea: An Emerging Defense Powerhouse
In recent years, South Korea has emerged as a defense manufacturing powerhouse. Its leading defense firms, such as Hanwha and Hyundai Heavy Industries, have exported weapon systems to key markets, including India, Poland, Australia, Finland, Norway, Estonia, Turkey, Egypt, and many others.
The K9 self-propelled howitzer, manufactured by Hanwha, has been particularly successful in the export market. With more than 1,800 units operating across 11 countries, the K9 dominates over 50% of the global self-propelled artillery market. It has been exported to India, Turkey, Egypt, Poland, Finland, and Norway.
However, no other country is betting more on the South Korean artillery guns than Poland. In 2022, Poland signed a framework agreement with Hanwha to buy 672 K9 howitzers in two different versions.
In 2022, a US$2.4 billion order for 212 K9A1 Thunder howitzers was placed. Subsequently, in December 2023, Poland ordered 152 additional K9 howitzers (6 K9A1 units + 146 K9PL units) for US$2.6 billion.
Beyond the K9, Hanwha Aerospace manufactures a diverse range of advanced military platforms, including the K30 Hybrid BiHo Gun Missile System for air defense, the Redback Infantry Fighting Vehicle (IFV), the Chunmoo multi-caliber rocket artillery system, and the Arion-SMET Unmanned Ground Vehicle (UGV).
Recently, Australia selected Hanwha’s AS21 Redback armored vehicle over German and American competitors in a US$5 billion deal.
While primarily known for its land-based defense systems, Hanwha has also made major contributions to aerospace and aviation technology. The company provides critical components for the FA-50 and T-50 fighter jets, which have been exported to nations including Indonesia, Iraq, the Philippines, Poland, Thailand, and Malaysia.
The South Korean FA-50 light combat aircraft has also won contracts from Poland, Malaysia, the Philippines, Indonesia, and Thailand. Recently, there were reports that Egypt has also selected the FA-50 over the Chinese J-10C in a massive deal for 100 fighter aircraft.
According to the SIPRI 2025 report, South Korea is already among the world’s top 10 biggest arms exporters. The South Korean government has set a target of becoming the world’s fourth-largest arms exporter by 2027. In 2023, the country supplied over US$14 billion worth of defense technology to 12 countries.
If South Korea wins the Canadian submarine deal, it will be a major boost for the emerging defense manufacturing powerhouse.
- Sumit Ahlawat has over a decade of experience in news media. He has worked with Press Trust of India, Times Now, Zee News, Economic Times, and Microsoft News. He holds a Master’s Degree in International Media and Modern History from The University of Sheffield, UK.
- He can be reached at ahlawat.sumit85 (at) gmail.com
