South Korean air defense stocks surge on Middle East demand

June 5 (Asia Today) -- South Korean defense stocks are surging as Middle Eastern countries press for faster deliveries of Korean-made missile defense systems following recent combat use in the Iran conflict, defense industry officials said.

South Korean defense companies have completed contracts worth a combined 9.5 trillion won, or about $6.2 billion, to supply the Cheongung-II medium-range surface-to-air missile system to countries in the Middle East, including the United Arab Emirates. Other countries in the region are in the final stages of purchase negotiations, officials said.

If completed, the deals would link several major Middle Eastern countries into what industry officials describe as a "K-air defense belt."

Middle Eastern buyers are asking Seoul to move them up in the delivery queue, according to regional sources.

"They are saying they will pay more if South Korea can send the guided missiles sooner," one source said.

Defense analysts said the rush is not only about price. The Cheongung-II costs far less than the U.S.-made Patriot system while offering strong reliability, they said. The system reportedly recorded a 99% interception rate against ballistic missiles and a 93.7% rate against drones during recent clashes involving the United Arab Emirates and Iran.

The main challenge is production capacity.

LIG Defense & Aerospace, which handles system integration for the Cheongung-II, and Hanwha Systems and Hanwha Aerospace, which supply radars and launchers, are running factories around the clock. Even so, industry officials said current capacity is not enough to meet simultaneous demand from Poland and three to five Middle Eastern countries.

The supply bottleneck has become a major obstacle for South Korea's defense industry as global demand rises.

LIG's Bigung guided rocket, also known as Poniard, is another precision-guided weapon drawing attention. The system passed final testing under the U.S. Defense Department's Foreign Comparative Testing program, raising expectations for possible U.S. exports.

Bigung is a 2.75-inch, or about 70-millimeter, guided rocket system jointly developed by South Korea's Agency for Defense Development and LIG Nex1. It was originally designed to strike North Korean high-speed hovercraft used in amphibious assault operations.

Military analysts and defense industry officials said the system could also be well suited for coastal defense in the Middle East, including around the Strait of Hormuz.

-- Reported by Asia Today; translated by UPI

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This story was originally published June 5, 2026 at 6:11 PM.