LIG Nex1 edges out Hanwha to lead S.Korea’s ‘Iron Dome’ project

South Korea’s LIG Nex1 Co. will lead development of the country’s next-generation missile defense system, beating out longtime rival Hanwha Systems Co. in a key government procurement race.

The Defense Acquisition Program Administration (DAPA), South Korea’s state arms procurement agency, last week awarded LIG Nex1 leadership over eight development programs tied to Cheongung III, a roughly 3 trillion won ($2.2 billion) project to build an upgraded mid-range surface-to-air missile (M-SAM) system, according to people familiar with the matter on Sunday.

The system, part of South Korea’s effort to build a homegrown version of Israel’s Iron Dome, is expected to significantly enhance the country’s ability to intercept ballistic missiles and other airborne threats from North Korea and beyond.

LIG Nex1 will develop and produce the engagement control system, or ECS, the command-and-control unit that determines how and when to intercept incoming targets. The company will also build missiles.

Hanwha Systems, in partnership with sister firm Hanwha Aerospace Co., will take charge of radar and launcher development – roles it held in the current-generation Cheongung II system.

Other South Korean defense contractors will support the development of the remaining system components.

The decision cements LIG Nex1’s dominance in ECS technology, dubbed the brain of modern missile defense systems, despite Hanwha’s earlier push to challenge that position.

The two companies performed nearly neck-and-neck in missile tests, with LIG Nex1 narrowly winning the bid by a margin of just 0.1 point, according to people familiar with the results.

UPGRADED SYSTEM WITH BROAD REACH

Cheongung means heaven’s bow in Korean, and the Cheongung III is an enhanced version of the current Cheongung II system, which employs the so-called hit-to-kill technology to destroy targets via direct collision. 

The new version is expected to offer five times greater engagement capability and cover four times the area of its predecessor.

Once operational, the system will be able to intercept targets at altitudes of up to 15 kilometers and ranges of 40 kilometers, aided by advanced radar capable of simultaneously tracking multiple threats, including aircraft, cruise missiles and ballistic missiles.

The latest Cheongung II system has been exported to the United Arab Emirates and Saudi Arabia, elevating it to one of South Korea’s most successful defense exports alongside the K9 self-propelled howitzer.

KEY PILLAR OF KOREA’S MISSILE SHIELD

Cheongung III is a core part of South Korea’s Korea Air and Missile Defense, or KAMD, a multilayered system designed to defend against North Korean missile threats.

The KAMD includes long-range SAMs (L-SAMs) capable of intercepting missiles at altitudes of 40 to 150 km, as well as shorter-range systems like the Cheongung series and low-altitude missile defense (LAMD) units covering up to 5 kilometers.

South Korea plans to complete the development of Cheongung III by 2034, with the system fully integrated into the national missile defense network.

Seoul is accelerating efforts to enhance its missile shield amid a growing threat from Pyongyang and rising global interest in missile defense, spurred by the wars in Ukraine and Gaza.

In a related effort, South Korea last October approved a 1.9 trillion won plan to upgrade its Patriot missile batteries with PAC-3 interceptor technology by 2031.

LIG NEX1 TEAMS UP WITH HD HYUNDAI IN SUBMARINES

LIG Nex1 has also won a project to upgrade KSS-II, or Jangbogo-II, class attack submarines in partnership with HD Hyundai Co., beating Hanwha Ocean Co., which collaborated with Hanwha Systems.

South Korea's Navy will spend about 500 billion won to upgrade 20-year-old or older submarines with the latest technology.

LIG Nex1’s proprietary sonar system is said to have played a key role in landing the deal, according to sources.

Write to Jin-Woo Park at jwp@hankyung.com

Sookyung Seo edited this article.