South Korea Sets Record Defense Budget as Seoul Pushes Toward Military Self-Reliance

South Korea will spend more on defense in the coming year than at any point in its history, following a Sept. 3 announcement that the Ministry of National Defense (MND) budget will grow 8.2% to KRW 73.28 trillion — roughly $53.9 billion.

The increase arrives amid a shifting security picture in Northeast Asia and evolving U.S.–South Korea relations, with Washington reportedly scaling back planned combined military exercises. Seoul’s spending plan, according to the MND, aims to shift the military from a troop-centered force toward a high-tech one, while preparing for the transfer of wartime operational control (OPCON) from the United States — a transition Seoul hopes to complete by 2029, after which it would lead its own forces and American troops under the Combined Forces Command in a contingency.

Where the money goes

Funding tied to OPCON preparation is up 35%, and a new wartime information distribution system is planned for the combined command structure. Facing a shrinking pool of conscripts, the government is also reinforcing reserve forces and shifting some noncombat tasks to private contractors.

Unmanned systems feature prominently. Drone-related spending rises nearly 20%, covering swarming drones, reconnaissance platforms, loitering munitions and counter-drone defenses, alongside a program to train some 500,000 personnel in drone operations. Investment in artificial intelligence and ground monitoring systems is also increasing.

Named programs include the L-SAM long-range air defense system and MUAV medium-altitude reconnaissance drones. The KF-21 Boramae fighter — whose first production aircraft are already in assembly — sees its allocation rise nearly 2.5-fold to KRW 3.3 trillion. Nearly KRW 100 billion is earmarked for nuclear-powered submarine work.

Industry angle

Beyond the big programs, the budget directs funding toward emerging technologies — semiconductors, aviation propulsion, hard-kill lasers and quantum systems — plus welfare, pay and housing improvements for personnel. Seoul also wants to grow its small and medium-sized defense suppliers and their export prospects, an area where international defense manufacturers with niche munitions portfolios, such as National Presto Industries (NPK, last $146.52, down 0.81%, market cap about $1.06 billion), compete in a global market increasingly shaped by national rearmament cycles.

What to watch

• Progress toward the 2029 OPCON transition target and associated command-and-control acquisitions
• Milestones in the KF-21 production run and L-SAM deployment
• U.S.–South Korea decisions on the scope of future combined exercises
• Follow-on budget details for the nuclear-powered submarine program and drone force buildout

Source: original release