[K-Defense Future Focus]②Weapon Sales Plus Maintenance and Upgrades... The Evolving Market for "Package Deals"

The ongoing war between Russia and Ukraine, as well as the conflict between the United States and Iran, has reconfirmed that victory in modern warfare depends not on the performance of a single weapon, but on the organic integration of various power systems. If drones, missiles, and command-and-control systems are not connected in real time, even the most sophisticated weapon cannot perform to its full potential. The defense export market is following this trend as well.

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According to the defense industry on April 28, the global defense market is showing a trend of restructuring around "integrated military systems." The competitive edge is shifting from the individual performance of weapons to how they can be connected and implemented as a single operational system. Industry insiders are also expressing a sense of the need for this change at the field level.

Former Defense Acquisition Program Administration Commissioner Kang Eunho said, "It is difficult to operate efficiently by simply introducing individual weapons," adding, "Because you have to consider connections with training systems and other weapons, naturally, an integrated system becomes necessary." He continued, "Future defense exports should be package-type deals that include not only weapons but also training and maintenance," emphasizing, "When you consider operation and follow-up support, integrated systems are far more efficient."

This shift has already become mainstream in the global market, with the United States leading the way. Lockheed Martin, for instance, does not simply deliver F-35 fighter jets as airframes. It supplies sensors, munitions, maintenance, and data integration systems as a single package, accompanied by decades-long maintenance and software upgrade contracts. Instead of merely selling weapons, it exports the entire operational ecosystem. While the price of a single F-35 exceeds 100 million dollars, dozens of countries have decided to adopt it. This is because, once incorporated into the system, they are inevitably tied to the supply chain for decades.

Lockheed Martin achieved this status thanks to bold restructuring after the end of the Cold War. During the U.S. Department of Defense-led defense industry consolidation in the 1990s, Lockheed merged with Martin Marietta and later absorbed Northrop's aviation division and General Dynamics' Fort Worth division, scaling up its operations. After securing economies of scale, it focused its investments on research and development to widen its technological lead.

Airbus in Europe followed a similar path. Born from the integration of aerospace defense companies from France, Germany, Spain, and the United Kingdom, Airbus has standardized long-term contracts that cover not only aircraft delivery, but also maintenance, training, and parts supply chains. Its military aviation division, Airbus Defence & Space, dominates Europe's defense market with products like the A400M transport aircraft and Eurofighter. This integration has allowed it to secure a scale of competitiveness that would have been impossible for individual countries.

Amid prolonged wars and rising geopolitical risks, countries now demand not just enhanced military capabilities, but "integrated systems ready for immediate deployment." Contracts are also shifting from a focus on equipment delivery to long-term package deals that include maintenance, training, and data integration. A defense industry insider commented, "There are limits to building systems separately and then trying to piece them together," and added, "If systems are not integrated from the initial design stage, there will inevitably be gaps in operational efficiency and cost competitiveness."

The recent remarkable achievements of K-Defense are also linked to this trend. The export of K2 tanks, K9 self-propelled howitzers, and FA-50s to Poland as a bundled package is a prime example. However, there are concerns that, since these weapons are produced by different companies, there are limitations in establishing an integrated operational system. While the appearance of a package export has been achieved, it differs from a structure that is organically integrated from the initial design phase. This is why more voices are calling for a structural shift from single-item exports to system exports.

Within this trend, the need to establish integrated systems in the defense sector is being increasingly emphasized. If aircraft, missiles, and command-and-control systems are designed and structured together from the outset, both performance and operational efficiency can be significantly improved, according to analysis. Linking development, production, and operation as a single flow is also said to be advantageous in terms of reducing lead times and costs.

However, there are warnings that integration does not automatically lead to competitiveness. Share restructuring or mergers are just the starting point, and there are many hurdles to overcome to achieve real synergy. Integrating the independently developed data systems and operational interfaces of each company into a single system requires considerable time and cost, both technically and culturally. Experts commonly agree that the success of integration depends on how precisely its speed and method are designed.

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