Hanwha Aerospace (012450.KS) has been selected as the sole prototype supplier for the U.S. Army's next-generation Mobile Towed Cannon (MTC) program, a win widely hailed as a milestone for South Korea's defense industry. The achievement carries symbolic weight: South Korea, once a recipient of U.S. artillery support, has become a country supplying artillery to the United States for the first time in 76 years. It also came against the world's top defense firms, including Germany's Rheinmetall, Britain's BAE Systems, the United States' General Dynamics and Israel's Elbit Systems. Analysts credit two generations of steadfast management — Hanwha Group Chairman Kim Seung-youn, who made the bold decision to invest ahead of the curve, and Hanwha Group Vice Chairman Kim Dong-kwan, who led detailed market research and strategy.
The program is a key force-modernization project the U.S. Army is pursuing to replace its aging M777 towed howitzer. Hanwha edged out its global rivals to win the sole prototype supply position on the strength of its automated turret system and proven chassis technology. The U.S. Army had initially sought to develop its own tracked artillery through the Extended Range Cannon Artillery (ERCA) program, but shifted toward adopting wheeled self-propelled howitzers after the war between Russia and Ukraine highlighted the importance of mobile guns capable of firing quickly and leaving their positions.
Analysts also describe the outcome as a strategic victory, crediting Hanwha with reading the U.S. military's shifting needs a step ahead and responding nimbly. Hanwha detected the move toward wheeled self-propelled howitzers early in the U.S. Army's March 2024 budget proposal and launched in-house development of the K9MH that December. After completing basic and detailed design in the first half of 2025, Hanwha finished its first prototype in the first quarter of this year. Roughly a year passed from the start of development to physical production, and the entire development journey took just 30 months. Hanwha said that pace was possible thanks to about 40 years of accumulated technology and investment since it began development in 1989, backed by the government and military authorities.
Two generations of group-level commitment to nurturing the defense business also proved decisive. Chairman Kim spared no support for sweeping investment in the defense sector and for building a network in the United States for exports, guided by the vision and conviction that "even if we fail, that's fine — the technology for self-reliant defense remains." The chairman's dream passed to his eldest son, the vice chairman.
As the war in Ukraine rapidly reshaped the global landscape, the vice chairman sent employees across Europe to gather intelligence and build channels for dialogue that produced export gains, while also making preemptive investments to break into the U.S. market by anticipating the U.S. military's demand for a new self-propelled howitzer.
The acquisition of Philly Shipyard, completed at the end of 2024 under the vice chairman's leadership, is also counted as a major achievement as a bridgehead into the U.S. commercial and defense shipbuilding markets. On the 13th of this month, U.S. President Donald Trump signed a national security memorandum allowing foreign companies that own shipyards in the United States to build up to two vessels in their home countries for a limited time. With Hanwha owning Philly Shipyard, if the company takes on U.S. Navy shipbuilding and also brings the K9 wheeled self-propelled howitzer into mass production, Hanwha would plant its flag in the U.S. defense market on both sea and land at once.
What the industry is watching is less the size of this contract than the follow-on opportunities to come. Given that the U.S. Army typically signs a final mass-production contract for a given model if it passes prototype evaluation without defects, entry into a full mass-production project worth around 10 trillion won ($7.2 billion) is seen as likely. Considering that the U.S. military operates roughly 1,000 M777 units, follow-on production volume is expected to reach several hundred units.
The market places weight on the possibility that the business will expand into follow-on support contracts such as maintenance, repair and overhaul (MRO) and operational training. Securing a supply record for wheeled self-propelled howitzers is another gain. Hanwha has led the global self-propelled howitzer market with its tracked K9, but had no track record with wheeled models. Once it secures a supply record with the U.S. military, the world's largest market, it is bound to gain the upper hand in the global race to adopt wheeled guns, where mobility and transportability are prized. Chang Nam-hyun, an analyst at Korea Investment & Securities, forecast that "market dominance will expand through the U.S. entry of wheeled self-propelled howitzers, in addition to tracked ones, and the expansion of the export pipeline."
Hanwha Aerospace plans to cooperate actively with the government, including the Defense Acquisition Program Administration, to ensure stable supply of the K9MH and to widen its presence in the U.S. defense market. Hanwha Aerospace is currently pursuing a phased localization strategy. In April this year, it signed a three-year lease on an idle plant in Opelika, Alabama, accelerating efforts to secure a local production base.
