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| launch of a Gray Eagle STOL from the Republic of Korea Navy (RoKN) amphibious landing ship ROKS Dokdo while at sea near Pohang. |
Hanwha Aerospace and GA-ASI Partner on Gray Eagle STOL UAV Development
SEOUL, April 4, 2025 – South Korean defense giant Hanwha Aerospace announced a strategic partnership with General Atomics Aeronautical Systems, Inc. (GA-ASI) on April 2, committing over ₩750 billion (US$513 million) to develop and manufacture the Gray Eagle short take-off and landing (STOL) unmanned aerial vehicle (UAV) for the global defense market.
SIDEBAR: Hanwha Aerospace – South Korea's Emerging Defense Powerhouse
Hanwha Aerospace has established itself as South Korea's premier defense company, achieving unprecedented financial milestones in recent years. In 2024, the company recorded total revenue of ₩11.25 trillion (US$7.74 billion), a 43% year-on-year increase, with operating profit surging 190% to ₩1.72 trillion (US$1.18 billion) according to their regulatory filing released in early 2025. This made Hanwha the first South Korean defense firm to exceed ₩10 trillion in annual revenue and ₩1 trillion in operating profit.
The company's defense division has been its primary growth driver, generating approximately ₩7 trillion (US$4.82 billion) in revenue and ₩1.57 trillion (US$1.08 billion) in operating profit in 2024 according to company reports. A key milestone was reached when Hanwha's exports surpassed domestic sales for the first time, with exports amounting to ₩4.4 trillion (US$3.03 billion) compared to domestic sales of ₩4 trillion (US$2.75 billion).
Hanwha Aerospace has gained significant international recognition for its land defense systems, including the K9 self-propelled howitzer, Chunmoo multi-caliber rocket artillery system, and Skyfall 120-millimeter self-propelled mortar system which have been cited as driving the company's strong performance. The company has secured major defense contracts in Europe and other regions, with Polish President Andrzej Duda noting that South Korean partners could "supply high-quality weapons within a few months" during his visit to NATO earlier this year.
Beyond defense, Hanwha Aerospace is also making strides in the space sector. In April 2024, the Korean government selected the company as the system integrator for developing the next-generation space vehicle called KSLV-III which aims to complete a lunar mission by 2032. This project builds on previous successes, including South Korea's indigenous space vehicle Nuri (KSLV-II), which successfully put a 1.5-ton satellite into orbit in June 2022.
The partnership with GA-ASI to develop the Gray Eagle STOL represents Hanwha's strategic move into the unmanned aircraft systems market, which is projected to reach approximately ₩5 trillion (US$3.42 billion) globally by 2040 according to industry projections noted by the company. This expansion aligns with Hanwha's vision of unmanned systems as "a strategic pillar for the future of defence" as stated by Kim Dong Kwan, Vice Chairman of Hanwha Group.
The partnership represents Hanwha's ambitious entry into the unmanned aircraft systems market, which industry analysts project could reach approximately ₩5 trillion (US$3.4 billion) globally by 2040. The companies aim to achieve the first flight of their jointly developed UAS by early 2027.
"Hanwha Aerospace views unmanned systems as a strategic pillar for the future of defense," said Kim Dong Kwan, Vice Chairman of Hanwha Group. "Through our collaboration with GA-ASI, we aim to strengthen sovereign defense capabilities, expand Korea's presence in the global UAS market, and contribute to a more robust ROK-US alliance."
The collaboration builds on a successful flight demonstration conducted in November 2024, when the companies launched a Gray Eagle STOL from the Republic of Korea Navy (RoKN) amphibious landing ship ROKS Dokdo while at sea near Pohang. During the hour-long flight, the air vehicle was assembled on board the ship, accessed the flight deck using the vessel's aircraft elevators, and conducted a simulated landing operation.
GA-ASI CEO Linden Blue, who supervised the demonstration, expressed enthusiasm about deepening business ties with Hanwha. "Our test flight with Gray Eagle STOL was well-received by the Republic of Korea Navy and we know Hanwha is ready to invest to grow a UAS business with GA-ASI in Korea and the US."
The Gray Eagle STOL, previously known by GA-ASI's internal codename Mojave, is the only medium-altitude, long-endurance aircraft of its kind capable of operating without a catapult or arresting gear from flight deck equipped warships such as aircraft carriers. With a payload capacity of 1.6 tons, it can perform various missions including reconnaissance and attack operations, depending on equipment configuration.
Hanwha's investment includes development and production facilities for both the Gray Eagle STOL and UAS engines, with infrastructure planned for South Korea and the United States. The company aims to create jobs by recruiting talent in relevant fields and develop a domestic UAS industry ecosystem in Korea by identifying local component and material supplier companies.
The partnership comes as South Korea's Ministry of National Defense is evaluating the Gray Eagle for its ability to meet emerging military requirements.
How Trump's recent tariffs might affect this deal.
President Trump has imposed a 25% tariff on South Korea as part of his sweeping "reciprocal tariffs" announcement on April 3rd, which has triggered fears of global trade wars and economic disruption. These tariffs are set to take effect on April 9, 2025, according to the White House.
The partnership could be affected in several key ways:
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Increased costs for components: South Korea's acting President Han Duck-soo has called for urgent talks with U.S. officials to shield their export-reliant economy from the impact of these tariffs and has ordered emergency support measures for businesses. The production of Gray Eagle STOL UAVs, which will rely on components and technologies from both countries, may face higher costs.
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Defense industry exemptions: It's not yet clear if defense partnerships like the Hanwha-GA-ASI deal might receive exemptions from these tariffs. The White House fact sheet mentions that certain goods will not be subject to the Reciprocal Tariff, including some products related to national security, though specific defense partnerships aren't explicitly mentioned.
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Strategic alliance considerations: Some analysts worry that tariffs against allies like South Korea could weaken security partnerships, possibly forcing countries to "reassess the reliability of U.S. security commitments," according to Seth Jones from the Center for Strategic and International Studies.
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Potential negotiated solutions: Rather than retaliating, South Korean officials have signaled they are seeking to negotiate with the U.S., which could potentially lead to exemptions or modifications for strategic industries like defense. South Korea might make concessions in other areas to protect defense cooperation.
The timing is particularly challenging as South Korea is dealing with a leadership vacuum while waiting for the Constitutional Court to rule on whether to permanently remove or reinstate President Yoon Suk Yeol after his impeachment.
Given the strategic importance of defense partnerships and the role they play in regional security, there may be efforts from both sides to shield this specific collaboration from the full impact of these tariffs, but this remains uncertain until further announcements are made.
Sources:
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uasvision.com - Korea's Hanwha Aerospace Partners with GA-ASI on Gray Eagle STOL UAV
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Asia Pacific Defence Reporter - Hanwha Aerospace, GA-ASI partner on unmanned aircraft systems
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Unmanned Systems Technology - Gray Eagle STOL Conducts First Ship-to-Land Flight in South Korea
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Naval Technology - Hanwha to enter UAS market with GA-ASI partnership
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Vertical Mag - Hanwha Aerospace and GA-ASI partner for unmanned aircraft systems
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General Atomics - Gray Eagle STOL Makes Historic First Flight From Ship To Land
