Market Data 
- South Korean and Japanese arms dealers are growing almost on pace with Russia’s top defense firms.
- New data found that South Korea’s and Japan’s arms revenues jumped by 39% and 35% respectively.
- The data underscores an aggressive push by Asian firms to fill recent gaps in arms manufacturing.
The top defense manufacturing firms in both South Korea and Japan saw growth rates of nearly 40% in 2023, nearly on pace with that of the top arms dealers in Russia, per a new report.
Data published on Monday by the Stockholm International Peace Research Institute found that the top four South Korea-based firms recorded a combined 39% increase in revenue over the year, while the top five Japanese defense firms saw a combined 35% increase.
In comparison, the two top Russian defense enterprises saw a combined 40% revenue increase from 2022 to 2023 and higher revenues. SIPRI attributed the production spike to the huge expenditures required by Russia’s invasion of Ukraine.
The institute analyzed public data on the world’s top 100 defense firms by revenue and found that arms revenues across all regions increased by 4.2% in 2023.
Its findings show how rapidly defense industries in Japan and South Korea — two key US allies — have stepped in to fill demand for arms and equipment since the outbreak of recent conflicts like the Ukraine war. The five largest US arms makers top SIPRI’s list, but saw slower rates of growth.
Still, Xiao Liang, a researcher at SIPRI, told Business Insider the data doesn’t directly translate into military might.
“The true scale of Russia’s arms industry is likely a lot larger, so the data presented provides only a general overview and not a detailed representation of the current state of the Russian arms industry,” he wrote in an email.
Arms sales take off in South Korea and Japan
South Korean firms, in particular, have caught attention in the last two years for selling billions of dollars worth of artillery in Europe, where it’s been in short supply due to Ukraine’s dire need for ammo to counter Russia’s firepower advantage.
Among the four South Korean companies on the list are industrial heavyweights such as the Hanwha Group and Hyundai Rotem.
“South Korean firms specialize in tanks, artillery, and armored vehicles, with both domestic and international export deals boosting revenue,” Liang wrote.
These companies are typically known for producing weapons systems like the K239 Chunmoo rocket artillery system and the K9 howitzer. Poland, for example, purchased 72 K239 Chunmoo systems in April for $1.6 billion; these truck-mounted launchers can fire guided or unguided rockets.
Hanwha Group rose from 42nd place in the world in 2022 to 24th in 2023. It brought in $5.71 billion in arms revenue in 2023, up 52.7% from $3.74 billion in 2022, per SIPRI.
According to SIPRI, much of the Seoul-based conglomerate’s arms revenue was driven by its 2023 acquisition of one of South Korea’s three biggest shipbuilders, DSME.
Five Japanese firms were listed among the world’s top 100 defense firms. They include Mitsubishi Heavy Industries, which saw a 23.9% increase in arms revenue to $3.89 billion in 2023, and Fujitsu, which saw a 16.4% increase to $1.85 billion that year.
Liang said Japan’s defense industry has benefited from a major increase in Tokyo’s military spending policy. “Domestic orders for advanced systems have soared, further driving revenue growth,” he said.
Mitsubishi Heavy Industries, for example, builds submarines and aircraft for Japan’s forces, and saw new orders triple in 2023, Liang added.
Russia still leads in absolute figures
Still, the combined arms revenues of all nine Asian firms — about $21 billion — are eclipsed by the $25 billion in 2023 earnings reported by the Russian arms makers that SIPRI analyzed.
The institute didn’t account for seven of the Russian enterprises that it listed in the Top 100 for 2022, saying that at this time, their “individual revenue data could not be obtained.”
Liang wrote that the Russian defense industry has become increasingly opaque and that two major state-controlled firms — antiaircraft system maker Almaz-Antey and the Tactical Missiles Corporation — were no longer sharing their revenue data.
“Both companies probably have seen a significant rise in their revenue as they produce equipment categories in high demand due to the war such as air defense systems, artillery and missiles,” Liang wrote.
SIPRI did cover two Russian state-owned firms: United Shipbuilding Corp and Rostec, a giant defense conglomerate that ranked seventh worldwide and oversees many arms producers.
SIPRI analysts said they normally wouldn’t include data from Rostec, but listed it this time because it controls many of the arms manufacturers they could no longer gather data on.
The state-owned entity controls manufacturing for aircraft, electronic warfare systems, helicopters, and battle tanks.
Rostec’s arms revenue grew 49.3% in 2023 to $21.7 billion, up from $14.5 billion in 2022, per SIPRI.
Meanwhile, United Shipbuilding Corp, which owns about two dozen shipyards and plants across Russia, paced behind the global revenue growth rate. It earned $3.7 billion in arms revenue in 2023, just 1.9% up from 2022.
