KJ Huang

Asia’s defense awakening: Higher domestic spend, more exports

TJ Thornton, Chris Oberoi, KJ Huang, Ron Epstein

Asia's defense sector is pivoting from a primary importer to a manufacturing exporter, with regional spending reaching $573 billion in 2025 as nations like South Korea and Japan expand domestic production capacity. South Korea has emerged as a key beneficiary of this shift, driving a 24% export surge and diversifying sales to Europe and the Middle East while navigating potential collaboration with the United States on naval construction and supply chains. Analysts project that strong order backlogs and geopolitical instability will sustain earnings growth for Asian defense contractors through 2030, despite ongoing U.S. restrictions on direct munitions purchases.