Hanwha Aerospace signed an agreement with GE Aerospace to domestically produce complete marine gas turbine systems, extending a partnership that has primarily involved component manufacturing for decades.
The memorandum of understanding, announced Oct. 21, covers localization of LM2500 and LM500 engine packages at South Korea’s ADEX defense exhibition. The deal marks a step beyond Hanwha’s current role assembling engines from parts supplied by the U.S. manufacturer.
The Korean firm will now develop integrated modules that combine fuel, cooling, control and reduction systems with the turbine engines, components that currently require imports. The shift reflects Seoul’s broader campaign to reduce foreign supply chain dependencies across its defense sector.
Hanwha has served as GE’s in-country licensee for years, co-manufacturing engine components and providing maintenance for the Republic of Korea Navy’s fleet, which operates over 150 GE marine gas turbines across more than 70 vessels. The LM500 powers patrol boats while the larger LM2500 equips destroyers.
The announcement comes as South Korea pursues localization targets that have proven challenging in practice. The country has struggled to replace imported transmission systems in its K2 tanks despite years of effort, repeatedly failing durability tests and ultimately reverting to German-made components.
South Korea’s defense industry logged 43.1 trillion won ($30.3 billion) in sales last year as demand from Europe and the Middle East surged following Russia’s invasion of Ukraine. The government aims to reach the top four global arms exporters by 2030.
ADEX 2025, which opened Oct. 20 at KINTEX exhibition center, drew 600 companies from 35 countries, making it one of Asia’s largest defense trade shows.