Could Korea's K9 bid in Spain influence subsequent deals with Poland, Romania?

A potential sale of Korea's K9 Thunder howitzer to Spain, part of a roughly 7.2 billion euro ($8.2 billion) artillery modernization, could set a template for how the country structures future arms exports, including follow-on deals with Poland and Romania.

The format under discussion goes beyond shipping finished howitzers. Spain has demanded a deeper form of local production — led by a Spanish contractor rather than Hanwha Aerospace — with a transfer of intellectual property and design authority and rights to export to third countries.

The shift comes as more buyers now look to build up their own defense industries, and as the absence of an imminent threat of the kind that drove Poland's rapid purchases over recent years leaves them room to negotiate for technology rather than speed.

Poland is in talks over localized production of its own K9 variant, and in Romania, Hanwha Aerospace broke ground in February on its first European production plant, where 36 of the 54 howitzers Bucharest ordered are to be built with up to 80 percent local content.

The structure also carries risks that will shadow every deal after it: that transferred technology could feed a future competitor, and that Korea's export standing in Europe might narrow in the future as buyers learn to build the gun themselves.

Details of technology transfer and local production are under discussion between Hanwha and Indra, Spain's largest state-backed defense company, with the contract expected to be signed in the second half of this year. 

Selling the ability to make the gun

The Spanish deal's format is rather direct in its ambition: Spain might be buying not Korean howitzers but the ability to design, build and maintain its own. Earlier buyers localized in part, Poland folding its own systems into guns whose design remained Korean, Turkey licensing technology for a single generation, and the difference here is that the design authority itself is on the table.

Spain's army still fires M109 howitzers, U.S.-designed guns in service since the 1970s. To replace them, the Defense Ministry in December awarded a tracked-artillery program worth 4.55 billion euros, including tax, to a consortium of Indra and Escribano Mechanical & Engineering.

In March, Hanwha and Indra signed a binding memorandum in Madrid, attended by Hanwha chief executive Son Jae-il and Indra chairman Ángel Escribano, making the K9 the base of Spain's next howitzer. The program covers 128 tracked guns for the Army and Marines, plus ammunition resupply, recovery and command-and-control vehicles.

Indra will reportedly design, develop and build the vehicles at its plant in Gijón, in northern Spain. Production is to be phased, with an initial short series arriving from Korea while Indra engineers train there, then Spanish manufacturing rising to fully Spanish-made components, the Spanish defense outlet Infodefensa reported.

The contract's paper trail surfaced in Seoul last week. Hanwha disclosed a supply contract worth at least 667.6 billion won ($454 million) on July 27, identifying neither the buyer nor the goods and saying the counterparty had requested confidentiality. The defense industry widely read the filing as tied to the Spanish program.

"The main contract for Spain's self-propelled howitzer project is expected to be signed in the second half of the year, while discussions on Poland's third K9 contract are likely to make progress," said Jang Nam-hyun, an analyst at Korea Investment & Securities, in a report expressing a positive outlook for Hanwha Aerospace.

Four days before the filing, the chief executive of Indra was asked at an earnings presentation why the artillery program had gone quiet.

"We are fully committed and determined to carry out the project together with Hanwha," Josep Maria Recasens said, denying any conflict.

Korean and Spanish reporting in March said the agreement gives Indra design authority over the K9 platform and the intellectual property of the system, letting it develop a Spanish variant that need not even carry the K9 name.

Global Economic reported on July 22 that the structure is a long-term license, with Hanwha keeping ownership of the intellectual property rather than handing it over outright, and that Hanwha holds a right of prior consent over any new partner that would gain access to core technology and drawings.

That reporting sits somewhat at odds with how Hanwha itself describes the deal, not in outright contradiction, but in how settled it makes things sound.

"At the memorandum stage, the idea was to negotiate and settle where the transfer begins and ends," a Hanwha Aerospace spokesperson said. "Nothing has been decided about its exact scope." The spokesperson added that partial transfers of intellectual property exist in many defense deals and that focusing on the transfer terms is premature while the final contract remains unsigned.

Two readings in Seoul

There have been different readings of the deal, with earlier reporting saying Indra would take the K9's design authority and intellectual property outright, and later reporting scaling the transfer back to a long-term license under which Hanwha keeps ownership.

Between those two versions sit the questions that will define the deal's legacy. A transfer that runs too deep risks leaking core technology into a gun Korea will one day compete against.

A Spanish variant with export rights could crowd Korea out of European competitions it now dominates, a market where Korea has become the second-largest arms supplier to European NATO members, providing 8.6 percent of their imports in 2021 to 2025 behind only the United States, according to the Stockholm International Peace Research Institute, and where the K9 holds roughly half the world's export market for 155-millimeter self-propelled howitzers by Hanwha's own estimate.

The deeper the transfer, the smaller the share of each gun's value that flows back to Korea, a margin question that grows with every buyer who asks for the Spanish terms. Whether that exchange is progress or peril divides the people who watch it.

A veteran defense industry adviser, who spoke on condition of anonymity, said Spain's military-industrial sophistication means it was never going to buy Korean guns whole.

"Spain is a far more advanced military power than we assume. It will absolutely not buy the K9 as a finished product," the adviser said, predicting Spain would keep components where it holds an edge, such as fire control, and take Korean modules for the rest. The tell, the adviser said, will be Hanwha's export approval filing with Korea's arms procurement agency, which must specify whether finished howitzers or individual modules are leaving the country.

The adviser called the deal good and bad at the same time. "There is clearly economic benefit, value we can capture,” the adviser said. “The question is how much of our technology gets drawn out in exchange.”

Korea has been burned that way before. Turkey paid in 2001 — when the K9 was unproven — for hull, turret and fire-control technology it used to build its own T-155 Fırtına, a gun that now competes against Korea abroad, and later bought Korean tank technology to produce its own Altay.

Choi Gi-il, a professor of military studies at Sangji University, argued the arrangement is less novel than it looks. Korea contracted with a Polish state defense firm in that program too, he noted, and Korean weapons are routinely reworked to a buyer's specifications: for example, the tailored versions of the FA-50 fighter and Chunmoo rocket artillery for Poland.

"Localizing and modifying to meet local demands is how we have always done this," Prof. Choi said. "Korean weapons are built to NATO standards from the start, so NATO localization goes without saying."

Poland's own arc supports both readings at once: Hanwha began there supplying hulls to a local maker for the Krab and ended up with orders for hundreds of complete Korean-built guns, the largest K9 order anywhere, while Poland folded its Topaz fire-control system into guns whose design remained Korean. The significance of Spain, in Choi's reading, is geographic: it would be the K9's first foothold in Southern Europe.

Jang Won-joon, an associate professor specializing in the defense industry at Jeonbuk National University, said the outcome turns on the terms still open. "Whether the contract comes together depends on how far Hanwha will go in providing design and manufacturing technology for the hull and core components, systems integration authority, intellectual property and rights to export to third countries," Prof. Jang said.

The Madrid complication

The negotiation is proceeding inside a crowded and quarrelsome Spanish defense ecosystem, and two of its players are pulling at the deal from different directions.

One is Sapa, a Spanish transmission maker that holds about 8 percent of Indra and wants its own gearbox in the Spanish K9 in place of the U.S. Allison unit. An opinion piece published by Spanish outlet Escudo Digital reported that the swap would force a redesign of engine management, cooling, hull structure and control software, and argued the demand looks more political than technical.

The other is Santa Bárbara Sistemas, the Spanish subsidiary of U.S. General Dynamics, which sells a direct K9 competitor, its Ascod-based Nemesis. Indra tried to buy Santa Bárbara outright; General Dynamics refused, and, after being left out of the December awards, Santa Bárbara went to court against the process and the 3 billion euros in zero-interest state loans behind it.

The legal front has since cooled under pressure from the Spanish state, which owns 28 percent of Indra: the Spanish Defense Ministry dismissed the company's appeal in April, and on July 16, Santa Bárbara asked the Supreme Court to suspend its challenge while it negotiates entry into the programs, reportedly through a joint company with Indra's land-vehicles division.

For Hanwha, that peace cuts both ways. Spanish analysts consider it unlikely the company would accept a principal competitor gaining access to K9 design data, and its reported consent right exists precisely for that moment, but as a supplier to Indra rather than the prime contractor, an arrangement Korea has used with India's Larsen & Toubro but never before in Europe, its leverage over who joins the program is thinner than in a direct government contract.

“Cooperation between Indra and Santa Bárbara appears unlikely at present according to my sources,” an industry source said.

Three things will reveal where this lands: the export-approval filing that shows what actually leaves Korea, the final contract that fixes the license's scope and whether Santa Bárbara's entry ever reaches the point of requiring Hanwha's consent. Korea built its arms boom selling finished weapons at speed and scale. Spain is asking for something deeper, and the price Hanwha sets for it will be studied by every European buyer that comes next.

BY KIM MIN-YOUNG [kim.minyoung5@joongang.co.kr]