Nuclear, defense industries face uncertainties

South Korea’s nuclear power and defense industries are facing mounting uncertainty amid concerns over potential disruptions to state-backed projects following the National Assembly‘s vote to impeach President Yoon Suk Yeol.

According to industry sources on Sunday, the Korean nuclear sector is increasingly worried about the potential fallout of the Dukovany nuclear power plant project in the Czech Republic due to Korea’s domestic political crisis, with the signing of the main contract scheduled for March 2025, as nuclear power projects typically worth tens of trillions of won often involve strong state-to-state negotiations. “The industry is uneasy due to the uncertainties surrounding the Czech project, with nothing finalized and no contingency plan in place,” an industry insider said, adding that companies are focused on managing their ongoing projects in the meantime.


Despite the political instability, some analysts believe the nuclear power industry will not face significant setbacks. LS Securities Co. analyst Kim Yun-jeong noted that while government support may weaken, a complete nuclear phase-out is unlikely, citing nuclear power’s economic advantages and its critical role in reducing carbon emissions.

The government has also reaffirmed its commitment to the Czech project. Korea Hydro & Nuclear Power Co. (KHNP) stated that all schedules related to the final contract are “proceeding as planned.”

Chung Bum-jin, a professor at Kyung Hee University, echoed this sentiment, emphasizing that the Czech Republic’s urgent need for electricity and KHNP’s superior project timeline compared to its competitors would mitigate any impact from Korea’s domestic political situation.

However, the broader plan to expand the nuclear power sector could be delayed. The Ministry of Trade, Industry and Energy was expected to submit the 11th Basic Electricity Supply and Demand Plan to the National Assembly by the end of 2024. With opposition parties now dominating the political landscape, it seems unlikely that the plan, which includes proposals for the construction of three new nuclear reactors and small modular reactors (SMRs), will be approved without revisions. The government‘s long-term nuclear roadmap to 2050 is also expected to face hurdles.

The defense industry, another key sector that was strongly supported by the Yoon administration, is facing similar challenges. Delays are expected in major weapons procurement and development decisions, following a potential void in government-backed export marketing efforts. Kyrgyzstan’s president even recently canceled a visit to the Korea Aerospace Industries Ltd. (KAI) facilities due to the martial law situation, underscoring the potential fallout of the current political instability.


Heightened competition from foreign defense contractors is further compounding concerns. “Even during routine government transitions, foreign competitors exploit brief slowdowns in export negotiations. This time, the disruption feels far more significant,” an industry expert said.

The Korea’s next-generation destroyer (KDDX) project, previously delayed by disputes between Hanwha Ocean Co. and HD Hyundai Heavy Industries Co., now faces further setbacks. The contractor was originally scheduled to be selected this year, with construction beginning in the second half of 2025. However, with the government’s role in mediating between stakeholders effectively absent, the project remains at a standstill.

Defense exports, which have gained significant momentum, are also likely to be impacted. Hyundai-Rotem Co. was expected to finalize a second contract for K2 tanks with Poland by the end of 2024. However, the recent political emergency in Korea has introduced uncertainties, although Hyundai-Rotem clarified that the delays are unrelated to any government issues.

▶ 오늘의 운세 2024년12월 16일 月(음력 11월 16일)

▶ “金여사까지는 참았는데”…정치성향 밝히기도 부끄럽다는 보수청년들

▶ “이재명 독주 내가 깬다”...차기 대권 위해 일제히 몸푸는 여야 잠룡들

▶ 술에 취한 지도자, 운명에 취한 지도자[노원명 에세이]

▶ 이재명·한동훈 둘다 제쳤다…담 넘은 ‘이 정치인’ 신뢰도 1등