Hanwha leans on a Czech chassis and a leased plant for its U.S. Army howitzer

Mike Coulter, Hanwha Defense USA's chief executive, expects a U.S. line building at least 48 howitzers a year from some point after 2028 ^[17]. At that rate, delivering the roughly 500 units the program could reach would take about 10.4 years ^[20]. Those 500 units are valued at more than 10 trillion won ^[18], or at least 20 billion won a gun ^[12]. A full-rate year would then be worth about 960 billion won of output ^[21]. The 500-unit figure assumes the program advances to mass production ^[18].

The prototype money is harder to pin down. Bloomberg put Hanwha Defense USA's contract at $262 million, about 350 billion won, for 18 prototypes ^[4]. The same report values the initial contract for six K9MH wheeled howitzers at about 141.7 billion won ^[16]. Divided out, the first comes to about 19.4 billion won a unit and the second to 23.6 billion won ^[13][14], and the program-level 20 billion won falls between them ^[12]. The report does not say whether the six are counted inside the 18.

"The howitzer system consists of five component assemblies," Coulter said ^[5]. The chassis comes from CSG, the Czech Republic's largest defense company, which already exports Tatra models and chassis to more than 10 countries ^[1][3].

Hanwha's owned U.S. capital is going to ships ^[10][11]. Last year it announced an additional $5 billion for its Philadelphia shipyard ^[10]. It has also offered up to $1.2 billion for all of Austal USA, a builder of Navy vessels and modules for nuclear-powered submarines ^[11]. Together the two come to as much as $6.2 billion ^[15]. On land, Hanwha has a three-year lease in Opelika, Alabama ^[8]. A U.S. plant for 155mm modular charges is still only under consideration ^[9].

I think Hanwha is holding the howitzer as an option on the Army's full-rate decision. Most of the prototypes come out of South Korea ^[6], and spending on an owned U.S. plant waits until orders exist. The counter-case is that Opelika is a bridge to something permanent: Coulter tied the 48-a-year figure to a U.S. plant without naming the site ^[17]. If Hanwha bought or built a dedicated howitzer plant before the Army commits to full rate, it would be spending ahead of demand, and the option reading would be wrong.

There is also a second program in play ^[19]. "A K9 variant will also compete to replace the aging M109 Paladin howitzers, and the company has secured a favorable position," said Choi Kwang-sik, an analyst at Daol Investment & Securities ^[19].