Hanwha Aerospace Co., a leading South Korean defense company, has partnered with Kosdaq-listed tech firm ITM Semiconductor Co. to jointly develop batteries for submarine exports, industry sources said on Thursday.

Hanwha was selected to develop a lithium-ion battery system for subs last year as part of a government-backed project. The defense firm has picked ITM, which also designs battery management systems (BMS), as a developer of under-sea battery trays.

Submarines typically need to charge lead-acid batteries and manipulate propulsion motors to operate. Next-generation submarines use lithium-ion batteries that feature shorter recharge times and higher energy density to allow the ships to stay underwater longer.

Hanwha and ITM will focus on reducing the size and weight of the battery packs while increasing their stability.

Hanwha Ocean Co., Hanwha Group’s shipbuilding affiliate, has recently won orders for 3,000-ton submarines that provide more than three times the diving time of ships that use lead-acid batteries. Hanwha Aerospace is likely to supply the lithium-ion battery packs to the new submarines, sources said.

ITM is ramping up its business in BMS, which eliminates battery explosion risk by controlling voltage and currents. The technology ensures the safety of lithium-ion batteries used in submarines and automobiles.

The company, which specializes in protective circuit modules for battery packs, has been expanding its business in smartphones, robotics and heat-not-burn cigarettes.

ITM posted 604.9 billion won ($459.5 million) in revenue and 9.2 billion won in operating profit in 2022. Market watchers expect the company’s business in the defense sector to generate more than 200 billion won in revenue annually.

Following development, mass production of the submarine batteries will become ITM’s stable revenue source, said CEO Na Hyuk-hwi. The company will continue to grow by developing battery packs in a variety of defense fields, the chief executive added.