Vietnam has finalized a $680 million deal with Israel Aerospace Industries (IAI) for the purchase of two advanced spy satellites, marking a significant step in Hanoi’s efforts to enhance its surveillance capabilities in the South China Sea amid ongoing tensions with China.
According to sources in the defense industry, IAI will supply Vietnam with an optical imagery photography satellite and a synthetic-aperture radar satellite. These satellites will allow Vietnam to conduct high-resolution surveillance, even under cloud cover or nighttime conditions, a crucial capability given China’s increasing military activities in the disputed maritime region.
The deal comes after years of negotiations, during which IAI faced competition from France’s Thales and U.S. defense giant Lockheed Martin. At one point, Russia also attempted to enter the bidding with a lower-cost alternative. Despite securing the agreement, Israeli defense officials remain cautious, as past negotiations with Vietnam have stalled due to internal disagreements and external pressures from other defense contractors backed by their respective governments.
The Israeli newspaper Haaretz reported that even after the signing, challenges may still arise. A previous memorandum of understanding between IAI and Vietnam fell through last year. Experts attribute such hurdles to Vietnam’s complex political dynamics, where military and political leadership do not always align, as well as concerns over corruption in defense procurement.
Vietnam’s growing interest in Israeli military technology is largely driven by its concerns over Chinese territorial claims and military expansion. The South China Sea remains a flashpoint, with Beijing asserting control over contested islands and engaging in confrontations with neighboring countries, including Vietnam and the Philippines. The new satellite system will provide Vietnam with enhanced intelligence capabilities, helping it monitor Chinese movements in the region.
This deal is part of a broader defense relationship between Israel and Vietnam, with the latter having purchased an estimated $2 billion worth of Israeli military equipment in recent years. Past acquisitions include Rafael’s Spider air defense systems, IAI’s Heron drones, and radar systems from Elta Systems. Talks are also underway for Rafael to establish a Spike anti-tank missile production facility in Vietnam, potentially worth $500 million.
Despite Israel’s robust satellite export business—spanning 23 countries including India, Italy, Morocco, and Azerbaijan—Vietnam’s procurement marks a significant milestone. With Israel’s extensive experience in developing and deploying surveillance satellites, this latest deal further cements its role as a major player in global defense technology.
As for the launch of the satellites, it remains unclear whether Vietnam will utilize launch facilities in Kazakhstan, India, or French Guiana, where Israel has previously deployed satellites for international clients. Regardless of the launch location, this deal underscores Vietnam’s commitment to modernizing its defense infrastructure to counter growing regional threats.
