HD Hyundai Co., South Korea’s leading shipbuilding conglomerate, has signed an agreement with Huntington Ingalls Industries (HII), the largest US defense shipbuilder, to jointly design and build the US Navy’s next-generation logistics support ships
The deal marks the first time a Korean shipbuilder has agreed to take part in the construction of US naval vessels.
The partnership, signed on Sunday in Gyeongju, southeast of Seoul, the host city of this week’s Asia-Pacific Economic Cooperation (APEC) CEO Summit, also marks a significant broadening of cooperation between the two countries’ shipbuilding industries, which until now has focused on maintenance, repair and overhaul (MRO).
Industry officials see the accord as a key milestone in Seoul’s $150 billion shipbuilding cooperation initiative, dubbed “Make American Shipbuilding Great Again” (MASGA), aimed at revitalizing the US shipbuilding industry.
GATEWAY TO A $30 BILLION A YEAR MARKET
Under the memorandum of agreement (MOA), HD Hyundai and HII will jointly bid for the US Navy’s forthcoming fleet replenishment ship program, and if successful, co-develop the vessel’s design and production plan, the Korean shipbuilder said.
Due to existing legal restrictions, such as the Burns-Tollefson Act, which prohibits foreign ship construction for US naval use, actual assembly would take place within the US.
Fleet support ships, which supply fuel, ammunition and other materiel to warships in operational zones, form the backbone of the US Navy’s logistical modernization drive.
The deal could open a gateway for HD Hyundai into an estimated $30 billion-a-year US military shipbuilding market, as the Navy looks to expand its fleet from the current 296 ships to 381 by 2054, sources said.
“This agreement represents a concrete step toward joint participation in US Navy projects and potential investment to expand our ship production capacity in the US,” said Joo Won-ho, head of affiliate HD Hyundai Heavy Industries Co.’s special ship division. “It demonstrates practical defense-industry cooperation between Korea and the US.”
YEARS OF PARTNERSHIP
Under the MOA, the two groups plan to acquire or build shipyard facilities in the US and to explore supplying modular hull blocks and key components from Korea to HII’s shipyards in Newport News and other US states.
They also plan to create a joint engineering venture and expand collaboration in MRO services for US and allied naval vessels.
The accord builds on years of partnership.
After signing an initial memorandum of understanding in April, HD Hyundai dispatched technical teams to HII’s Ingalls shipyard in Mississippi in October to discuss process integration.
The Korean company has also deepened its US ties this year, including a maintenance contract for the USNS Alan Shepard, a 41,000-ton cargo replenishment ship.
HD Hyundai has a long track record in naval support vessels, having delivered the HMNZS Endeavour and Aotearoa to New Zealand and several Cheonji- and Soyang-class replenishment ships to the Korean Navy.
Eric Chewning, HII’s executive vice president for strategy and development, said the deal marked “an important moment in deepening shipbuilding cooperation between the US and Korea,” adding that the two sides would “work together to revitalize America’s shipbuilding industrial base.”
CHUNG KI-SUN: ‘KOREA IS THE US’ BEST-PREPARED MARITIME PARTNER’
Speaking on Monday at the APEC CEO Summit’s future tech forum under the theme of Shaping the Future of Shipbuilding in Geyongju, HD Hyundai Chairman Chung Ki-sun described the agreement as part of a broader vision to align HD Hyundai with the US’ “new maritime renaissance.”
“We intend to participate actively in the US’ emerging maritime strategy, from next-generation naval fleet construction to the rebuilding of shipyards,” Chung said in his first public speech since he assumed the conglomerate’s chairmanship in mid-October.
He said HD Hyundai is “reviewing various options” for entry into the US shipbuilding market, including potential equity investment or acquisition of US facilities.
“HD Hyundai has successfully built and delivered more than 100 surface vessels and submarines for navies in Korea, the Philippines, New Zealand and Peru,” he said. “We are ready to be a trusted partner in shaping a new era of maritime innovation.”
He also highlighted partnerships with US defense technology firms such as Anduril, noting that “when Anduril’s autonomous mission systems combine with HD Hyundai’s shipbuilding and self-navigation technologies, it will redefine naval operations.”
The chairman said HD Hyundai’s subsidiary Avikus “became the first company in the world three years ago to achieve a fully autonomous trans-Pacific voyage using self-navigation systems.”
With growing geopolitical tension and rising demand for naval logistics capabilities, analysts said HD Hyundai’s latest move could position it as a critical bridge between the US’ naval rearmament push and Korea’s advanced shipbuilding ecosystem, marking a new phase in trans-Pacific defense-industrial cooperation.
By In-Soo Nam
isnam@hankyung.com
Jennifer Nicholson-Breen edited this article.
