K-Shipbuilding Prepares for New Renaissance with US Production Expansion

Korean shipbuilders are ramping up efforts for the "MASGA (Make American Shipbuilding Great Again) Project" set to begin in earnest next year, pursuing Korea-US shipbuilding cooperation and mutual growth. Major shipyards are accelerating the establishment of US production bases and entry into the MRO (maintenance, repair, and overhaul) market, while domestically strengthening collaboration with small and medium-sized shipbuilders in anticipation of a "K-Shipbuilding" renaissance.

According to the shipbuilding industry on the 18th, Korean shipbuilders have completed preemptive investments and partnership frameworks for US market entry as core partners of the MASGA Project. HD Hyundai (267250.KS) has built a multi-layered cooperation model by signing an agreement with Huntington Ingalls Industries, the largest US defense shipbuilder, for construction of next-generation US Navy logistics support vessels, and establishing a partnership with ECO Shipyard for joint construction of mid-sized container ships in the commercial sector. The company has also partnered with defense technology firm Anduril to target the next-generation unmanned maritime systems market.

Hanwha Ocean (042660.KS) is taking an even more aggressive approach. Through its acquisition of Philly Shipyard, Hanwha Ocean became the first Korean shipbuilder to secure production and maintenance facilities in the United States. The company plans to invest $5 billion (approximately 7 trillion won) to dramatically expand annual shipbuilding capacity from the current 1-1.5 vessels to 20 vessels. It is already achieving tangible results, having consecutively won MRO contracts for US Navy logistics support vessels including the "USNS Wally Schirra" and "USNS Yukon."

Samsung Heavy Industries (010140.KS), a latecomer, is expanding its US business starting with an MRO partnership with Vigor Marine Group in August, followed by a ship design and parts supply agreement with NASSCO shipyard in December. The collaboration with NASSCO notably includes Korean engineering company D'SEC, which is expected to create synergies spanning from design to equipment supply.

HJ Shipbuilding & Construction's (097230.KS) progress is also noteworthy. With proven capabilities in building large transport vessels such as the Dokdo and Marado ships, HJ Shipbuilding signed a mid-life maintenance contract on the 15th with the US Navy's Naval Supply Systems Command and Military Sealift Command for the 40,000-ton dry cargo and ammunition ship "USNS Amelia Earhart." This marks the first time a Korean mid-sized shipbuilder has entered the US Navy MRO market.

Efforts to strengthen the competitiveness of Korea's entire shipbuilding ecosystem are also underway. The strategy aims to elevate the capabilities of the entire domestic shipbuilding industry through mutual growth models, beyond just the trickle-down effects from expanded US orders. Samsung Heavy Industries has established a cooperation model with mid-sized domestic shipbuilders through strategic business agreements, covering consignment production from ship blocks to crude oil carriers.

Hanwha Ocean launched a "Naval Vessel MRO Cluster Council" with 15 companies in the Busan-Gyeongnam region to simultaneously pursue regional economic revitalization and supply chain stabilization. K Shipbuilding is also reviewing the establishment of a worker welfare fund through joint contributions of partial profits with its partner companies.

Korea-US shipbuilding cooperation and "mutual growth management" were key topics in the Ministry of Trade, Industry and Energy's recent presidential briefing. According to the ministry, strategic investment in the US, starting with the shipbuilding industry, will serve as an opportunity to develop models that can return benefits to Korean companies, with plans to establish a hotline for bilateral shipbuilding cooperation. The briefing also included plans to create an export supply chain guarantee program to support regional equipment ecosystems and to actively pursue mutual growth across forward and backward industries by establishing steel-shipbuilding and shipbuilding-shipping cooperation councils.

"The full-scale launch of the MASGA Project will be a decisive turning point for the shipbuilding industry to seize the initiative in global shipbuilding hegemony competition, beyond simply expanding orders," said Choi Kyu-jong, Vice Chairman of the Korea Offshore and Shipbuilding Association. "We are strengthening competitiveness by enhancing cooperation networks with the US while building domestic ecosystem capabilities."