HD Hyundai Heavy Industries and Hanwha Ocean (042660.KS), which had pledged a "One Team" approach for K-defense in the maritime sector, have split over competition for the Royal Thai Navy's next-generation 4,000-ton frigate procurement project, worth approximately 800 billion won ($580 million). Because the deal goes beyond a simple vessel export to encompass a comprehensive package combining local production and maintenance, repair and overhaul (MRO) — covering four frigates worth up to 3 trillion won ($2.17 billion) — tensions between the two companies have been running high from the start.
HD Hyundai Heavy Industries participated in D&S 2025, unveiling three latest export-oriented frigates in the 3,000-4,000-ton class. The "HDF-3200" has been delivered to the Philippine Navy, where its combat performance and operational reliability have been proven. The "HDF-3600" is currently being jointly built with Peru's state-owned SIMA shipyard. The "HDF-4000" is based on the Chungnam-class (Ulsan-class Batch-III), the Korean Navy's newest frigate model.
Hanwha Ocean also showcased the "OCEAN-40F," a 4,000-ton export-oriented frigate, at D&S 2025. It is the latest frigate model Hanwha Ocean has proposed to the Royal Thai Navy. The frigate is equipped with state-of-the-art sensors and stealth technology, significantly enhancing its combat and surveillance capabilities. Hanwha Ocean is also highlighting its successful delivery of the frigate "HTMS Bhumibol Adulyadej" to Thailand in 2018.
Contrary to the government-led "One Team for Vessel Exports" policy, the two companies must compete independently in this project. Why did the One Team break apart? The Thai Navy has emphasized that this is a "package-type defense project," requiring at least 20% local construction and technology transfer. The official explanation is that Thailand requested both companies to participate individually, creating a competitive bidding structure.
For this reason, Hanwha Ocean has gone on the offensive by signing a series of technology cooperation agreements for combat systems for Thai export frigates with global companies rather than Korean defense firms. It has signed a memorandum of understanding (MOU) with French shipbuilder Naval Group, making a decisive move to install Naval's integrated combat management system (CMS) on the frigate.
Going further, Hanwha Ocean has joined hands with MBDA, Europe's largest missile maker, to cooperate in naval missile systems for the frigate. It also signed an MOU with British defense company Cohort to cooperate across broader defense capabilities, including sonar systems, torpedo launchers, surveillance and strike control systems, and communications management.
By contrast, HD Hyundai Heavy Industries is strengthening cooperation with domestic defense firms for K-defense exports even as it targets the global market. For this project, HD Hyundai Heavy Industries has partnered with LIG Nex1 D&A. LIG D&A signed a contract worth approximately 60 billion won ($43.5 million) with HD Hyundai Heavy Industries for the Peruvian Navy vessel project in 2024, supplying core equipment such as combat systems, electronic warfare systems and data links.
HD Hyundai Heavy Industries and LIG D&A recently set up a joint booth at the Sea Air Space Exposition (SAS 2026), the largest U.S. maritime defense exhibition held in Washington, D.C., emphasizing their global partnership in the maritime defense market. HD Hyundai Heavy Industries presented its advanced Aegis destroyer and future combat vessels, while LIG D&A featured its 2.75-inch Poniard guided rocket.
Some critics argue that the Defense Acquisition Program Administration (DAPA) should have led a "Vessel Export One Team" approach for the Thai project. The concern is that, as in the Australian frigate bid in 2024, competition between domestic firms could result in a lost contract. Six global shipbuilders from countries including Korea, Singapore, Turkey and Spain are participating in the Thai frigate project. Only Korea has a situation where domestic companies must compete against each other.
Regarding the controversy, DAPA's position is that the Thai frigate project does not fall under the Vessel Export One Team framework. "Forming a One Team for successful K-defense maritime exports requires a certain level of project size, and the Thai frigate project was not included when the One Team MOU was signed," a DAPA official said. "There is also the fact that the Thai government requested that both companies participate separately."
