Washington’s policy shift opens a new front for HD Hyundai and Hanwha Ocean in the US naval market
President Lee Jae Myung (seated, fourth from left) listens as Hanwha Group Vice Chair Kim Dong-kwan delivers welcoming remarks during the naming ceremony for the TS State of Maine at Hanwha Philly Shipyard in Philadelphia on Aug. 26, 2025. (Newsis)
The decades-old rivalry between HD Hyundai and Hanwha Ocean is moving across the Pacific, as the two shipbuilding giants race for a much bigger prize: entry into the US naval shipbuilding market.
Hanwha has seized an early lead. After acquiring Philadelphia-based Philly Shipyard, it is now pursuing Austal USA, a major supplier of vessels to the US Navy and Coast Guard.
HD Hyundai has taken a more cautious route, favoring partnerships with American shipbuilders over outright acquisitions, but that may be changing. Industry sources say the company is exploring US shipyard acquisitions and equity investments as it seeks a stronger foothold in the market.
The rivalry is gaining new momentum after a major shift in Washington’s shipbuilding policy.
On Aug. 13, US President Donald Trump signed a memorandum that could temporarily allow foreign shipbuilders to construct the first two vessels of certain US naval programs in their home countries — provided they simultaneously build a new US shipyard or acquire a majority stake in an existing one.
The move significantly eases longstanding restrictions on building US Navy vessels overseas and removes a key barrier to Seoul’s participation in efforts to rebuild America’s shipbuilding industry. Under its “Make America Shipbuilding Great Again,” or MASGA, initiative, South Korea has committed $150 billion to the US shipbuilding sector.
The policy shift could sharpen the contest between HD Hyundai and Hanwha as they expand their US presence.
Hanwha already has what HD Hyundai currently lacks: its own US shipyard.
In December 2024, Hanwha Ocean and Hanwha Systems acquired Philly Shipyard for $100 million, making Hanwha the first Korean shipbuilding group to own a major US shipyard.
Once a major shipyard, Philly Shipyard has in recent years been limited to producing one or two vessels annually, operating with two docks.
Last year, Hanwha Group announced a $5 billion infrastructure investment to expand and modernize the shipyard, aiming to produce up to 20 ships a year.
Hanwha seeks to expand the Philly facility, which has traditionally focused on commercial ships, to include LNG carriers, naval modules and, in the longer term, naval vessels.
The investment is beginning to bear some fruit. In March, Hanwha Defense USA and Hanwha Philly Shipyard won their first US Navy-related project as subcontractors for concept design work on the Next Generation Logistics Ship program, together with Vard Marine US.
In June, the shipyard secured a deal to deliver two Missile Range Instrumentation Vessels for the Missile Defense Agency, which is under the Pentagon.
Its next move could be more consequential.
Hanwha Defense USA has proposed acquiring the US arm of Austal, Australia’s biggest shipbuilding company, for between $1.05 billion and $1.2 billion earlier in August. Based in Mobile, Alabama, Austal USA builds vessels for the US Navy and Coast Guard. The acquisition would give Hanwha an established US naval shipbuilding operation with a direct manufacturing footprint and deep integration into the US naval supply chain.
HD Hyundai weighs direct investment
HD Hyundai Chair Chung Ki-sun (left) shakes hands with US naval chief Adm. Daryl Caudle during Caudle’s visit to HD Hyundai Heavy Industries’ shipyard in Ulsan in November 2025. (HD Hyundai)
Rather than buying an American shipyard, HD Hyundai has focused on technology partnerships with US companies, as well as maintenance, repair and overhaul.
It has partnered with Huntington Ingalls Industries, the largest US military shipbuilder, to co-build the US Navy’s next fleet auxiliary ships. In July, HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company of HD Hyundai Group, also signed a memorandum of understanding with US shipbuilder Fraser Industries to cooperate on shipyard modernization
But the group appears to be shifting toward direct investment and potential acquisition of US shipyards.
HD Korea Shipbuilding & Offshore Engineering established its US unit, HD Hyundai USA LLC, in May, injecting 3.67 billion won ($2.67 million) and taking full ownership of the investment vehicle. The new US investment arm is expected to oversee major investments in the country.
According to industry sources, the company has been examining multiple shipyards, including facilities in San Diego and along the Texas Gulf Coast — locations close to major US Navy hubs and established shipbuilding supply chains.
“It is true that we are looking at multiple shipyards,” a HD Hyundai official said. “But nothing specific has been finalized so far, and we are not close to signing a deal.”
HD Hyundai Chair Chung Ki-sun had also left the door open to a potential US shipyard acquisition in October 2025, saying the company was considering a wide range of options, including acquisitions as part of broader Korea-US shipbuilding cooperation.
“HD Hyundai has been considering a US shipyard acquisition for some time, but recent policy changes have prompted the company to take a more active approach,” an industry official said. “If it decides to move ahead with an acquisition, competition between the two companies could intensify further.”
sahn@heraldcorp.com