South Korean President Lee Jae Myung (5-L) attends a christening ceremony for the State of Maine, a National Security Multi-mission Vessel, that South Korean shipbuilder Hanwha Ocean has built for the US Maritime Administration, at Hanwha Philly Shipyard in Philadelphia, Pennsylvania, USA. Photo by YONHAP \/ EPA<\/p>\n
May 14 (Asia Today) — South Korea’s expanding shipbuilding cooperation with the United States is drawing renewed attention to the industry’s growing reliance on Chinese-made ship components, particularly among smaller domestic shipyards.<\/p>\n
Industry officials warned Wednesday that increased use of low-cost Chinese equipment could weaken South Korea’s shipbuilding supply chain ecosystem at a time when Washington is tightening restrictions on Chinese involvement in strategic industries.\n<\/p>\n
According to industry sources, many small and mid-sized South Korean shipbuilders have struggled to reduce purchases of Chinese-made components because of pricing pressure and intense competition in commercial vessel markets.<\/p>\n
The issue emerged as a major topic during a government-hosted “K-Shipbuilding Future Vision” meeting held Tuesday in Ulsan by South Korea’s Ministry of Trade, Industry and Energy.\n<\/p>\n
Park Il-dong, chief executive of engineering company DSEC, warned during the meeting that South Korea’s ship equipment industry ecosystem was at risk of collapse because of aggressive low-cost competition from Chinese manufacturers.<\/p>\n
Large shipbuilders increase localization efforts<\/p>\n
Industry officials said conditions differ sharply between South Korea’s major shipbuilders and smaller yards.<\/p>\n
The country’s three largest shipbuilders – HD Hyundai Heavy Industries, Hanwha Ocean and Samsung Heavy Industries – have steadily increased localization rates for high-value vessels including LNG carriers and naval ships.\n<\/p>\n
Major shipyards increasingly use domestically developed core systems and components to improve supply chain stability and maintain quality standards.<\/p>\n
An HD Hyundai Heavy Industries official said the company maintains high localization levels through in-house technology development across major shipbuilding sectors and is gradually reducing use of Chinese-made equipment.<\/p>\n
Smaller shipyards, however, remain more dependent on lower-cost imported parts because they focus heavily on bulk carriers and smaller commercial ships where price competition is more intense.<\/p>\n
Industry experts said Chinese-made valves, pipes and steel plates are increasingly being used to reduce costs.<\/p>\n
Lee Jang-hyun, a professor of naval architecture and ocean engineering at Inha University, said some smaller shipyards use Chinese components for 20% to 30% of a vessel’s systems, while the figure can rise to 40% in some cases if products meet regulatory standards.<\/p>\n
U.S. market access could face pressure<\/p>\n
The issue has become more sensitive as South Korea seeks expanded access to the U.S. naval maintenance, repair and overhaul market and broader shipbuilding cooperation with Washington.<\/p>\n
The United States strictly limits Chinese-made parts in military and strategic supply chains, meaning heavy dependence on Chinese equipment could complicate future access to North American markets.<\/p>\n
Park said Chinese-made ship components are effectively barred from many U.S. and Canadian strategic shipbuilding projects.\n<\/p>\n
“If domestic equipment makers collapse, the entire supply chain could weaken in the long term,” he said.<\/p>\n
He added that the South Korean government should consider financial and tax incentives for shipyards that adopt domestically produced components.<\/p>\n
Industry officials said the global restructuring of U.S.-China supply chains is shifting the definition of competitiveness in shipbuilding beyond production capacity alone.<\/p>\n
“The era when shipbuilding capability itself guaranteed a competitive edge is ending,” one industry official said. “Policy support is needed to preserve the entire industrial ecosystem, including core equipment and engineering technologies.”<\/p>\n
— Reported by Asia Today; translated by UPI<\/p>\n
\u00a9 Asia Today. Unauthorized reproduction or redistribution prohibited.<\/p>\n