South Korean media: From merchant ships to warships… U.S. and Japan keep courting K-shipbuilding
¬ Highlighting the strength of South Korean shipyards
In 1972, when Hyundai Heavy Industries was constructing the Ulsan Shipyard, it dispatched 97 employees to Kawasaki Heavy Industries in Japan to learn shipbuilding techniques. At that time, South Korea had just begun building shipyards and needed to learn from Japan—then dominating over 50% of the global merchant ship market—from fundamental methods such as modular construction. But after roughly half a century, the roles have reversed. Recently, Japan’s shipbuilding industry formally invited HD Hyundai Heavy Industries and Samsung Heavy Industries for collaboration, expressing interest in learning technologies related to liquefied natural gas (LNG) carriers.
The United States is following a similar path. The U.S. Department of Defense and Navy have simultaneously issued Requests for Information (RFI)—a preliminary market survey—to the three major South Korean shipbuilders: HD Hyundai Heavy Industries, Samsung Heavy Industries, and Hanwha Ocean. RFIs aim to understand companies’ technical capabilities, production capacity, and bidding intentions prior to formal tenders. Analysts suggest this move is accelerating progress toward the "MASGA project," scheduled to launch in August 2025.
The simultaneous overtures from both Japan and the U.S. underscore the solid foundation of South Korea’s shipbuilding industry. Globally, only South Korea and China possess the capability to design and construct high-value-added commercial vessels such as LNG carriers and large container ships, as well as military vessels like submarines and destroyers. With rising demand for LNG carriers due to the ongoing Middle East conflict—leading to increased orders in the first half of the year—should cooperation with Japan and the U.S. materialize, South Korea’s shipbuilding sector is poised for another upswing.
Japan seeks LNG carrier technology; the U.S. values military shipbuilding expertise
On the 8th, according to the shipbuilding industry, an institution affiliated with the Japanese government extended a collaboration proposal to HD Hyundai Heavy Industries and Samsung Heavy Industries, requesting to learn core construction and operational technologies for the “cargo tanks” of LNG carriers. The key technology behind LNG carriers lies in the cargo tanks capable of carrying liquefied natural gas at minus 163 degrees Celsius. While the original design technology originates from French firms, the construction and operational know-how are firmly established in South Korea. Japan lacks these competencies and thus remains at a disadvantage in the LNG carrier competition.
In reality, during January–May this year, global new orders for LNG carriers totaled 49 vessels—34 ordered by South Korea, 15 by China, and zero by Japan. However, industry insiders noted: “We are planning to explore cooperation with Japan within limits that do not undermine our domestic competitiveness. Yet, cargo tank-related technologies are national core technologies, so further discussions remain necessary.”
For the U.S., issuing RFIs at the governmental level to confirm South Korea’s naval vessel construction capabilities marks the first time since the MASGA project began. HD Hyundai Heavy Industries and Hanwha Ocean submitted information on their combat vessel design and construction track records and production capacities. All three shipyards provided data on replenishment vessels. Faced with the growing naval strength of China, the U.S. aims to expand its fleet. However, due to chronic labor shortages and insufficient technological capacity in American shipyards, which lead to delayed delivery schedules, the U.S. has now turned to South Korea for help.
Yet, if the U.S. intends to place actual orders for warships in South Korea, it must first amend existing laws restricting the overseas construction of U.S. military vessels. Therefore, in the short term, cooperation will likely continue focusing on joint design and production efforts with U.S.-based shipyards, along with maintenance, repair, and overhaul (MRO) services.
K-shipbuilding holds orders worth 20.4 trillion won, with delivery schedules extending beyond three years
If cooperation with Japan and the U.S. expands, South Korea’s shipbuilding industry stands to gain even further. The overall environment remains favorable. According to Clarksons Research, based on CGT (a metric reflecting shipbuilding complexity), Chinese shipyards accounted for 72% of new orders in January–May, while South Korea held 19%. However, when measured per vessel, South Korea’s average CGT (approximately 49,000 CGT) is 1.5 times higher than China’s (27,400 CGT). This indicates that South Korea primarily secures high-value-added contracts. The combined order backlog of the three major shipbuilders totals $13.69 billion (equivalent to 20.49 trillion KRW), with production capacity booked through 2024–2025. The average price of newly built ships (newbuild prices) has risen by 33% compared to June 2021—a trend highly beneficial for ensuring profitability among shipyards.
According to industry sources: “Since the outbreak of the Middle East conflict, demand for LNG continues to grow. Increased LNG carrier orders expected in the second half of the year will be another significant boost for South Korean shipyards.”
Source: Chosun Ilbo
Original article: toutiao.com/article/1870207458192392/
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