HD Hyundai leads Korea’s push into U.S. market

HD Hyundai and other Korean shipbuilders are seeking new business opportunities through expanded cooperation with U.S. companies, signaling a strategic partnership across the shipbuilding sector, experts say. The collaboration now goes beyond military support vessel maintenance, repair, and overhaul to include commercial shipbuilding.

On July 23, HD Hyundai announced that a delegation from its U.S. shipbuilding partner Edison Chouest Offshore (ECO) visited South Korea to discuss detailed plans for jointly building container ships for the U.S. market. The group, led by CEO Dino Chouest and comprising about 10 representatives, toured HD Hyundai’s global research and development center, HD Hyundai Heavy Industries, and HD Hyundai Mipo Dockyard on July 22 and 23.

This visit follows a memorandum of understanding (MOU) signed in June to jointly build medium-sized container ships through 2028. HD Hyundai has already begun technology transfer, sending technical staff to provide productivity consulting.

The cooperation is viewed as a breakthrough that allows Korean firms to enter the U.S. commercial shipping market despite restrictions from the Jones Act, which mandates ships be built and owned in the United States to operate coastal routes. Jung Ki-sun, senior vice chairman of HD Hyundai’s liner division, said HD Hyundai supports efforts to rebuild the U.S. shipbuilding industry. He added that joint shipbuilding in the U.S. will establish a valuable precedent for Korea-U.S. cooperation in shipbuilding.

Meanwhile, Hanwha Ocean has established a presence in the U.S. commercial ship market by acquiring the Philadelphia shipyard, Hanwha Philly Shipyard, while cooperation in the defense sector is also expanding. HD Hyundai is working with Huntington Ingalls Industries, the largest U.S. defense shipbuilder, to enhance the efficiency of constructing Aegis-class warships. Hanwha Ocean has secured multiple maintenance, repair, and overhaul contracts for three U.S. Navy ships, strengthening its relationship with American partners.

The U.S. outreach to Korea is motivated by concerns over China’s maritime ambitions and the war in Ukraine. The strategic importance of the defense industry and caution toward China’s dominance of the global ship market have made rebuilding the U.S. shipbuilding sector a national priority. However, the extensive expertise and skilled workforce required for high-value ship construction cannot be developed quickly, making Korea, with its world-leading technology, the only viable partner.

Industry analysts view this as a new opportunity for Korea’s shipbuilding sector. According to the Federation of Korean Industries, the U.S. plans to place massive orders for up to 448 vessels through 2037, including commercial ships, liquefied natural gas carriers, and warships. This expansion opens the door not only to large commercial ship contracts but also to a U.S. Navy maintenance, repair, and overhaul market estimated at about 20 trillion won annually.

Still, concerns remain over potential leaks of core technologies, aging facilities at U.S. shipyards, and a shortage of skilled workers. These challenges will not be easily resolved in the short term. “HD Hyundai’s active joint construction of commercial ships in the U.S. signals Korea’s integration into the U.S.-led core industrial supply chain against China, beyond simple technology transfer," a source in the Korean shipbuilding industry said. "Yet, uncertainties in U.S. government policy pose potential risks.”


Jae-Hyeng Kim monami@donga.com