HD Hyundai Signs Two Major U.S. Defense MOUs, Signaling Korean Push into American Shipbuilding

HD Hyundai Heavy Industries (HHI) has signed two separate memorandums of understanding this week with major American defense contractors in a move seen as underscoring growing South Korean involvement in U.S. shipbuilding.

The agreements, signed during the Sea-Air-Space expo, include partnerships with both Fairbanks Morse Defense (FMD) and Huntington Ingalls Industries (HII), America’s largest military shipbuilder.

Under a Memorandum of Understanding (MOU), FMD will work with South Korean shipbuilder HD Hyundai Heavy Industries (HHI) to explore opportunities for collaboration on future international Navy initiatives. HII and HD Hyundai Heavy Industries (HHI) signed a MOU on Monday also seeking to boost collaboration on military and commercial shipbuilding.

The timing is crucial, as U.S. shipbuilding output has plummeted to fewer than five ships annually, while China dominates with approximately 1,700 vessels per year.

“The U.S. is signaling to the world that it’s ready to reestablish itself as a shipbuilding nation,” said George Whittier, CEO of Fairbanks Morse Defense. “Global companies are eager to be part of that effort by working with the American industrial base.”

HD Hyundai Heavy Industries brings substantial credentials to these partnerships, with approximately 13% of global market share and boasting 50 years of naval shipbuilding experience. The company has delivered more than 2,300 ships globally as of 2023.

The move follows a broader trend of South Korean shipbuilders expanding their U.S. presence. Hanwha recently acquired the Philly Shipyard and has already demonstrated its capabilities by completing maintenance work on the USNS Wally Schirra, marking the first time a Korean shipyard has serviced a U.S. Navy vessel.

These partnerships align with recent U.S. government initiatives to revitalize domestic shipbuilding, including plans for a new White House office of shipbuilding and tax incentives for domestic builders. These measures come in response to a USTR investigation highlighting the impact of Chinese maritime practices on U.S. capabilities.

Won-ho Joo, chief executive of HHI’s naval & special ship business unit, expressed confidence in the collaboration: “HD Hyundai Heavy Industries has been constructing high-quality warships for the Republic of Korea and allied nations for over 50 years, and we believe our expertise can significantly contribute to the U.S. Navy.”

The agreements represent part of a broader U.S. effort aimed at countering China’s growing influence in global shipbuilding, with emphasis on strengthening partnerships with allies like South Korea and Japan.

For Fairbanks Morse Defense, which has served the U.S. Navy, Coast Guard, and Military Sealift Command for nearly a century, the partnership offers opportunities to enhance its comprehensive portfolio of marine technologies and services.

HII has expressed similar sentiment. “[This] agreement reflects our commitment to explore all opportunities to expand U.S. shipbuilding capacity in support of national security,” said Brian Blanchette, HII Executive Vice President and President of Ingalls Shipbuilding. “By working with our shipbuilding allies and sharing best practices, we believe this MOU offers real potential to help accelerate delivery of quality ships.”

These developments signal a potential transformation in U.S. shipbuilding capabilities through international cooperation, as American shipyards seek to rebuild capacity and compete with China’s maritime dominance.

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