- HD Hyundai Heavy Industries is exploring the acquisition of a U.S. shipyard to expand its naval presence, targeting $2.2 billion in annual revenue by 2035.
- The company sees opportunities in the U.S. market due to limited domestic capacity and growing naval competition with China.
- Key challenges include skilled labor shortages, worker retention, visa restrictions for Korean trainers, and long-standing U.S. laws limiting foreign shipbuilding.
- Despite these hurdles, Hyundai emphasizes its speed and efficiency, recently showcasing a South Korean Navy destroyer built faster than U.S. peers with U.S.-supplied combat systems.
South Korea’s HD Hyundai Heavy Industries is exploring the purchase of a U.S. shipyard as it seeks to strengthen its presence in America’s naval market. The company aims to generate $2.2 billion annually by 2035 through warship sales to the U.S. Navy, according to Reuters.
Expanding U.S. Naval Manufacturing Opportunities
HD Hyundai Heavy Industries has signaled a strong interest in establishing a shipbuilding base in the United States. Company executive Woo-maan Jeong explained that the U.S. faces both a widening capability gap with China and limited domestic capacity for building naval vessels, creating conditions that may open the shipbuilding market to greater international participation. Jeong noted that, to address short-term shortages, the U.S. will likely need to draw on facilities and expertise developed by its allies.
Although U.S. shipyards once led the world during World War II, their global market share had fallen to just 0.04% by 2024, according to U.N. Trade and Development data. Today, China and South Korea dominate commercial shipbuilding, together accounting for more than 80% of global output. Still, several U.S. shipyards remain active, including Philly Shipyard—acquired in 2024 by Korea’s Hanwha Ocean—along with facilities operated by General Dynamics and Huntington Ingalls Industries, which continues to supply a significant number of ships to the U.S. Navy.
South Korea has also demonstrated its long-term commitment to U.S. industry. In July, Seoul pledged $150 billion in U.S. shipbuilding projects as part of a broader $350 billion investment framework tied to tariff negotiations. More recently, HD Hyundai announced a merger with its affiliate HD Hyundai Mipo, aiming to use Mipo’s yards to expand its warship program and take a leading role in future U.S.-Korea shipbuilding initiatives.
Challenges and Opportunities in the U.S. Market
While HD Hyundai Heavy Industries sees strong potential in the United States, company leaders acknowledge significant challenges to operating there. A shortage of skilled labor remains a major concern, with many workers leaving U.S. shipyards within a year. Based on Hyundai’s past experience in Peru, Jeong estimated that it could take three to five years of training to build and retain a productive workforce in America. Immigration policy is another factor, as the company has called for improved visa procedures for Korean trainers, particularly following recent enforcement actions at Hyundai Motor’s Georgia battery plant.
Regulatory barriers also shape the business environment. U.S. laws such as the Merchant Marine Act of 1920, commonly known as the Jones Act, and the Byrnes-Tollefson Amendment currently restrict foreign shipyards from constructing naval vessels. While amendments to these laws are being discussed in Congress, Jeong noted it is unlikely they will be fully repealed.
Despite these hurdles, Hyundai continues to highlight its advantages in efficiency and technology. This week, the company christened an 8,200-metric ton, Aegis-equipped destroyer at its Ulsan yard, scheduled for delivery to the South Korean Navy by late 2026. Built in only 18 months—nearly one-third faster than U.S. peers—this warship incorporates advanced combat systems supplied by American defense companies including Lockheed Martin, serving as a demonstration of U.S.-Korea cooperation.
For Hyundai, the U.S. remains the most attractive global market for naval projects. As Jeong put it, “the undeniable reality is that if you want to do business with the U.S., you need to do it in the U.S.”
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Source: Reuters
