HD Hyundai Heavy Industries Co. and US naval shipbuilding leader Huntington Ingalls Industries Inc. have formed a strategic alliance that could open new markets for South Korea’s largest shipbuilder in the lucrative US defense sector. The memorandum of understanding signed Monday at the Sea Air Space expo in Washington aims to collaborate on warship and commercial vessel construction while developing next-generation shipbuilding technologies.
The partnership comes as the US Navy struggles to match China’s rapidly expanding naval fleet. According to the US Congressional Budget Office, the Navy plans to expand from 295 ships currently to 390 vessels by 2054, requiring 364 new warships over the next three decades at an estimated cost of $1 trillion.
“This deal addresses America’s shipyard capacity shortage while giving HD Hyundai access to one of the world’s most exclusive defense markets,” said naval analyst Mark Thompson at Bloomberg Intelligence. “Korean shipyards can produce Aegis destroyers at half the cost and triple the speed of US facilities.”
The alliance combines HD Hyundai’s efficiency in commercial shipbuilding with HII’s expertise in military vessels. The partnership “aims to leverage the combined expertise and resources of both companies to advance technological innovation, maximize production efficiency, and strengthen the defense industrial base in both countries,” according to the joint announcement.
Washington faces mounting pressure to counter China’s shipbuilding dominance. In January, the US Trade Representative’s probe found China’s shipbuilding dominance was “unreasonable” and “actionable” under US trade laws. President Trump has prioritized rebuilding American maritime capabilities, recently calling on Korean shipbuilders to partner with US counterparts.
For the deal to fully materialize, Congress must amend the Burns-Tollefson Act, which currently restricts foreign-built warships from being constructed in the US. Legislation to permit qualified allies to build US naval vessels has already been introduced by Republican senators.
