South Korean shipbuilders are making significant moves to establish production bases in Southeast Asia, seeking to expand their building capacities and address the limitations of domestic shipyards. According to reports from BusinessKorea, the push is largely driven by the rising demand for new ships worldwide, putting tremendous pressure on South Korea's existing shipbuilding facilities, which are operating at nearly full capacity.
Companies such as HD Hyundai Mipo have ambitious plans for their Vietnamese shipyard, aiming to boost its annual construction output from 15 to 23 ships by 2030, marking nearly a 50% increase. The company has submitted plans to the Vietnamese government to expand production facilities and improve processes. With this expansion, HD Hyundai Mipo hopes to add 1.5 ships annually to its capacity. The shipyard, situated in Khanh Hoa Province, boasts 992,000 square meters of space, featuring multiple docks and quays.
The focus will be primarily on constructing medium-sized petrochemical product carriers, which represent over 60% of HD Hyundai Mipo’s commercial ship order backlog. This strategic shift allows leveraging Southeast Asia's comparatively lower business costs, making operations more economical.
HD Hyundai Heavy Industries is also tapping the Subic Bay shipyard located 110 km northwest of Manila, Philippines. Originally established by Hanjin Heavy Industries, the site is now being repurposed for building blocks for shipping and offshore wind structures. Significantly, it's projected to serve as an operations base for overseas ship maintenance and repair.
On the other hand, Hanwha Ocean is increasing its foothold by acquiring Dynamac, which specializes in offshore facility topsides. This acquisition, amounting to 95.15% of Dynamac, aims at addressing the shortage of offshore facility sites back home by developing “multi-yards” throughout Southeast Asia. By merging hulls produced at its Geoje plant with topsides manufactured by Dynamac, Hanwha Ocean aims to ramp up its production of floating production storage and offloading (FPSO) units.
Samsung Heavy Industries is also eyeing similar expansions, contemplating the construction of Korean-designed ships at Southeast Asian shipyards. This trend of investment reflects the immense pressure on South Korean shipbuilders to maintain competitiveness globally, especially with China's shipbuilding capabilities continuously advancing.
Challenges back home highlight the urgency of expansion efforts—current operational rates have spiked significantly, with major firms like HD Hyundai Heavy Industries operating at mid-90% efficiency, and HD Hyundai Samho reportedly exceeding 116%. Hanwha Ocean and Samsung Heavy Industries follow closely, with rates nearing 99.8% and 110% respectively.
Such operational successes, paired with strategic investments across Southeast Asia, are seen as necessary steps for South Korean shipbuilders to secure more contracts and adhere to delivery timelines for their existing orders. The ability to effectively double down on expansion measures could give them the leverage they need to compete head-to-head with rival shipbuilders, particularly from China.
Meanwhile, the U.S. Navy is making noteworthy progress on the technological front. The service is currently retrofitting its USS Zumwalt, the stealthy guided missile destroyer, with the Navy's first-ever shipborne hypersonic missile system. This move signals their commitment to enhancing naval warfare capabilities. Located at shipyards in Mississippi, work on Zumwalt involves converting the ship's previously unused gun turrets to accommodate these advanced missile tubes.
Hypersonic missiles, traveling at speeds exceeding Mach 5, present formidable challenges to adversaries due to their speed and maneuverability, making them difficult to intercept. Each Zumwalt-class destroyer is set to be outfitted with four missile tubes allowing for three hypersonic missiles each, bringing the total capacity to 12 missiles per ship.
Defense analyst Bryan Clark noted the modification process as pivotal, reimagining previously criticized turrets—which he termed as "a costly blunder"—into valuable assets for U.S. naval capabilities. Over decades, the U.S. has been invested in developing various hypersonic weapons systems, but rapid advancements and testing from competitors like Russia and China have intensified the push for operational deployment.
With these strategic developments, both South Korea’s shipbuilders and the U.S. Navy are positioning themselves to not just maintain but significantly bolster their maritime operational capabilities amid increasing global naval competition. By focusing on technological innovations and geographic expansions, they aim to stay at the forefront of the naval shipbuilding and operational arenas.
