Workers weld at Okpo Shipyard of Daewoo Shipbuilding & Marine Engineering Co. in Geoje, South Korea, in 2022. File Photo by Yonhap/EPA
Sept. 3 (UPI) — South Korean shipbuilders are pouring investment, technology and expertise into a U.S. maritime industry struggling with shrinking capacity, worker shortages and competition from China, offering Washington a potential path to rebuild American shipyards without sending ship construction overseas.
The growing partnership also raises a difficult question: How much foreign participation is the United States prepared to accept in an industry considered essential to national security?
The issue has gained urgency following a White House directive aimed at increasing competition and capacity in the U.S. maritime industrial base. The administration’s plan allows greater use of foreign shipbuilding expertise under certain conditions, including investment in American shipyards, training U.S. workers, transferring production technologies and developing domestic supply chains.
Limited shipyard capacity and a shortage of skilled workers remain major obstacles to expanding the U.S. Navy fleet, according to Shelby S. Oakley, director of Contracting and National Security Acquisitions at the U.S. Government Accountability Office.
“The capacity of the existing yards and the size and skill level of the current workforce are certainly a limiting factor when it comes to the U.S. Navy’s ability to increase the size of the fleet,” Oakley told UPI.
Oakley said meeting Navy shipbuilding goals will require expanding existing yards or adding new ones, increasing the skilled workforce and making greater use of technology and automation. Without those changes, she said, the Navy will struggle to meet its fleet targets.
South Korea could provide part of that capacity.
Under a broader $350 billion U.S.-South Korea investment framework, Seoul has committed $150 billion specifically to shipbuilding cooperation, with another $200 billion intended for strategic investments in other sectors.
South Korea moved toward implementing the maritime portion in June when the Korea-U.S. Strategic Investment Corporation, Korean policy finance institutions and shipbuilders HD Hyundai Heavy Industries, Hanwha Ocean and Samsung Heavy Industries agreed to identify projects and coordinate financing.
The arrangement combines something Washington needs: capital and industrial expertise.
For decades, U.S. commercial shipbuilding has lost ground to Asian competitors. China now dominates global commercial ship construction, while South Korea and Japan retain substantial production capacity. The United States accounts for only a fraction of global commercial output.
President Donald Trump recently elevated shipbuilding capacity to a national security priority, directing his administration to look abroad for models that could help rebuild the U.S. maritime industrial base.
“I have determined that it is in the national security interest of the United States to increase domestic shipbuilding capacity,” Trump said in the memorandum, pointing to the October 2025 U.S. Finland Agreement on icebreaker construction as a model for cooperation with foreign companies.
China adds urgency to that effort.
China’s enormous civilian shipbuilding industry supports an expanding naval industrial base, allowing shipyards, suppliers and skilled workers to serve both commercial and military production. That industrial scale has made shipbuilding an increasingly important element of U.S.-China strategic competition.
The United States faces a different reality. The Government Accountability Office reported this year that Navy and Coast Guard shipbuilding programs have repeatedly exceeded budgets and fallen years behind schedule, while yards face skilled-worker shortages, capacity constraints and fragile supplier networks.
South Korea offers an alternative source of expertise. Its yards have decades of experience with modular construction, automation, digital design and high-volume production. Korean companies also build sophisticated naval vessels, including Aegis-equipped destroyers and submarines.
Hanwha has moved furthest into the U.S. market.
Hanwha Ocean and Hanwha Systems acquired Philly Shipyard for $100 million in 2024, giving the conglomerate a direct U.S. manufacturing foothold. Hanwha subsequently announced plans for billions of dollars in additional investment to expand the yard and introduce Korean shipbuilding technology.
Hanwha employs nearly 30,000 workers at Hanwha Ocean’s Geoje Shipyard in South Korea, where advanced manufacturing and automation help produce more than 40 ships a year.
“In the coming years, we will continue to bring trainers to develop our workforce at the Hanwha Philadelphia Shipyard as well as transfer technology to expand commercial and naval shipbuilding capacity,” Hanwha Defense USA spokesman James Hewitt told UPI.
Hanwha Ocean also completed a major overhaul of the Military Sealift Command dry cargo ship USNS Wally Schirra at Geoje in March 2025. The seven-month project was the first large-scale regular overhaul of a Military Sealift Command vessel awarded to a South Korean yard.
HD Hyundai Heavy Industries is pursuing a different route.
Rather than acquiring a U.S. yard, HD Hyundai has developed partnerships with American shipbuilders. The company and Huntington Ingalls Industries are cooperating on shipbuilding technology and production, including an August pilot program to expand automated welding at HII’s Ingalls Shipbuilding yard in Mississippi.
“The United States is a strong ally and a key business partner for us,” said Hannae Choi, Executive Vice President at HD Hyundai Shipbuilding and Offshore Engineering.
Such arrangements offer Washington a possible compromise: Korean companies can bring capital, technology, automation and production methods into American yards while training U.S. workers and developing domestic supply chains.
That distinction — foreign investment in U.S. shipbuilding rather than shifting construction overseas — has emerged as a key dividing line for the domestic industry.
The Shipbuilders Council of America supports foreign investment when it expands U.S. shipyard capacity but opposes sending construction abroad, said Danielle Hagen, the council’s executive vice president for communications.
“If South Korean capital and automation expertise flow into American facilities, employ American workers and produce American-built hulls, that model is consistent with our longstanding position,” Hagen told UPI.
“The SCA’s concern has never been the nationality of capital, but whether the work, the workforce and the industrial capability remain here in the U.S.,” she said.
Federal law has long restricted construction of U.S. naval vessels in foreign shipyards, while the Jones Act requires vessels operating in U.S. coastwise trade to be U.S.-built, U.S.-owned and U.S.-crewed.
“Any foreign partner needs to operate their U.S. yard as a genuinely American enterprise, with real decision-making authority here,” the council said, adding that foreign acquisitions should face national security scrutiny and continued congressional oversight.
Despite the backlog at U.S. yards, bipartisan opposition remains strong in Congress to building Navy vessels overseas. Rep. Jared Golden, D-Maine, a member of the House Armed Services Committee, has been among lawmakers seeking to preserve domestic construction requirements and prevent naval shipbuilding from migrating to foreign yards, including South Korea and Japan.
Those concerns extend beyond jobs. Modern warships contain classified systems, sensitive designs and specialized supply chains. Greater participation by even close allies raises questions about intellectual property, cybersecurity and control over technologies considered essential to U.S. military power.
Few U.S. allies, however, can match South Korea’s shipbuilding scale, speed and technical expertise. The emerging model seeks to use those capabilities to increase production in the United States rather than substitute foreign yards for American ones.
Whether that approach succeeds will depend not only on transferring Korean technology and manufacturing expertise into U.S. yards, but also on Washington’s ability to integrate those investments into a broader shipbuilding strategy.
Managing competing demands for Navy ship construction and repair requires such an approach, Oakley told UPI. A 2025 GAO report found that the Navy lacked a comprehensive strategy for managing the private shipbuilding and repair industry on which it depends, complicating efforts to coordinate investment, yard capacity and workforce needs.
The challenge is magnified by China. Its dominance of commercial shipbuilding has created a vast network of yards, suppliers and skilled workers that the United States cannot quickly replicate. South Korea cannot close that gap alone, but its capital, technology and expertise could help expand U.S. capacity as American yards modernize, train workers and rebuild supply chains.
For Washington, the central policy question is whether greater South Korean participation can strengthen U.S. shipbuilding capacity without creating a new dependence on foreign production.