HD Hyundai Heavy Industries (HD HHI) publicly proposed that, upon formalizing bilateral cooperation, it could build as many as five Aegis-class destroyers per year for the U.S. Navy. The offer follows HD HHI’s rapid delivery of its own KDX-III Aegis destroyers—most recently ROKS Jeongjo the Great—and reflects its readiness to scale production for foreign clients if regulatory and contract arrangements are resolved.
- USS Jack H. Lucas (DDG 125) underway during acceptance trials. It is the first Arleigh Burke-class destroyer built in the advanced Flight III configuration by Huntington Ingalls Industries at Ingalls Shipbuilding, Pascagoula, Mississippi. (U.S. Navy/HII)
U.S. Seeking Partner for Fleet Expansion
The announcement aligns with U.S. naval strategy to expand its fleet by hundreds of ships over the next three decades. Since domestic shipyards face high labor costs and long lead times, Washington is exploring partnerships with allied commercial shipbuilders such as HD Hyundai and Japan’s Mitsubishi Heavy Industries to close the gap quickly and cost-effectively.
In April 2025, HD HHI and Huntington Ingalls Industries (HII)—the largest U.S. naval shipbuilder—signed a memorandum of understanding to collaborate on naval and commercial ship construction. The agreement signals potential for future technology sharing, joint procurement, and workforce training.
Production Capacity and Technical Capabilities
HD Hyundai operates one of the world’s largest shipyards in Ulsan, with the ability to construct multiple surface combatants simultaneously. Company representatives highlight a workforce of over 250 experienced engineers and consistent output of large-scale naval vessels—capabilities they argue match or exceed those of U.S. counterparts in speed and cost efficiency.
The shipbuilder is already delivering advanced domestic warships under the KDX-III Batch II program, which features modern Aegis radar systems (Baseline 9.C2) and enhanced vertical launch missile capabilities. These platforms serve as a technical record of the firm’s integration with U.S.-origin systems and sensors.
*Hyundai Heavy Industries shipyard in Ulsan, South Korea. HD Hyundai Heavy Industries Co., Ltd. is the world’s largest shipbuilder and a key manufacturer of heavy equipment. (SarahTz/Wikimedia)
Strategic and Industrial Implications
Easing Naval Capacity Constraints
The U.S. Navy’s plans require sustained production of approximately 12 large combatant vessels per year to reach its fleet targets by 2055. With U.S. yards currently unable to sustain such levels, HD Hyundai’s offer represents a practical solution to accelerate fleet build-out.
Industrial Integration with Allies
Deeper cooperation with HD Hyundai could help bolster the U.S. maritime industrial base, both through technology collaboration and workforce training initiatives. Recent legislation and tariff agreements—including the “Make America Shipbuilding Great Again” package—support broader collaboration with allies to modernize critical shipbuilding capacity.
Challenges and Policy Considerations
Despite its readiness, HD Hyundai acknowledged that U.S. law prohibits the construction of naval combatants overseas under normal circumstances, barring presidential exemptions or legislative changes. Contracts with South Korean yards may require legal waivers, or new frameworks to permit shipbuilding beyond U.S. borders.
Complexities also remain around supply chain logistics, security reviews, and integrating foreign-built hulls into U.S. Navy operational pipelines.
- ROKS Sejong the Great (DDG 991) is a KDX-III Batch-I Aegis-equipped guided-missile destroyer built by Hyundai Heavy Industries for the Republic of Korea Navy. In 2019, HHI signed a contract to construct three KDX-III Batch-II destroyers, with the first delivered in November 2024. (U.S. Navy)
Looking Ahead
HD Hyundai’s proposal places Seoul firmly on the radar as a potential strategic partner in addressing America’s shipbuilding deficit. If legal and policy hurdles can be addressed, the move could reshape naval acquisition practices and international cooperation in defense manufacturing.
As global maritime competition continues to intensify—particularly in the Indo-Pacific—such cross-border synergy may prove pivotal to maintaining fleet readiness, alignment with allies, and industrial resilience.
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FAQs: Questions & Answers
The US Navy needs more ships, but American shipyards are already stretched and facing high costs. HD Hyundai has proven that it can quickly build advanced warships like the KDX-III destroyer. By teaming up, the US can speed up ship production and save money, especially as tensions rise in the Indo-Pacific region.
Currently, US law does not allow warships to be built abroad. However, negotiations and agreements – such as the one between HD Hyundai and Huntington Ingalls Industries – indicate a growing push for exceptions. If Washington approves, South Korean-built destroyers could become part of the US fleet in the future.
If Hyundai starts building US Navy ships, it could mean more joint projects, shared technology and workforce training. This would not only strengthen South Korea’s defense industry, but also help US shipyards share knowledge. Many experts see it as a step towards a stronger allied defense network and new job opportunities in global shipbuilding.
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