As domestic shipbuilders continuously enter the U.S. market, forecasts mixed with expectations and concerns are also emerging. According to the Korea-U.S. shipbuilding cooperation, it is expected that new ship orders and Maintenance, Repair, and Overhaul (MRO) work for naval vessels will increase, but there are precedents where domestic shipbuilders have failed after entering foreign markets in the past.
Major domestic shipbuilders, including HD Hyundai, Samsung Heavy Industries, and Hanwha Ocean, are all pursuing entry into the U.S. market. Hanwha Ocean is building ships in the U.S. after acquiring the Philippines shipyard at the end of last year, while HD Hyundai is also pushing to acquire a local shipyard in collaboration with the local investment firm Serverus Capital.
Samsung Heavy Industries, which does not have a division for special ships, signed a strategic partnership with the American Vega Marine Group to share shipyard modernization and operational know-how. All three companies have embarked on rebuilding the local shipbuilding ecosystem in line with the Make America Shipbuilding Great Again (MASGA) project.
The United States is promoting a plan to expand the size of its national merchant ships to 250 by 2034. The naval vessel MRO market is estimated to be worth 20 trillion won annually, and as Korea-U.S. shipbuilding cooperation strengthens, it is expected that Korean companies will also see an increase in work opportunities. The United States has protective laws for its shipbuilding industry such as the Jones Act and Byrnes-Tollefson Act, making local entry necessary.
However, as there are several precedents of the domestic shipbuilding industry failing to establish overseas production bases, analysis suggests that the risks of entering the U.S. market are significant. In particular, the U.S. has a high-cost structure with expensive labor, unlike other countries they have previously entered.
Hanwha Ocean pays its workers at the Philippines shipyard a base hourly wage of $23.10, so even the lowest-paid apprentices earn more than $50,000 (about 70 million won) annually. Wages are raised every six months. Therefore, if productivity does not improve or if an economic downturn in shipbuilding occurs, it could be challenging to sustain such high wage structures.
Samsung Heavy Industries established a shipyard in the Suape region of Brazil in 2006 after signing a comprehensive cooperation agreement with the ATLANTICO consortium. They recorded an order balance of about 4.5 trillion won due to new orders from Brazilian corporations.
However, difficulties in technology transfer resulted in frequent delays in the delivery of ordered ships due to a lack of technological capability, and it has been reported that some manufactured tankers returned after tilting shortly after departure. Ultimately, Samsung Heavy Industries withdrew from Brazil after six years due to management difficulties.
Daewoo Shipbuilding & Marine Engineering (now Hanwha Ocean) also installed a shipyard in Mangalia, Romania, in 1997, achieving an annual order amount close to $2 billion at one point. However, due to difficulties in procurement of raw materials and a downturn in the shipbuilding industry that led to increased low-price orders, it faced managerial challenges and was sold to a Dutch company in 2018.
Hanjin Heavy Industries (now HJ Shipbuilding & Construction) also completed the Subic Shipyard in the Philippines in 2009 at a cost of 2 trillion won but sold it in 2019. Hanjin Heavy Industries, focusing on building merchant vessels at the low-wage Subic shipyard, once rose to 10th in the world in terms of order backlog but ultimately could not withstand the shipbuilding industry's downturn that began in 2014 and sold it.
The domestic shipbuilding industry believes that such trial and error is likely to occur in the U.S. market as well. The shipbuilding ecosystem in the U.S. has deteriorated, and there is a high possibility of facing difficulties in technology transfer due to the lack of skilled workers. Additionally, as the shipbuilding industry is affected by economic trends, it could face management difficulties if continuous order acquisition is not achieved.
To prepare for the possibility of a sluggish market, they plan to expand investments in the U.S. as conservatively as possible. Continuous order acquisition is essential to recover investment profits, so they plan to proceed with investments that align with the U.S. naval market's level of openness.
The domestic shipbuilding industry estimates that the overall market size of U.S. Navy vessels will be about 502 trillion won by 2034, with an expected order scale of about 21 trillion won. Currently, the projects they can participate in include small surface combatants, logistics support vessels, and combat supply ships, but they anticipate that through local shipyards, they could expand to include submarines and large combat ships.
국내 조선 업계는 미 해군 함정 전체 시장 규모를 2034년 약 502조원으로 추정하고 수주할 수 있는 규모는 약 21조원으로 예상하고 있다. 현재는 참여할 수 있는 사업이 소형 수상 전투함·군수 지원함·전투 보급함 등인데, 현지 조선소를 통하면 잠수함·대형 전투함까지 확대할 수 있을 것으로 보고 있다.