After Hanwha Ocean and HD Hyundai Heavy Industries failed to win a Canadian submarine order, voices in the shipbuilding and securities industries say the two companies' 2030 revenue targets for the special ship (warship) business have become uncertain. Hanwha Ocean set its 2030 special ship revenue target at 4 trillion won, and HD Hyundai Heavy Industries set 7 trillion won, figures said to reflect the possibility of being selected for Canada's submarine program, which totals 60 trillion won. Among Korea's three major shipbuilders, Samsung Heavy Industries is not engaged in newbuild warship projects.
Hanwha Ocean and HD Hyundai Heavy Industries have failed in succession over the past two years to win orders for Australian destroyers, Polish submarines, and Canadian submarines, but they have set out to find new opportunities across Southeast Asia, India, the Middle East, Latin America, and Europe, leveraging their bid experience and stronger recognition in the international naval defense market. Through the Korea-U.S. MASGA shipbuilding cooperation project, they are also preparing a long-term goal of building U.S. warships.
◇ High hopes on Canada fade… "Defense revenue targets for 2030 likely to be lowered"
According to the shipbuilding and securities industries on the 22nd, Hanwha Ocean has set a 2030 special ship revenue target of 4 trillion won. That is more than triple the 2025 level (130 billion won).
Hanwha Ocean announced a 2 trillion won rights offering in Aug. 2023 and said it would invest 900 billion won of that into the special ship business, including expanding submarine and surface ship construction facilities. Last year, by building its fourth special ship plant, it also set an additional goal of achieving 5 trillion won in revenue in the special ship field by 2035.
HD Hyundai Heavy Industries is said to have set a 2030 special ship revenue target of 7 trillion won and a 2035 target of 10 trillion won. Last year, HD Hyundai Heavy Industries' special ship revenue was about 110 billion won.
Last year, when HD Hyundai Heavy Industries announced a merger plan with HD Hyundai Mipo, it unveiled a vision to expand its naval defense business. The idea is to combine Hyundai Heavy Industries' warship construction technology with Hyundai Mipo's production infrastructure to increase overseas warship orders.
However, with Germany's TKMS selected as the preferred bidder for Canada's submarine program, some predict both companies may find it difficult to meet their 2030 revenue targets. Kang Kyung-tae, an analyst at Korea Investment & Securities Co., said, "Canada's patrol submarine construction program was a key revenue source for achieving the 2030 warship revenue targets, so with the bid falling through, Hanwha Ocean and HD Hyundai Heavy Industries will have no choice but to lower their defense revenue targets."
◇ Challenging warship programs around the world… the pinnacle is the United States
Aiming to expand naval defense exports, Hanwha Ocean and HD Hyundai Heavy Industries are moving to target warship procurement programs being pursued by countries around the world. The earliest order results expected within the year are in Southeast Asia and South America.
In Southeast Asia, Thailand and the Philippines are pursuing warship procurements. For the Royal Thai Navy's next frigate acquisition of one ship, Hanwha Ocean and HD Hyundai Heavy Industries are competing as leading candidates.
Hanwha Ocean, in its Daewoo Shipbuilding & Marine Engineering days, exported a frigate to Thailand in 2018. The current project is worth 17.5 billion baht (about 800 billion won), and if won, it is seen as highly likely to lead to additional orders for three ships that are expected to follow.
In Latin America, HD Hyundai Heavy Industries is pushing to export next-generation submarines to Peru. In Dec. last year, it signed a co-development contract with the Peruvian Navy and state-owned SIMA Shipyard to secure two new submarines and recently completed basic design. After detailed design, it aims to sign a lead-ship construction contract within the year.
The push to export submarines to Peru is based on cooperation that continued with the surface ship export in 2024. HD Hyundai Heavy Industries won a contract in 2024 to export a total of four ships to Peru—a frigate, an offshore patrol vessel, and landing ships—and since last year has been co-building at SIMA Shipyard. The submarines are also expected to be co-built at SIMA Shipyard.
An HD Hyundai Heavy Industries official said, "By co-building locally in Peru, we can establish a Latin American production base and, on that basis, identify opportunities to export warships."
In the Middle East, Saudi Arabia is pursuing a project to acquire four to six frigates next year. In line with "Vision 2030," Saudi Arabia is pushing naval modernization and is said to be considering securing submarine capabilities after 2030. HD Hyundai Heavy Industries is seeking to participate in Saudi warship projects, leveraging its role as a founding partner of Saudi shipbuilding and offshore plant company IMI.
Hanwha Ocean and HD Hyundai Heavy Industries are also seeking order opportunities in European warship programs in countries including Greece, Portugal, Croatia, and Estonia. In Morocco, a strategic chokepoint in North Africa facing Europe, Hanwha Ocean is being mentioned as a candidate for a submarine acquisition program.
For both Hanwha Ocean and HD Hyundai Heavy Industries, the most important market is the United States. In line with U.S. President Donald Trump's plan to strengthen naval power, they are making bids for U.S. military shipbuilding programs their top priority.
At the G7 summit last month, after President Trump asked President Lee Jae-myung whether it would be possible to build 10 warships, the U.S. Navy was reported to have sent requests for information (RFI) on combatants and oilers to Korea's three major shipbuilders, prompting discussion of various ways Korea could participate in U.S. military shipbuilding programs.
However, with the United States facing midterm elections in Nov., some say it will be difficult to expect meaningful results within this year given the U.S. political environment. Jung Yeon-seung, an analyst at NH Investment & Securities, said, "Considering the U.S. midterm election schedule, it is difficult to expect a meaningful allocation of warship volumes to Korean shipbuilders within the year," adding, "Bilateral cooperation should be viewed over the long term."