HD Hyundai will sell "intellectual property" on shipyard operations and ship design to the United States, which is running a shipbuilding revival project. Unlike Hanwha Ocean, which invested large sums to acquire a local shipyard, it is pursuing cooperation with the United States by exporting the know-how of Korea's shipbuilding industry—proven by building about 40 ships a year with high efficiency.
On the 9th, according to the shipbuilding industry, HD Korea Shipbuilding & Offshore Engineering, the intermediate holding company for HD Hyundai's shipbuilding division, recently signed a memorandum of understanding (MOU) on "cooperation for shipyard modernization to revive the U.S. shipbuilding industry" with Fraser Industries, a U.S. maritime shipbuilding company. The project aims to introduce Korean shipyard operating methods, automation and modernization technologies, and ship design practices at Fraser Shipyards.
Built in 1890, Fraser Shipyards is a small to mid-sized shipyard on the U.S. Great Lakes. It has two docks for shipbuilding; of these, the larger No. 2 dock is 253 meters long and 29 meters wide, about half the size of the main docks at major Korean shipyards.
The project will proceed with HD Korea Shipbuilding & Offshore Engineering providing consulting on optimized production methods tailored to the local shipyard's needs. HD Korea Shipbuilding & Offshore Engineering is discussing introducing at Fraser Shipyards Korea's shipbuilding practices such as pre-outfitting and the "onshore construction method," which is highly useful for small to mid-sized shipyards.
Pre-outfitting installs electrical and electronic equipment on hull blocks in advance and is considered a way to boost process efficiency. On land, the blocks and hull are completed first, then the hull is moved to the dock for the remaining processes. Because it enables shipbuilding without constructing new docks and raises dock efficiency, it is effective for small to mid-sized vessels with relatively lighter loads.
In addition to its two docks, Fraser Shipyards has about 330,000 square meters of land, of which only about half is currently in use. HD Korea Shipbuilding & Offshore Engineering and Fraser are reviewing introducing the onshore construction method on the remaining land to improve process efficiency.
Fraser Shipyards is seeking to win the U.S. Coast Guard (USCG) contract to build new heavy polar security cutters (HSC-L). The full program calls for seven cutters, and if awarded, Fraser would secure 10 years of work. Depending on the bid result, HD Korea Shipbuilding & Offshore Engineering plans to transfer measures to build a yard specialized for heavy polar security cutters at Fraser Shipyards.
HD Korea Shipbuilding & Offshore Engineering aims to complete this project in as little as three years. It is conducting legal reviews to register ship production methods and the like as intellectual property (IP) for the project.
HD Hyundai also said on Apr. 5 that it launched a "pilot project to improve shipyard productivity" at Ingalls Shipbuilding in Mississippi. Ingalls Shipbuilding is operated by Huntington Ingalls Industries, Inc. (HII), the largest U.S. defense shipbuilder.
HD Hyundai and Huntington Ingalls Industries, Inc. (HII) signed an MOU in April last year for "improving shipbuilding productivity and cooperating on advanced shipbuilding technologies." The MOU includes collaboration across shipbuilding, such as building digital shipyards through process automation and the introduction of robots and artificial intelligence (AI), enhancing production efficiency by combining expertise and capabilities in warship construction, training production personnel, and participating in equipment supply chains.
HD Hyundai's approach of selling or sharing ship-related intellectual property, rather than directly acquiring a shipyard in the United States and building ships, contrasts with rival Hanwha Ocean.
Hanwha Ocean invested $100 million (about 143 billion won) in 2024 to acquire Philly Shipyard in Philadelphia. It plans to pour in $5 billion (about 7.15 trillion won) to raise the shipyard's capacity—from the current 1 to 1.5 ships a year—to more than 10 ships by 2035.
A shipbuilding industry official said, "If Hanwha's Philly Shipyard proceeds as planned, it could secure a lead in the vast U.S. shipbuilding market, but it inevitably requires large capital and, if a shipbuilding downturn hits, the financial risk will also grow." The official added, "HD Hyundai appears to be pursuing cooperation with the United States by selling intellectual property instead of acquiring shipyards, taking this reality into account."
HD Hyundai is considering expanding this model to small and mid-sized U.S. shipyards. While large U.S. shipyards, which are mostly tied to defense, are relatively hard to access, small and mid-sized shipyards that can receive subsidies under the U.S. government's shipbuilding revival push have strong demand for production facility upgrades.
An HD Korea Shipbuilding & Offshore Engineering official said, "To improve the project's sustainability, we plan to expand the business by not only selling technology but also passing down how to build a shipyard from the ground up."