HD Hyundai Heavy Industries and Hanwha Ocean are moving to break into the South American naval defense market. For HD Hyundai Heavy Industries, its first submarine export since the company was founded is all but certain with Peru. Using Peru as a bridgehead, HD Hyundai Heavy Industries plans to expand warship exports to neighboring countries such as Argentina. Hanwha Ocean has jumped into the bidding for Chilean submarines and frigates.
South American countries are working to strengthen their naval defense capabilities in line with fleet modernization goals. Localization measures such as local production and technology transfer are cited as key factors for Korean shipbuilders to tap the South American market.
According to the shipbuilding industry and South American media reports on the 12th, HD Hyundai Heavy Industries is pushing to export its independently designed 1,500-ton-class submarine HDS-1500 to the Argentine Navy. After moving to co-develop a Peru-customized submarine based on the HDS-1500 with Peru, the company is also exploring an HDS-1500 export to Argentina.
Argentina has had a gap in submarine capability since a German-made submarine sank in 2017. To restore its submarine force, the Argentine Navy is pursuing the introduction of new submarines. Locally, there are calls to secure as many as five to six attack submarines.
Argentina's submarine procurement plan is in its early stages, but European corporations as well as HD Hyundai Heavy Industries have already joined the bidding. France's Naval Group has reportedly proposed the Scorpène class; Germany's TKMS, the Type 214 and Type 209 NG classes; Sweden's Saab, the C71 class; and Spain's Navantia, the S-80 class submarines.
The HDS-1500 that HD Hyundai Heavy Industries is seeking to export is an export-model, mid-sized diesel-electric submarine. Its strength is a high level of automation that allows operation with a minimum crew of about 25.
HD Hyundai Heavy Industries is said to have proposed a package to Argentina offering periodic overhauls and system upgrades by leveraging the MRO (maintenance, repair and overhaul) and parts supply-chain infrastructure being established in Peru. Because warships operate for more than 30 years, MRO to maintain performance and extend service life after construction is critical.
HD Hyundai Heavy Industries is pursuing a strategy to target the Latin American market with Peru as its base. Centered on the state-run SIMA shipyard in Peru, it aims to build a regional hub for warship construction and MRO and to establish a local industrial ecosystem.
With Peru, cooperation on warships is widening from surface ships to submarines. In April 2024, HD Hyundai Heavy Industries signed a contract with the SIMA shipyard to jointly build four surface ships (frigates, offshore patrol vessels and landing ships) locally. The contract is worth $462.9 million, the largest among South American defense exports by Korean corporations. The Peruvian Navy also plans to place additional orders for 11 surface ships, raising expectations for more orders for HD Hyundai Heavy Industries.
In December last year, HD Hyundai Heavy Industries won a project with the Peruvian Navy and the SIMA shipyard to co-develop two next-generation submarines. The Peruvian Navy is pursuing a program to introduce new submarines to replace its aging fleet. Peru is one of the South American countries with the longest history of submarine operations. The goal of this joint development project is to replace the German-made submarines that Peru has operated since the 1970s.
Based on its independently designed HDS-1500 submarine model, HD Hyundai Heavy Industries has designed a 1,500-ton-class mid-sized submarine (HDS-MGP) that reflects the Peruvian Navy's operational requirements. With the basic design complete, the company is pushing to sign a contract within the year to build the lead ship (the first vessel) after detailed design.
An HD Hyundai Heavy Industries official said, "We are developing the submarine with a customized design that reflects the operating environment of deep waters more than 3,000 meters deep and the Peruvian Navy's operational experience."
Hanwha Ocean is pushing to export submarines and frigates to the Chilean Navy. Chile is pursuing a project to replace two aging German-made submarines, which are nearing retirement, out of its total of four.
Hanwha Ocean has reportedly proposed the 2,000-ton-class Ocean 2000 submarine, developed for overseas markets. It is a diesel-electric submarine and a mid-tier model with a price advantage over the 3,000-ton-class submarine (KSS-III).
Hanwha Ocean is also targeting Chile's multipurpose frigate construction program with the 4,000-ton-class frigate Ocean 4500. Chile is pursuing a project to sequentially replace eight existing frigates that were introduced secondhand from the United Kingdom, the Netherlands and Australia and are currently in service.
Hanwha Ocean has reportedly proposed joint warship design and local construction, technology transfer, shipyard modernization, local workforce training and parts supply-chain establishment in line with the Chilean government's naval force modernization strategy. Hanwha Ocean CEO Jung In-sub is said to have accompanied President Lee Jae-myung's state visit to Chile last month and discussed cooperation plans on site.