'American Ships to Be Built in Korea' Specified for the First Time in South Korea-U.S. Fact Sheet... Shipbuilding Cooperation Accelerates

The Joint Fact Sheet (JFS) released by South Korea and the United States on November 14 states that American ships can now be built in Korea. This opens a pathway for Korean shipyards to compensate for the technological and production capacity limitations currently faced by the U.S. shipbuilding industry. To support this, the two countries have agreed to establish a 'Shipyard Working Group' to modernize shipyards, enhance maintenance, repair, and operations (MRO), develop the workforce, and strengthen supply chain resilience, thereby expanding cooperation in the shipbuilding sector.

Hanwha Ocean Geoje Plant View. Provided by Hanwha Ocean

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The fact sheet announced by both countries on this day includes the final details of the shipbuilding sector from the $350 billion (approximately 514 trillion won) 'U.S. Investment Package' agreed upon at the recent South Korea-U.S. summit. Of this, $150 billion will be allocated to the 'MASGA (Make American Shipbuilding Great Again)' project and other initiatives aimed at modernizing and expanding the production capacity of the U.S. shipbuilding industry.

The most notable aspect is that Korean shipyards can now be utilized to construct American commercial vessels and warships. This measure is intended to address the production capacity limitations of U.S. shipyards. Both countries expect that this will help expand the U.S. merchant fleet and accelerate the acquisition of naval vessels to enhance combat readiness. Through the Shipyard Working Group, the two sides also agreed to strengthen MRO systems, foster talent, modernize equipment, and cooperate to stabilize the shipbuilding supply chain.

In the field of security, the agreement includes provisions allowing South Korea to build nuclear-powered attack submarines (SSN) with U.S. approval. The United States has stated its intention to work with Korea to establish specific requirements for the SSN program, including fuel procurement methods. Additionally, the document expresses support for South Korea’s civilian uranium enrichment and spent nuclear fuel reprocessing procedures within the framework of the U.S.-Korea 123 Agreement. The 123 Agreement, based on Section 123 of the U.S. Atomic Energy Act, is a fundamental agreement that allows Korea to receive U.S. nuclear power technology and equipment.

Hanwha Group, which acquired the Philadelphia Shipyard-the symbol of the MASGA project-expressed its intention to expand cooperation in shipbuilding immediately after the release of the fact sheet. Hanwha Group stated, "We will contribute to bilateral cooperation through investment and expansion of the Geoje Shipyard," and added, "We will also apply the technology of the Geoje Shipyard to local shipyards such as the Philadelphia Shipyard in the United States." Meanwhile, HD Hyundai has continuously requested government approval to build nuclear-powered submarines (SSN) domestically and has closely monitored the U.S. stance on this matter. With this agreement opening up institutional possibilities, it is expected that related cooperation will now accelerate.

Following the release of the fact sheet, South Korea and the United States plan to continue working-level discussions in the shipbuilding sector.

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