The News
South Korean shipbuilders have become the main outside builders of the US shipbuilding push, The Wall Street Journal reported, led by Hanwha, which has spent about $350 million upgrading Philly Shipyard since buying it in December 2024.
Hanwha approved another $400 million for the yard through the end of next year. Hanwha Group chief strategy officer Alex Wong told the Journal the next step is to run commercial and naval yards side by side.
The US builds less than 1% of the world’s ships, and China has more than 230 times its shipbuilding capacity, according to the report. South Korea pledged $150 billion for US shipbuilding as part of its trade deal with Washington.
The details
The money is arriving faster than the ships. Hanwha has pledged $5 billion for Philadelphia, and the yard still turns out only a few vessels a year.
Hanwha announced the $5 billion plan in August 2025, adding two docks and three quays, according to Naval News. The yard was producing fewer than two vessels a year at the time, and Hanwha’s target is up to 20.
Hanwha has doubled the workforce in two years to about 2,500.
The Journal reportedly names high production costs, a shortage of suppliers and limited yard space as the constraints.
The commercial work in the yard today is domestic shipping. Matson christened the first of three Jones Act containerships there this month, and that order is the yard’s main commercial backlog.
Makua is a 3,600 TEU ship for Matson’s Hawaii and China to Long Beach services. The three ships cost about $1 billion together, with deliveries running from Q1 2027 to Q2 2028, reported FreightWaves.
Each ship costs about $330 million, roughly double the price of large containerships built in South Korea or China, Seoul Economic Daily reported, citing the Journal. Apart from Hanwha’s own orders, Matson’s three ships are the yard’s main backlog, per the article.
Adding the three ships “over the next 18 months will improve operating efficiencies,” Matson CEO Matt Cox said at the christening.
Navy work is the second track, and it depends on Washington. Hanwha is a design subcontractor on the Navy’s next-generation logistics ship and this month was picked to build a specialized auxiliary vessel tied to the Golden Dome missile defense program, according to Edaily.
Philly Shipyard can already build naval auxiliary ships and is aiming to be certified for combat ships by 2028.
Hanwha made a non-binding offer of more than $1 billion in August for Austal USA’s yard in Mobile, Alabama, and talks are ongoing.
Senator Dave McCormick, a Pennsylvania Republican, told the Journal the industry needs long-term government buying commitments to rebuild. Congress has not passed the annual defense authorization bill that would fund the orders, and the House and Senate differ on building Navy ships overseas, per Edaily.
HD Hyundai is taking the other route and building a yard from scratch. It announced a joint venture with Kiewit last week for a new shipyard on the Gulf Coast.
HD Kiewit Shipbuilding plans a new yard on an existing industrial site with deep water and Gulf access, according to the companies’ release. Construction is targeted for 2027 and full operations for 2029, with up to 3,000 jobs. The investment was not disclosed.
The yard will build naval auxiliary and commercial vessels and fabricate ship blocks and modules for other US shipbuilders.
China is on track for more than 75% of global new merchant ship orders this year and South Korea about 16% by tonnage, according to Clarksons Research figures cited by Edaily. The current US pause on proposed port fees for China-built ships ends Nov 9, and USTR has proposed extending it into January 2027, PPAI reported.
My notes
The first commercial ships serve Hawaii. Matson’s three Jones Act containerships are the yard’s main commercial backlog. Only US-built ships can carry goods between US ports, so this capacity goes to domestic trades first.
A US-built ship costs about double. Each Matson ship costs about $330 million, roughly double a large containership built in South Korea or China. The Journal points to high production costs, a shortage of suppliers and limited yard space.
The scale gap is large. Hanwha’s target for Philadelphia is 20 ships a year, while China takes more than three-quarters of new merchant orders.
Navy work is the anchor. Hanwha’s naval plans, and its Austal bid, depend on defense orders that still need the authorization bill.
The fees on China-built ships are the link to importers. The current US pause on those fees ends Nov 9 unless USTR's proposed extension takes effect.
What’s next
Matson expects Makua in service early next year. HD Kiewit targets the start of construction in 2027, and the current US pause on China ship fees ends Nov 9 unless USTR’s proposed extension takes effect.
