HD Hyundai Heavy Industries (HD HHI) has selected LIG Nex1 as its partner for a naval ship export initiative in Peru, marking a significant shift in alliances as the company positions itself to compete with Hanwha Systems, a leading player in South Korea’s naval combat system sector. This move represents a departure from HD HHI’s long-standing partnership with Hanwha Systems, which has redirected its focus to projects involving Hanwha Ocean and new ventures in naval software development.
On Nov. 28, industry insiders revealed that LIG Nex1 signed a 60-billion-won ($44 million) contract with HD HHI to deliver a comprehensive suite of naval systems, including command and control systems, electronic warfare solutions, and communication equipment. These systems will be integrated into Peru’s 3,400-ton displacement frigate frigate and 2,200-ton offshore patrol vessel, which are to be built locally in partnership with Peru’s state-run SIMA Shipyard. The vessels are scheduled for completion by 2030.
This partnership highlights a significant shift in HD HHI’s strategic approach. Previously, Hanwha Systems had been a key supplier, providing combat systems for HD HHI’s naval projects, such as the Philippine Navy’s two 2,600-ton frigates in 2016 and subsequent upgrades. Hanwha’s systems were also utilized in other projects, including two 3,200-ton patrol ships ordered in 2021 and six 2,400-ton coastal patrol vessels in 2022.
The dynamic between HD HHI and Hanwha Systems began to change in May 2023, when Hanwha Group acquired Hanwha Ocean. By Oct. 2023, HD HHI had signed a memorandum of understanding with LIG Nex1 and Korea Aerospace Industries (KAI) to develop export-driven, next-generation naval vessels. This collaboration focuses on advancing technologies for surface ships, submarines, and hybrid unmanned combat systems, positioning HD HHI to enhance its competitiveness in global naval defense markets.
The deal with LIG Nex1 is the first major milestone of this renewed partnership. LIG Nex1 will supply critical mission systems, including combat management systems and electronic warfare technology. A company representative emphasized that the agreement demonstrates LIG Nex1′s capability to deliver an integrated, high-performance naval combat system.
Looking ahead, HD HHI has been designated as the preferred bidder for additional Peruvian Navy contracts, which include plans to procure five frigates, three offshore patrol vessels, and two amphibious ships. Analysts view this as a strategic opening for LIG Nex1 to secure further deals in the region.
Meanwhile, Hanwha Systems is diversifying its portfolio to tap into new markets. The company recently signed a memorandum of understanding with HJ Shipbuilding & Construction to co-develop export-oriented naval vessels, targeting markets in the Middle East and Southeast Asia.
HJ Shipbuilding & Construction has a distinguished legacy in South Korea’s naval industry, having delivered the nation’s first domestically produced patrol vessel in 1972. The company has since built a range of naval assets, including large transport ships, frigates, and high-speed boats. Its recent achievements include the completion of 16 Patrol Killer Experimental-B (PKX-B) high-speed boats for the South Korean Navy, with contracts secured for eight additional vessels under the PKX-B Batch-II program.
