South Korean shipbuilders are racing to enter the U.S. Navy’s maintenance, repair and overhaul (MRO) and new shipbuilding markets, as Washington moves to strengthen its naval capabilities through cooperation with South Korea and Japan.
Currently, only HD Hyundai and Hanwha Ocean are authorized to participate in U.S. Navy MRO projects among South Korean firms. However, other shipbuilders are moving to join the field, industry sources said.
With interest growing, several large and mid-sized South Korean shipyards are reviewing applications for a Master Ship Repair Agreement (MSRA) with the U.S. Navy Supply Systems Command (NAVSUP), a prerequisite for bidding on naval maintenance contracts. Companies that secure MSRA certification after a Navy review can participate in a range of MRO projects.
Samsung Heavy Industries and K Shipbuilding are among those considering entry, according to the sources.
“We believe it’s not particularly difficult to obtain an MSRA,” one source said. “Most South Korean shipyards are preparing to enter the U.S. naval MRO and newbuilding markets. Opportunities are expected across a variety of vessel types beyond warships.”
The MSRA application process is becoming faster. HD Hyundai, the first South Korean shipbuilder to secure an MSRA, took more than a year from application to certification. Hanwha Ocean shortened the process to about seven months and won an MRO contract for a logistics support vessel just one month after certification. HJ Shipbuilding & Construction, which applied earlier this year, is now in the final stages of approval.
As of January 2025, the U.S. Navy has eased bidding rules for certain MRO contracts, allowing participation without MSRA certification for logistics support vessels.
Amid these developments, U.S. Navy Secretary John Phelan is expected to visit several shipyards in Geoje, South Korea, later this month. Industry officials believe the visit aims to evaluate shipyard capabilities ahead of potential MRO contract awards.
Separately, a legislative hearing on rebuilding America’s shipbuilding industry is scheduled for May 1. Lawmakers will discuss the Ships for America Act and the Save Our Shipyards Act, with a high likelihood of advancing related bills. Key speakers include Senators Mark Kelly (D-Ariz.) and Todd Young (R-Ind.), and Representative John Garamendi (D-Calif.), who have previously co-sponsored similar measures.
However, concerns about aggressive underbidding are emerging.“As more South Korean shipbuilders compete for U.S. Navy contracts, there is a risk of price wars and losses,” said Kim Dae-young, a military analyst at the Korea Research Institute for National Strategy. “The government should consider intergovernmental consultations on the bidding process, and a consortium approach among shipbuilders could be an alternative.”
According to a March report by the Korea Trade-Investment Promotion Agency (KOTRA), the U.S. Navy’s annual new shipbuilding market is estimated at 43 trillion won ($31 billion), with the MRO market estimated at 11 trillion won ($8 billion).
