Michael Coulter, the new CEO of Hanwha Defense USA, which oversees Hanwha’s defense industry operations in the United States, told the Wall Street Journal (WSJ) on Jan. 8 (local time), “We are actively negotiating with the U.S. Department of Defense for contracts related to manufacturing surface ships, submarines, and unmanned vessels,” adding, “We need more space and are seriously considering acquiring other shipyards in the United States within a few years.”

This is because Hanwha believes that the production capacity of Philly Shipyard, acquired in December 2024, will not be able to keep up with the rapidly increasing demand for new ship construction in the United States. Philly Shipyard has only two docks capable of building ships. While Korea could produce nearly 10 ships annually from one dock, Philly Shipyard can only produce 1 to 1.5 ships per year due to outdated facilities. This means that one dock cannot even produce a single ship in a year.

Hanwha plans to invest $5 billion (approximately 7 trillion won) in the future to modernize facilities and increase annual construction capacity to around 20 ships to expand the production capacity of Philly Shipyard. As this is a medium-to-long-term plan, Hanwha is negotiating with federal and state governments to expand the production facilities and site of Philly Shipyard. The company is discussing methods such as utilizing unused or underutilized docks at shipyards in the Philadelphia area, and the acquisition of new shipyards is also being considered as part of this capacity expansion effort.

According to the U.S. Congressional Budget Office, the U.S. Department of Defense has submitted plans to Congress to purchase a total of 364 vessels by 2054, including 293 combat ships and 71 combat logistics support ships. With plans to order more than 10 vessels annually, the current construction capacity of Philly Shipyard would be insufficient to handle this scale.

Industry analysts suggest that Hanwha’s consideration of additional shipyard acquisitions is aimed at nuclear submarine construction. The U.S. government plans to build more than 40 additional nuclear submarines in the future, and President Donald Trump has emphasized that South Korea’s nuclear submarines will be built in the United States, making this preparation necessary.

Furthermore, if the currently bidding 60 trillion won Canadian next-generation submarine project (CPSP) goes to Team Korea, Philly Shipyard alone would clearly have limitations. An industry insider said, “Since it may be difficult to build nuclear submarines at Philly Shipyard, which has insufficient construction capacity, additional facility acquisition must be considered,” adding, “The risks are not significant given the considerable demand beyond nuclear submarines.”

Hanwha is steadily preparing for the MASGA project by securing additional production facilities and pursuing orders for unmanned surface vessels, which have emerged as a new market. Hanwha Defense USA has established a cooperative relationship with HaiBuk AI, a U.S. company specializing in unmanned vessel (drone) software, to develop 200-foot (approximately 60-meter) unmanned vessels and pursue supply contracts for unmanned surface vessels with the U.S. Navy. The U.S. Navy announced in 2023 a shipbuilding plan to establish a fleet consisting of 381 manned vessels and 134 unmanned surface and underwater vessels over the next 30 years.