Hanwha Ocean Expands US Shipbuilding Amid Investment Challenges

South Korean shipbuilder Hanwha Ocean is expanding its presence in the US maritime industry as President Donald Trump's administration seeks to rebuild domestic shipbuilding capacity. The Wall Street Journal highlighted the company's investments and naval contracts in a report published October 25, 2026, while identifying high production costs and uncertainty over future defense spending as major obstacles to expansion.

The United States accounts for less than 1% of global shipbuilding, according to The Wall Street Journal, while China has more than 230 times the US shipbuilding capacity. The Trump administration has outlined plans to strengthen American shipyards and establish what it calls a maritime golden age.

Hanwha acquired Philly Shipyard in Philadelphia, Pennsylvania, in December 2024 and has invested approximately $350 million in facility upgrades. The company plans to commit several billion dollars more, while the South Korean government pledged $150 billion in investment last year to support US shipbuilding under a bilateral trade agreement.

Sen. Dave McCormick, a Republican from Pennsylvania working with the Trump administration on shipbuilding policy, told The Wall Street Journal that restoring the industry's capabilities requires urgent action.

“The world won’t wait for us to get there,” McCormick said, emphasizing the need to accelerate the recovery of American shipbuilding.

Hanwha has also secured roles in US naval programs. In March 2026, the company joined the US Navy's next-generation logistics support vessel program as a subcontractor. Earlier in October, it was designated as a builder of specialized auxiliary vessels associated with the Golden Dome missile defense system.

Philly Shipyard can already construct naval auxiliary vessels and is targeting certification to build combat ships by 2028. Hanwha is also pursuing further expansion through a proposed acquisition of Austal USA's shipyard in Mobile, Alabama, for more than $1 billion. The company submitted the offer in August 2026, and negotiations remain ongoing.

Despite these developments, The Wall Street Journal identified several operational constraints at Philly Shipyard, including elevated manufacturing costs, a limited supplier network and restricted yard space. These issues could complicate efforts to expand production as the company pursues additional US defense contracts.

Uncertainty surrounding federal procurement plans presents another challenge. The US Congress has not advanced its defense budget legislation, making it difficult for shipbuilders to determine the Pentagon's long-term demand. Differences between the House and Senate over funding for combat vessels constructed at foreign shipyards have also raised concerns about future investment conditions.

The Wall Street Journal reported that South Korea and Japan need greater certainty about future Department of Defense orders to justify expanding their shipbuilding operations in the United States. Hanwha is the only foreign company to have acquired a US shipyard in recent years, according to the newspaper.

Alex Nelson Wong, Hanwha Group's chief strategy officer, said the company's immediate priority is to secure additional contracts from the US Department of Defense. He also described the company's longer-term approach to expanding its American shipbuilding operations.

“The next step is to have commercial and naval shipyards side by side,” Wong said.

Meanwhile, Hanwha Ocean shares declined during early trading on October 26, 2026, despite the attention surrounding its US expansion. According to the Korea Exchange, the stock traded at 54,100 won at 9:17 a.m. local time, down 2.17% from the previous session.

Market analysts attributed the decline to weakness in the broader KOSPI market and shipbuilding stocks, as well as concerns that a stronger South Korean won could reduce exporters' profitability.