South Korea’s major shipbuilders, facing years-long order backlogs and fully booked shipyard capacities, are turning to overseas subcontracting to meet growing demand. With the shipbuilding boom expected to continue, companies are strategizing to prioritize high-value vessel production domestically while outsourcing standardized vessel construction to foreign partners.
According to industry sources, Hanwha Ocean visited India last month at the invitation of the Indian government, touring Swan Engineering, Cochin Shipyard, Hindustan Shipyard, and L&T Shipyard over a ten-day period. This follows an earlier visit by an Indian delegation to South Korea, where key shipyard officials explored collaboration opportunities with Hanwha Ocean, HD Hyundai Heavy Industries, and Samsung Heavy Industries.
Hanwha Ocean, which secured orders for nearly 40 merchant vessels last year—including 19 LNG carriers, six container ships, eight tankers, and five LPG carriers—expects to maintain a three-year order backlog. With its Geoje shipyard at full capacity, the company is evaluating the feasibility of shifting some orders to Indian shipyards. However, India’s shipbuilding technology remains a key factor, as local yards currently specialize in small- to mid-sized vessels and would require technology transfer from South Korean firms to handle larger ships.
Meanwhile, Samsung Heavy Industries has already outsourced four Suezmax tankers—valued at 459.3 billion won ($343 million)—to China’s Zhoushan shipyard, utilizing local infrastructure and labor for production. Samsung Heavy, which has a three-year order backlog, has set a 2024 order target of $9.8 billion, with plans to focus on high-value vessels while subcontracting tankers and container ships.
A shipbuilding industry source noted that Samsung Heavy can leverage Chinese shipyards due to its lack of involvement in defense projects, while Hanwha Ocean and HD Hyundai Heavy Industries, both eyeing potential U.S. warship contracts, are favoring India over China for outsourcing.