HD Hyundai Heavy Industries, one of South Korea’s major shipbuilders, has secured its first maintenance, repair, and overhaul (MRO) contract with the United States Navy, marking the first bilateral cooperation since the South Korean government proposed the Make American Shipbuilding Great Again (MASGA) initiative during recent tariff negotiations between the two countries.
The company said on Aug. 6 that it signed a contract to service the “USNS Alan Shepard (T-AKE-3),” a 41,000-ton Lewis and Clark-class dry cargo ship. Maintenance work is set to begin next month at the company’s Ulsan shipyard, with delivery scheduled for November. It is HD Hyundai Heavy Industries’ first MRO contract with the U.S. Navy.
The contract follows Hanwha Ocean’s successful completion of a similar MRO project last year and underscores the U.S. Navy’s ongoing efforts to engage South Korean shipbuilders as strategic partners.
As the world’s largest single-site shipyard, HD Hyundai Heavy Industries’ entry into the U.S. Navy’s MRO market is seen as a pivotal development in the global shipbuilding industry. The move is expected to intensify competition for the MRO market valued at an estimated 20 trillion won ($14.3 billion) annually and may open the door to future collaboration in naval ship construction.
Under the terms of the current contract, the company will carry out work on the vessel’s propeller systems, perform inspections on various tanks, and conduct onboard equipment maintenance. While the scope of work is not technically demanding, even routine upkeep has faced frequent delays in the United States due to the country’s deteriorating shipbuilding infrastructure.
MRO contracts for the U.S. Navy’s non-combat support vessels—such as the one awarded to HD Hyundai Heavy Industries—typically amount to tens of billions of won, significantly less than the approximately 350 billion won ($252 million) cost of a single liquefied natural gas (LNG) carrier. Nevertheless, such contracts are considered critical in the broader competition for future shipbuilding partnerships, particularly amid the shifting dynamics created by initiatives like MASGA.
South Korea is also advancing efforts to strengthen its domestic MRO supply chain. In May, Hanwha Ocean established a naval MRO cluster council at its Geoje shipyard, partnering with 15 shipyards and specialized equipment companies in the Busan and South Gyeongsang regions, including HSG Sungdong Shipbuilding and SK oceanplant. The initiative aims to enhance component manufacturing capabilities through collaboration with more than 1,000 local firms.
Last month, HJ Shipbuilding & Construction, a mid-sized shipbuilder based in Busan, formed a similar MRO cluster council in partnership with approximately 10 companies. The group plans to cooperate in future MRO contract bids.
While current U.S. regulations prohibit the overseas construction of American naval ships, legislative efforts are underway in Congress to revise the law to allow allied nations such as South Korea to participate in military shipbuilding. Industry officials note that a strong MRO track record could position South Korean firms advantageously should such restrictions be lifted.
Competition in the MRO sector is expected to intensify, particularly with countries like Japan and Singapore. Japan has long served as a primary MRO base for the U.S. Navy’s 7th Fleet, operating out of Yokosuka near Tokyo Bay. Singapore, meanwhile, has leveraged its strategic location and has steadily cultivated a robust MRO cluster within its shipbuilding industry.