News last week that South Korea will construct its own nuclear-powered submarines in the US took many by surprise, including it seems many South Koreans.
South Korean shipbuilder Hanwha Ocean intends to build the first nuclear-powered boats at its recently acquired shipyard in the US city of Philadelphia.
ADM understands that the new nuclear-powered submarines are informally referred within Korean shipbuilding circles as KSS-IV, following the KSS-III conventional attack submarines. Seoul’s current thinking is to build ‘at least’ four boats.
The prospect of South Korean nuclear-powered boats creates several interesting possibilities for Seoul’s relationship with Australia, as well as for AUKUS and Australia’s own submarine capabilities.
First, whilst much of the coverage has focused on Hanwha Ocean’s intent to build the ROK submarines in Philadelphia, this coverage has missed a detailed but crucial principle governing South Korean defence procurement: industrial duplication.
When South Korean shipbuilders design a warship or submarine, they subsequently hand the design to the all-powerful Defence Acquisition Program Administration, or DAPA.
DAPA then licenses the design to direct competitors and mandates a ‘lead yard, follow yard’ build program. Take for example the KSS-III submarine program: Hanwha Ocean built the first two Batch 1 boats, and the last KSS-III Batch 1 boat was built independently and delivered by HD Hyundai Heavy Industries last year. Hanwha Ocean launched the latest KSS-III two weeks ago, the ROKS Jang Yeong-Sil, which is the first KSS-III Batch 2 boat.
This principle maintains the nation’s ability to manufacture two submarines simultaneously at two different shipyards. In practice, this means that both companies alternate builds (between odd and even numbered submarines) but largely share the same domestic supply chain.
In other words: while Hanwha Ocean may build the first nuclear-powered submarine(s) for South Korea in Philadelphia, later boats are likely to be built in South Korea - potentially by both Hanwha Ocean and HD Hyundai Heavy Industries. It is very possible that the second or third nuclear-powered boats will be built by HD Hyundai in Ulsan.
HD Hyundai recently announced its merging plan for its Mipo subsidiary, which operates several docks adjacent to the huge ten-dock Ulsan shipyard. Once the extant commercial build program is completed in 2027 those new docks will become available to HD Hyundai’s Naval and Special Ships business, making the combined shipyard one of the largest naval manufacture and sustainment centres globally.
For its part, Hanwha Ocean operates the huge Geoje shipyard in Okpo, including what it says is the world’s largest dock.
Why does this matter? Well, as the South Korean boats will also rely on US tech, South Korea’s two largest shipyards may soon gain the ability to build and sustain certain overlapping technologies in US and Australian nuclear-powered attack submarines.
Equally, Australia may be able to sustain the same elements of South Korean nuclear-powered submarines at the Henderson precinct in Western Australia; and South Korea may seek access for its nuclear submarines to the new facilities at HMAS Stirling.
Additionally, the Australian government is seeking commercial investment in Henderson to find the $25 billion required for the precinct to provide contingency docking for the RAN’s future nuclear-powered subs, as well as build surface ships and landing craft; and both Hanwha Ocean and HD Hyundai are large, hungry conglomerates looking to invest.
Hanwha Ocean is already looking to double its stake in Austal with an eye on the Australian company’s US yards; HD Hyundai remain interested in the Australian and NZ naval markets (note the NZ Anzac class replacement), and have recently launched a multi-billion-dollar maritime investment program alongside Cerberus Capital Management and Korea Development Bank.
Finally, South Korea’s success in winning US approval for nuclear propulsion may prompt Japan to seek the same.
Of course, much must happen before any of this, and developing the first ROK nuclear-powered boat will take at least a decade (though the possibility of the first Korean SSN entering the water before SSN AUKUS must be causing angst in Canberra).
But the first and most surprising event has already occurred: the US will grant South Korea access to nuclear-powered submarines. The rest is easier to imagine.
Edited 6 Nov, 2050