Peer Review of the Korean Shipbuilding Industry 2026

Executive summary

Trends and overview of the Korean shipbuilding industry

In the early 2020s, global ship completions and orders moderately rebounded from the mid-2010s slump, yet they remained well below the 2008-2011 peak. This recovery was driven by the rebound in seaborne trade volumes and surging freight rates following logistics disruptions during the COVID-19 pandemic. Korea’s share in global ship completions and orders has remained strong at around 20-30%, even during downturns, and rose counter-cyclically in the mid-2010s. In 2024, Korea consolidated its position as the world’s second-largest shipbuilding nation, accounting for approximately 27% of global completions on a compensated gross tonnage (CGT) basis.

Addressing challenges through digital and green innovation

During the shipbuilding recession in the mid-2010s, the Korean government and shipbuilding sector worked together to focus on building high-value ships, such as LNG carriers, to overcome the recession. Currently, the public and private sectors are working together to develop alternative fuel vessels and smart ships, such as maritime autonomous surface ships (MASS), and the Korean shipbuilding industry is expanding overseas to further enhance its competitiveness.

Korean shipbuilders have increasingly specialised in high-value segments, such as LNG carriers and ultra-large container ships (ULCS), reflecting both shifts in global shipping demand and tightening environmental standards, in line with Korea’s industrial policy priorities.

Korea remains highly competitive in high-value shipbuilding, underpinned by strong engineering capacity. However, the industry faces a severe workforce shortage, with employment declining by 44% between 2014 and 2024, and skilled workers accounting for only 28% of the workforce in 2023. To mitigate these labour constraints, major shipbuilders have recruited foreign workers, who now represent approximately 15% of total employment.

The Korean marine equipment industry comprises around 2 700 companies employing 73 000 people, supplying roughly 90% of domestic demand as of 2019, while shipbuilders remain reliant on imports for eco-technology components. In 2022, marine equipment exports reached USD 1.2 billion, primarily to Asia and North America, with China and the United States accounting for 57.7% and 29.3% respectively. Environmental retrofit activities are largely carried out in Korean shipyards.

Sustainability, labour, and government support

Korea is actively promoting ship decarbonisation as a pillar of its industrial strategy, supported by a KRW 9 trillion investment plan that includes funding for green ships. Complementary to the Ministry of Trade, Industry and Resources (MOTIR) (formerly MOTIE) and MOF programmes provide support for private-sector R&D, adoption of fuel-saving technologies, and construction or conversion of environmentally friendly ships to comply with IMO regulations. Korean shipbuilders are at the forefront of orders for low-emission vessels, notably LNG and LPG-fuelled ships, although the share of Korea in global maritime-related patents has recently declined.

In parallel to promoting decarbonisation, the Korean shipbuilding industry is accelerating the integration of smart technologies—including artificial intelligence (AI), robotics, and augmented reality (AR)—to enhance productivity and workforce efficiency amid persistent labour shortages.

The shipbuilding industry remains a strategic pillar of the Korean economy, accounting for about 3% of total exports and manufacturing employment, with strong linkages to equipment manufacturing, steel, and ship finance. While traditionally export-oriented, the share of domestically owned vessels has increased from under 5% in the early 2000s to 15-25% in recent years. Despite a decline in sales revenues, Korean shipbuilders remain optimistic, buoyed by recovering global demand and strong orders for LNG carriers and eco-friendly ships.

The Korean shipbuilding industry remains a major global player, despite a gradual erosion of market share. The sector consolidated during the mid-2010s recession into three major groups: HD Hyundai, Samsung Heavy Industries (SHI), and Hanwha Ocean. During the downturn and restructuring phase, Korea faced a WTO dispute in 2018. These leading firms focus on high-value segments—including LNG carriers, ULCS, Floating Production Storage and Offloading (FPSO) units, and naval vessels—and account for over 90% of national completions. They are pursuing aggressive overseas expansion strategies, with more than 50% of their investments directed toward eco-friendly ship technologies.

The Korean government plays a central and strategic role in supporting the shipbuilding and maritime sectors through regulatory frameworks, technological innovation, and financial instruments. Ministries such as MOTIR and MOF spearhead policies promoting innovation, technology, and shipping competitiveness. Export credit agencies, KEXIM and K-Sure, facilitate export financing and mitigate market risks. The “K-Shipbuilding Strategy” and “Super Gap Vision 2040” outline long-term transformation goals, emphasising R&D in zero-emission vessels, autonomous ships, and smart shipbuilding systems. In 2025, government R&D support is set to increase by 40%, to KRW 260 billion, underscoring the strategic importance of innovation for future competitiveness.

Recent corporate developments illustrate Korea’s global expansion. Hanwha Ocean is expanding into the U.S. shipbuilding market and naval market through mergers and acquisitions in 2024. In 2025, SHI extended production to Viet Nam, and HD Hyundai strengthened its global presence, constructing LNG-fuelled ships under a collaboration with the U.S. shipbuilding and partnering with Saudi Aramco to complete the largest shipyard, but also signing an MoU with Indian shipyards for long-term co-operation. In addition, the Korean government is currently discussing further co-operation with the U.S. shipbuilding industry under the billion USD range package, bearing in mind the ‘Make America Shipbuilding Great Again’.

Competitiveness of the Korean shipbuilding industry

A detailed SWOT analysis of the Korean shipbuilding industry is presented in Chapter 5. The SWOT analysis shows that Korea maintains strong competitiveness in high-value-added vessels, supported by advanced R&D, efficient large-scale production, and a robust policy and ship-finance framework. However, chronic labour shortages and concentrated exposure to LNG, offshore and ultra-large container ships remain key structural weaknesses. Opportunities arise from increasing demand for alternative-fuel and digital vessels, while major threats include China’s rapid ascent, tightening global competition for skilled labour, market volatility and emerging geopolitical constraints. The analysis suggests that sustaining Korea’s competitive position will require strengthening the workforce base and accelerating innovation aligned with the fuel transition and digital transition.