Philadelphia yard aims for combatant-ship certification by 2028
Hanwha has put around $350 million into upgrading the Philadelphia shipyard it bought in December 2024. President Trump has called for a new “Maritime Golden Age” by expanding American shipbuilding capacity, but the United States needs allied help to pull off the turnaround. America’s most ambitious project to date involves Hanwha, and the company is also the only foreign firm to have acquired a U.S. shipyard in recent years.
Hanwha plans to spend billions more and has approved another $400 million in investments through the end of next year. Its Philadelphia operation has faced higher costs, hiring limits and physical-space constraints. Hanwha has nonetheless forged ahead: in August, it made a nonbinding offer valued at more than $1 billion to buy Austal USA’s shipyard in Mobile, Ala. Talks remain ongoing.
At its Philadelphia facility, Hanwha last month agreed with local authorities to expand the facility’s footprint by 40%, or nearly 50 acres, for a new training center and to undertake other upgrades that will expand capacity. Modernizing the site will be necessary if Hanwha succeeds in landing more U.S. Navy orders. Philly Shipyard is already equipped to make naval auxiliary vessels and aims to have fully certified facilities to build combatant ships by 2028.
During his recent shipyard visit, Sen. Dave McCormick was shown a photo of modern welding machines delivered to Philadelphia, replacing decades-old equipment. In the coming months, trainees will be able to learn blasting and painting with virtual-reality equipment sent from South Korea, which lowers costs and exposure to hazardous fumes. By next year, Philadelphia will get dozens more welding carriages, allowing Hanwha to hire bigger groups of workers. Some collaborative robots, or “cobots,” used at Hanwha’s Korea shipyard are expected to be installed in Philadelphia next year.
Hanwha has begun converting upgraded commercial capacity into Navy work. In March, the company won its first project with the U.S. Navy, a subcontract to help with preliminary design for a next-generation logistics ship. Earlier this month, Hanwha and a Florida-based ship-management firm were selected to make a specialized auxiliary ship, with an option to build three more, for Trump’s planned “Golden Dome” missile-defense system. The White House said the entire contract could reach $2 billion.
The goal now is to land more Pentagon orders, said Alex Wong, global chief strategy officer at the Hanwha conglomerate, who focuses on defense initiatives in the U.S. and elsewhere. “Side by side, commercial yard and naval yard,” Wong said. “That’s the next step.”
Global comparisons show how large the gap is. The United States produces less than 1% of the world’s ships today. China, by far the world’s largest ship producer, boasts more than 230 times the shipping capacity of the U.S. Clarksons Research expects China to take more than three-quarters of new commercial ship orders this year based on tonnage, with South Korea No. 2 at roughly 16%. No other country has more than 3%.
Commercial economics remain an obstacle. Woo Jong-hun, a ship-production engineering professor at Seoul National University who works with Korea’s big shipbuilders, said higher production costs and a lack of suppliers will make the United States struggle to become a viable source of commercial ships. For military vessels, he said restrictions limit the market and make the business case to a private company unclear. “No industry in the world has ever been revived through protectionism,” Woo said.
For other South Korean firms, as well as Japanese firms and Washington’s other shipbuilding allies, a key uncertainty is whether they can count on future Pentagon demand. Congress has yet to pass the annual defense bill that would greenlight funding. McCormick has proposed several shipbuilding bills with Democrats and pushed for refurbishing existing U.S. shipyards and building brand-new facilities, but he said companies need certainty that naval orders will actually emerge. “If we’re going to get serious about shipbuilding, we’re going to have to make long-term commitments,” McCormick said. This year, several senior Trump administration and Pentagon officials have visited Philly Shipyard, including acting Secretary of the Navy Hung Cao and Transportation Secretary Sean Duffy.
The White House has proposed major overhauls to how the Navy designs, manufactures and maintains its fleet. Under current U.S. law, naval vessels, with few exceptions, must be manufactured in the U.S. The Trump administration has recommended allowing foreign shipyards that make “substantial and durable” investments in the U.S. to make up to two naval ships in their home countries. In an August White House statement, the administration described America’s commercial building sector as “not globally competitive” and said the industrial base had “atrophied.”
In its version of the defense bill, the House, seeking to stymie potential workarounds, would block funds for any battle-force ships made in foreign shipyards. The Senate’s version includes a proposed amendment granting limited authority to use treaty allies’ shipyards for certain noncombatant ships.
Hanwha and South Korea, for now, represent the clearest outside efforts to spur an American shipbuilding revival. The South Korean government, as part of its trade deal last year with Trump, has pledged $150 billion to improve U.S. shipbuilding. On Thursday, HD Hyundai, a major Korean shipbuilder, created a joint venture with Kiewit, an American construction company, to build an advanced U.S. shipyard starting from next year, with full-scale operations targeted by 2029. Financial terms and the planned site’s specific location were not disclosed.
Sen. Dave McCormick recently visited the main shipyard of South Korea’s Hanwha Ocean, a site bigger and more technologically advanced than any facility in the U.S. Four massive Goliath cranes grabbed hulking ship components. Automated plasma torches cut thick slabs of steel. Bright orange robotic arms fastened bolts onto engine manifolds, pipe flanges and pump housings.
McCormick, a Pennsylvania Republican who is spearheading a push to bring naval manufacturing back to the U.S., has co-sponsored the bipartisan “Ships for America Act.” He was elected in 2024. A former U.S. Army captain and hedge-fund executive, he said the United States has lost its shipbuilding capacity in a generation and needs a jolt to get naval manufacturing back on track. “The world is not going to wait for us to get there,” he said. “We need to move faster.”