K Shipbuilding’s 50,000-ton LNG dual-fuel petrochemical tanker.(Image courtesy of K Shipbuilding)
SEOUL, Sept. 8 (Korea Bizwire) — South Korea’s mid-sized shipbuilding sector is sliding toward collapse, even as opportunities for U.S.-Korea cooperation in naval and commercial shipbuilding expand under initiatives such as the MASGA project, a new report warns.
According to a study released Sunday by the Korea Eximbank’s Overseas Economic Research Institute, orders secured by mid-sized Korean shipyards in the first half of 2025 plunged 72 percent from a year earlier to just 150,000 compensated gross tons (CGT) — limited entirely to six tankers booked by K Shipbuilding.
Other mid-tier players, including Daehan Shipbuilding, Dae Sun Shipbuilding, and HJ Heavy Industries, failed to win a single order.
By comparison, HD Hyundai Mipo Dockyard, categorized as a large builder, secured 27 mid-sized vessels totaling 540,000 CGT, accounting for nearly 79 percent of the entire mid-sized orderbook.
The financial gap is stark. Mid-sized yards’ order value sank to $290 million, down 81.5 percent year-on-year, and their share of newbuilding contracts across the Korean industry fell to 0.8 percent — the first time it has slipped below 1 percent since records began in 2006.
Backlogs also shrank 20 percent in the first half, leaving just two years of work on hand.
Daehan Shipbuilding’s KOSDAQ Listing Ceremony (Image courtesy of Korea Exchange)
The report warns that without intervention, mid-sized shipyards — already weakened by past restructuring and financial constraints — may disappear within a decade.
Their decline, it added, risks destabilizing the shipbuilding supply chain, eroding demand for equipment makers and even undermining the competitiveness of Korea’s major shipyards.
Analysts argue that the sector has strategic importance not only for industrial balance but also for national security. Unlike large carriers, the U.S. military and commercial fleets often rely on small and mid-sized vessels that could be built in Korea’s medium docks, creating significant potential for bilateral cooperation.
“Shipbuilding capacity at the national level cannot be limited to large-scale yards,” the report concluded. “In emergencies, demand for small and mid-sized vessels can far exceed that for supertankers, making support for mid-tier shipbuilders essential.”
The findings highlight a paradox: while Washington looks to Seoul as a partner in expanding naval and commercial ship capacity, South Korea’s mid-sized yards are quietly eroding at home, with calls growing for bold government policy to keep them afloat.
M. H. Lee (mhlee@koreabizwire.com)
