The companies signed a memorandum of understanding on Tuesday at the headquarters of the Defense Acquisition Program Administration in Gwacheon.
Under the agreement, HD Hyundai will take the lead in exporting surface vessels, while Hanwha Ocean will oversee submarine exports, leveraging their respective areas of expertise.
The partnership follows a setback for both firms last year, when they failed to secure a contract for Australia’s new frigate program, an estimated 10 trillion won ($6.99 billion) project. The deal ultimately went to consortiums from Japan and Germany, which had submitted unified bids.
HD Hyundai has produced 102 surface vessels for naval applications, while Hanwha Ocean has built 23 submarines, making them the country’s foremost shipbuilders in their respective categories.
The collaboration could position the companies to capitalize on the $1.11 trillion U.S. naval vessel market.
A bill introduced in the U.S. Congress would allow South Korean shipyards to construct American warships, a potential breakthrough for the industry beyond its traditional role in maintenance contracts.
Analysts also expect the partnership to accelerate progress on South Korea’s next-generation destroyer program, known as KDDX, an 8 trillion won initiative aimed at bolstering the country’s naval capabilities and strengthening its defense industrial base.
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