S. Korean Shipbuilders Jointly Bid for Canadian Submarine Contract

Hanwha Ocean and HD Hyundai Heavy Industries submit first-ever joint bid, following the February 2025 formation of the One Team naval export initiative

The first-ever unit of South Korea’s 3,500-ton KSS-3 submarine, ROKS Dosan An Chang-Ho (Source: Defense Acquisition Program Administration)

Canada’s CBC broke the news earlier this week that South Korea’s two largest naval shipbuilders — Hanwha Ocean and HD Hyundai Heavy Industries — had submitted in March 2025 a joint bid for the Canadian Patrol Submarine Project (CPSP). This marks the very first time the South Korean shipbuilders have teamed up for a naval export bid, which is likely the result of their agreement in February 2025 to form a collaborative One Team when pursuing export opportunities.

What is CPSP?

The Royal Canadian Navy (RCN) is looking to acquire up to 12 conventionally powered submarines through a contract valued between CAD 20 billion (USD 14.4 billion) and CAD 24 billion (USD 17.3 billion). While the CPSP has yet to specify the desired displacement, various stakeholders have indicated somewhere between 2,500 tons and 4,500 tons. The first-of-class boat is required to be built by 2035.

Aside from the South Korean duo, competing bidders are known to be primarily European, such as those from Germany (Thyssenkrupp Marine Systems/TKMS), France (Naval Group), Spain (Navantia), and Sweden (Kockums).

South Korea is known to have proposed the 3,500-ton KSS-3 submarines which are currently in service with the Republic of Korea Navy (ROKN), while the Europeans are expected to propose boats of roughly similar displacement, such as the Type212CD, conventional version of the nuclear-powered Suffren class, the S-80, and the C71, respectively.

Why One Team?

The One Team initiative’s establishment was motivated by both shipbuilders’ early exit from the Australian frigate program in 2024. Within South Korea, this embarrassment was largely attributed to the cannibalization between the two companies during the bidding process.

Despite the joint appearance of this bid, the lead contractor for this procurement program may likely be Hanwha. The One Team arrangement was intended to have Hanwha lead all submarine exports with HD Hyundai providing support, while it was to be the reverse for surface vessels. From a theoretical perspective, One Team would combine South Korea’s naval shipbuilding and design prowess, both of which are arguably among the world’s best.

Going forward, it will be very interesting to see how the two shipbuilders go about divvying up the roles and responsibilities as well as how they plan to split the earnings (e.g. revenue- or profit-sharing). It is important to note that the One Team arrangement is not legally binding.

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South Korea has so far had one submarine export customer, Indonesia, which acquired Type 209 variants during the late 2010’s, which were built under license by Daewoo Shipbuilding & Marine Engineering (DSME), Hanwha Ocean’s former entity.