Driven by the shipbuilding boom, South Korea’s three largest marine engine manufacturers—HD Hyundai Heavy Industries, HD Hyundai Marine Engine, and Hanwha Engine—achieved near 100% capacity utilization for the first time. This was due to meeting the marine engine demand of the two global shipbuilding powerhouses, China and South Korea.
According to the semi-annual reports of South Korea’s three major marine engine manufacturers, their capacity utilization rates for the first half of 2025 were as follows: HD Hyundai Heavy Industries (Engine Machinery Division) 151.2%; HD Hyundai Marine Engine (Marine Engine Division) at 90.9%; and Hanwha Engine at 104.2%.
Specifically, the largest increase was seen in HD Hyundai Marine Engine, which was established in September 2024 after HD Korea Shipbuilding & Offshore Engineering (HD KSOE) acquired STX Heavy Industries. Prior to the acquisition, in the first quarter of 2024, HD Hyundai Marine Engine’s capacity utilization rate was only 34%, but it steadily rose to 64.6% thereafter, and increased to 86.1% in the first quarter of this year.
HD Hyundai Heavy Industries’ Engine MachineryDivision has consistently maintained a capacity utilization rate of over 100%, with continued growth momentum. The figures for the past five years are as follows: 148.4% in 2024, 129.2% in 2023, 101.6% in 2022, 100.2% in 2021 and 101.9% in 2020.
Hanwha Engine exceeded 100% capacity utilization for the first time in the first half of this year. In the past five years, the rates were: 94.1% in 2024, 93.9% in 2023, 94.6% in 2022, 60.2% in 2021, and 82.7% in 2020. Thanks to the boom cycle of the shipbuilding industry, its capacity utilization rate began to show a vertical upward trend.
South Korean media reports state that South Korea’s three major marine engine manufacturers regard Chinese shipyards—whose global shipbuilding market share has been steadily rising—as their “core major clients.” In the first half of this year, among the key clients that account for 50% of HD Hyundai Marine Engine’s operating revenue, all except K Shipbuilding and Hanwha Engine are Chinese shipbuilding and logistics enterprises. Operating revenue generated from the Chinese market accounts for 47% of the total operating revenue, nearly half.
For Hanwha Engine, excluding internal demand from its affiliate Hanwha Ocean, revenue from the two Chinese shipbuilders accounted for 14% of total revenue.
While HD Hyundai Heavy Industries hasn’t specifically listed its main engine customers, it has established a new department focused on the Chinese market as demand grows. The company explained, “Due to a significant increase in the share of new ship orders from Chinese shipyards, we have established a new China Engine Technical Service Department to strengthen our sales and service capabilities in the region.”
As market demand continues to grow, HD Hyundai Marine & Engineering and other companies are actively responding by expanding their facilities. Hanwha Engine plans to invest 76.6 billion won in 2025 and 200 billion won in 2026, which will increase its production capacity by 20%. HD Hyundai Marine & Engineering plans to invest 14.7 billion won in environmentally friendly engine production facilities.