South Korean media reports indicate that the South Korean government plans to select a prime contractor for its nuclear-powered submarine program in the second half of 2027, utilizing a “company-led competitive bidding” process. Industry analysts estimate the project’s value to be at least 20 trillion KRW (approximately $15.01 billion), with HD Hyundai Heavy Industries and Hanwha Ocean expected to compete fiercely for the contract.
The Defense Acquisition Program Administration (DAPA) recently held its 179th Defense Acquisition Program Promotion Committee meeting at the Ministry of National Defense, where it reviewed and approved the “Basic Strategy for the Jang Bogo-III Batch-III Project.” DAPA has decided to pursue the project through a competitive mechanism rather than a single-source contract.
According to the timeline established by DAPA, the agency will first issue a tender for the “Jang Bogo-N (KSS-III Batch-III) Project” (referred to as the “South Korean nuclear-powered submarine project”). A winning bidder is expected to be selected in the second half of 2027, followed by the signing of a final construction contract.
South Korean media previously reported that the country’s first nuclear-powered submarine is slated for launch in the mid-2030s, with entry into service expected by the late 2030s. It is speculated that an initial batch of three vessels may be built, with a full-load displacement potentially exceeding 8,000 tons; however, these figures regarding the number of vessels and their tonnage have not been officially confirmed.
DAPA has clarified that the contractor for South Korea’s nuclear-powered submarine project will not be responsible for supplying the Small Modular Reactor (SMR). As the power source for the submarine—and the component with the most stringent safety requirements—the SMR will be developed under the direct leadership of the South Korean government and subsequently provided to the system integrator as “government-furnished equipment.”
Due to the classified nature of the project, the total cost has not been disclosed; however, industry estimates in South Korea suggest a figure ranging from at least 20 trillion KRW (approximately $15.01 billion) to as much as 29 trillion KRW (approximately $21.75 billion).
On October 30, 2025, U.S. President Trump stated on social media that he had approved South Korea’s construction of nuclear-powered submarines to replace its aging diesel-powered fleet, adding that “South Korea’s nuclear-powered submarines will be built at the Hanwha Philly Shipyard in the United States.”
However, the South Korean government has explicitly stated that the country’s nuclear-powered submarine project will be assigned to domestic shipyards, citing the fact that Hanwha Philly Shipyard—a U.S.-based facility controlled by a South Korean firm—currently lacks the capability to construct nuclear-powered submarines. This means the competition will take place between HD Hyundai Heavy Industries and Hanwha Ocean.
According to South Korean media, Hanwha Ocean has signed a contract with the Agency for Defense Development (ADD) for the preliminary design of a nuclear-powered submarine, with plans to complete this phase by the end of 2026.
HD Hyundai Heavy Industries and Hanwha Ocean have long been competitors in South Korea’s defense shipbuilding sector. Over the past two years, the two companies have been engaged in fierce competition for the contract to provide detailed designs and build the lead ship for the first batch (Ships 1–3) of South Korea’s Next-Generation Destroyer (KDDX) program.
During the bidding process, Hanwha Ocean narrowly won by a margin of 0.5867 points, while HD Hyundai Heavy Industries was eliminated after having an additional 1.2 points deducted from its safety score. The additional deduction for HD Hyundai Heavy Industries was related to a case in which one of its employees was convicted of leaking military secrets.
Given the history of bidding rivalries between HD Hyundai Heavy Industries and Hanwha Ocean, South Korean media believe that this nuclear-powered submarine contract—with a budget exceeding 20 trillion KRW—will once again draw intense attention and spark fierce competition between the two shipbuilders.