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Korea's sixth and last Aegis destroyer closes a 19-year program led by HD Hyundai Heavy
South Korea launched the Daeho Kim Jong-seo at HD Hyundai Heavy Industries' Ulsan yard, the sixth and last ship of its 19-year Aegis destroyer program. President Lee Jae-myung named nuclear-powered submarines as the Navy's next core asset, so the yard's next multi-year naval order depends on that pledge becoming a funded program.
The Investor · Invest desk
What happened
- The Jeongjo the Great-class can operate sea-based ballistic missile interceptors, while the earlier Sejong the Great-class ships could only detect and track missiles.
- After sea trials the ship is due for Navy delivery in December next year, completing a fleet of three Sejong-class and three Jeongjo-class destroyers.
- The Daeho Kim Jong-seo is 170 meters long and 21 meters wide, displaces about 8,200 tons light and can make up to 30 knots.
- The launch came as security threats mounted after a landmine explosion in the Demilitarized Zone along the western front, Sedaily reported.
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Why it matters
- constraint HD Hyundai Heavy's destroyer work on this program runs out at the December handover, so its next naval backlog has to come from programs that exist today only as presidential pledges.
- decision Whoever Seoul picks to build Lee's nuclear-powered submarines will decide whether the incumbent's hold on Korean Aegis hulls carries into the next naval program.
- precedent If Lee's promise to cut complicated procedures holds, the next programs would be expected to reach service faster than the Aegis line did, at six ships in 19 years.
Six hulls in 19 years works out to about one Aegis destroyer every three years [2]. Five of them came from HD Hyundai Heavy Industries [2], about 83 percent of the program by hull count [1]. For one builder, that was steady work across 19 years, and it ends with this ship [1]. Shin Beom-chul, a senior research fellow at the Sejong Institute, said the milestone means "the Navy's Aegis destroyer force structure has effectively entered its final stage." [16]
The case for a new multi-year order book rests on a later passage of Lee's speech. "Going forward, our Navy will steadily secure core assets of self-reliant defense, including nuclear-powered submarines and manned-unmanned mother ships," he said [6]. Lee also said: "There was a time when we borrowed, and a time when we bought. Now the Republic of Korea has become a country that designs, builds and operates the world's finest warships on its own." [10] Neither report gives a budget, a hull count, a schedule or a builder for the submarines or the mother ships.
The destroyer itself still has spending ahead of it, or more precisely, missiles. According to Sedaily, it can stop ballistic missiles only once its interceptors are loaded, and it gains long-range strike against North Korean targets once ship-to-ground ballistic missiles are fully installed [13].
In the version the order-book reading needs, the submarine pledge [6] becomes a funded program and goes to the incumbent at Ulsan [3]. Alternatively, the submarines go to a different yard or spend years in design, and HD Hyundai Heavy's destroyer work tapers after the handover next December [5]. Or the money Lee described tilts toward electronics. The ship is "packed with radar that detects targets hundreds of kilometers away, weapons systems that analyze hundreds of targets, and the software that ties it all together," he said [11].
Lee's remarks on industry lean toward that third path. He said the country "must move advanced private-sector technology into the defense sector quickly" [9] and promised to "actively widen the path for academia and companies, not just the military, to conduct research and invest together" [8]. The second promise asks companies to put up their own money alongside the military's.
In my view the record today supports the second and third paths better than the first. The destroyer line is finished, and the submarine line exists only as a pledge in a speech. The counter-case is the incumbent's record and its chairman's confidence. Chung Ki-sun, chairman of HD Hyundai Heavy Industries, said the company would "firmly safeguard South Korea's economy and security with a sense of duty that we are the ones building the ships that guard the world's seas." [12] A budget line or contract that assigns the nuclear-powered submarines to HD Hyundai Heavy, with a hull count attached, would prove this view wrong.
What to watch
- Who supplies the ballistic missile interceptors and ship-to-ground missiles the Daeho Kim Jong-seo still needs before it can intercept or strike.
- Whether the manned-unmanned mother ships reach a design or tender stage before the submarines do, and which yards bid.
- Whether HD Hyundai Heavy Industries reports new naval orders in the period after the December handover.