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Hanwha Systems unleashes Sea Ghosts in unmanned naval push beyond Korea

Published: 21 Jul. 2025, 07:00

CHO YONG-JUN
[email protected]

Hanwha System's Unmanned Surface Vehicles are in demonstration in 2024 [HANWHA SYSTEMS]

[NEXT CHIP]

For decades, semiconductors and automobiles have dominated Korea’s exports, driving growth and defining its global trade identity. But as shifting global dynamics and mounting uncertainties over U.S. tariffs unsettle traditional trade patterns, a new industrial order is taking shape. Sectors such as shipbuilding and defense are emerging as the next engines of growth. In our “Next Chip” series, we examine the rise of these industries and their potential to reshape Korea’s economic future.

In a striking display of technological coordination, ten unmanned surface vessels (USV) glided across the waters near Changwon, Korea, moving not as isolated machines but as a single, intelligent fleet. Hanwha Systems' demonstration of its USV swarm operation in November 2024 marks a milestone in its unmanned naval vehicles as it sees the segment as a fresh source of revenue and export item on top of its mainstay business centered around multi-function radars and missile defense systems.

Hanwha Systems, a defense electronics affiliate of Hanwha, is now targeting the European continent with its expansive lineup of unmanned naval systems, alongside Asia, the Middle East and potentially North America. In fact, a delegation of the Greek Hellenic Armed Forces had already paid visits to Korea in May to see a demonstration of Hanwha Systems' "Sea Ghost" USVs, one aspect of an autonomous naval vessel market worth approximately $1.65 billion according to Global Market Insights, and is projected to more than double to $4.09 billion by 2034.

Hanwha System's Unmanned Surface Vessel [HANWHA SYSTEMS]

U.S. push with acquisitions

For a U.S. market entry, Hanwha's strategy is centered around acquisitions of assets that already have an established presence in the country.

Hanwha Systems acquired a 60 percent stake in Philly Shipyard, a Philadelphia, Pennsylvania-based shipyard, in late 2024, while shipbuilding affiliate Hanwha Ocean acquired 40 percent. With its parent firm Hanwha Aerospace, the company holds a 19.9 percent stake in Australia-based shipbuilder Austal, one of the four largest providers to the U.S. Navy, including the Independence-class combat ships.

“The common denominator of the two — other than them both being a shipyard — is that they are related to the United States,” Choi Byung-woong, director of the naval business division at Hanwha Systems, said.

Hanwha Systems Naval Business Director Choi Byung-woong [HANWHA SYSTEMS]

With the ownership of Philly Shipyard, both Hanwha Systems and Hanwha Ocean are considering building naval ships, although regulatory hurdles need to be resolved.

Hanwha Philly Shipyard CEO David Kim told reporters in Philadelphia Wednesday that the company "in discussion" about joining the U.S. Navy's combat support ship construction project, adding that ir had "already submitted two to three" requests for information and would continue to do so.

The acquisition of Philly Shipyard is beneficial to Hanwha, as a shipyard located in the United States can bypass U.S. import tariffs. It also has the possibility of getting around the Jones Act, which only allows U.S.-built, U.S.-owned, U.S.-flagged and U.S.-crewed ships to be used to transport goods within the country, and the Buy America Act, which prioritizes federally contracted products built in the United States.

The Austal situation, however, is more complicated, as the acquisition of a defense firm by a foreign company is subject to approval from government entities and counterintelligence agencies — it is also the reason why Austal originally declined Hanwha’s $662 million takeover offer in 2024.

With the Committee on Foreign Investment in the United States giving Hanwha’s takeover of Austal the go-ahead in June, the firm still requires approval from Australia’s Foreign Investment Review Board and the Defense Counterintelligence and Security Agency in the United States.

But entering the U.S. market is not easy, especially for Hanwha Systems, which focuses on unmanned and control software for mission autonomy, which involves vessels completing missions in battle, and platform autonomy, which refers to physically moving the ships.

Hanwha Systems Naval Business Director Choi Byung-woong [HANWHA SYSTEMS]

Choi acknowledged that exporting software for mission autonomy to the U.S. military may be difficult, as that effectively gives foreign firms access to U.S. strategy and plans.

“But the bar on engineering control systems may be lower, since that’s about controlling the mechanics of the ships,” he said. “So, we are looking long-term and we believe we will have more opportunities in 10 or so years.”

Hanwha Systems' Combat Management System on display [HANWHA SYSTEMS]

Offering a comprehensive set

Still, Hanwha Systems believes that the firm's technology can give it the upper hand. Its autonomous technology, based on different Lidar, Radar and optical sensors, can uniformly control a swarm of vessels, undock and berth as well as maneuver to avoid big waves.

"Are we the only firm in the world that has such technology? No. But it's rare for one firm to have all the technologies at hand," Choi said, adding that Hanwha Systems' technology, while still in its development phase, is "comparable to the technology that European and U.S. firms have."

Similar to how drones and unmanned aerial vehicles are proving their effectiveness in the battlefields of Ukraine, the naval industry is also slowly shifting into a replacement phase from human input to AI, while having the unmanned systems work with a conventional manned force, known as manned-unmanned teaming (MUM-T).

"You also need remote control technologies for the unmanned vessels," he said. "The MUM-T solution is about manned vessels controlling multiple unmanned surface vehicles and submarines to complete missions. That’s where the trend is and that’s the sector we are increasing our investments in."

With platform autonomy, Choi thinks the company is "about 90 percent there in terms of achieving autonomy in platform movement,” adding that Hanwha Systems would have to constantly update its software for “more complex scenarios.”

For the mission autonomy, Choi said the firm’s software can be applied in the real world “up to a certain point,” but as it requires the use of artificial intelligence for complete autonomy, it would have to be constantly developed and improved upon.

Hanwha Systems signed a memorandum of understanding with five institutions and five firms in July, including Seoul National University, KAIST, Yonsei University, the Air Force Academy and Naver, to research and develop a Korean AI for military use.

"If we can develop a dedicated AI for the military and merge it with the platform software that Hanwha Systems already has, we will be able to provide a more full-fledged AI solution," Hanwha Systems' spokesperson said.

Hanwha System's Unmanned Surface Vehicles are in demonstration in 2024 [HANWHA SYSTEMS]

For the time being, Choi said Hanwha Systems will have to continue to develop and expand its unmanned system portfolio.

“We are currently working to increase our scale from smaller vessels to larger vessels, and at the same time, we will be constantly attempting to sell our products overseas,” he said.

“Because the unmanned systems business is still in the early stages, I think we can try to get some market share as the market grows in the next three to five years.”

"It’s also not about whether the industry will or will not go unmanned, but more like when it will go unmanned, so Hanwha Systems will have to be prepared for the paradigm shift, to be the leader in the global naval defense industry."