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'Submarine war' with Germany heats up in race for Canadian contract

Published: 27 Nov. 2025, 12:15 Updated: 27 Nov. 2025, 18:31

Commander of the Royal Canadian Navy Vice-Admiral Angus Topshee, second row second from left, is joined by Korean Navy personnel during a tour of the Dosan Ahn Chang-ho submarine on Oct. 31. [YONHAP]

With Korea ultimately eliminated from Poland’s bid to upgrade its naval capabilities with the Orka submarine procurement initiative, Seoul has launched an all-out campaign to beat Germany for a 60 trillion won ($40.9 billion) Canadian submarine contract. A much larger project, the Canadian deal offers both countries a win after Sweden swooped in for the Polish bid.

Germany, the world's fifth-largest defense exporter, has made a bold proposal to provide finished products, while Korea is responding with its specialty — speed — promising to supply one submarine per year.

According to multiple military and industry sources on Wednesday, Germany proposed a bold "gap filler" approach to Canada: providing Canada with finished products to bridge the production gap between older and newer models. The two sides' strategies can be summarized as Germany pitching the "gap filler" model, while Korea emphasizes its ability to deliver “one submarine per year.”

Germany’s TKMS, formerly Thyssenkrupp Marine Systems, is targeting Canada with the substitute approach. For Canada, the focus is on rapid delivery and integration into the local defense industry.

With Canada’s active submarines expected to retire around 2035, time is tight. Germany reportedly offered to reassign one of its own submarines scheduled for domestic deployment. Specifically, it proposed diverting the third of six stealthy 2,500-ton 212CD submarines it is co-developing with Norway — originally intended for German use in 2028 — to Canada.

The 212CD, a 2,500-ton stealth diesel submarine jointly developed by Germany and Norway, is seen in this file photo provided by TKMS [TKMS]

Korea, meanwhile, is leaning into speed. Hanwha Ocean and HD Hyundai are promising to deliver submarines within six years of a contract signing. Korea would hand over the first KSS-III Jang Bogo-III submarine in 2032 and three more by 2035.

Afterward, one submarine would be built annually through 2043 for a total of 12. These 3,000-ton Batch-II diesel-electric submarines can remain submerged for more than three weeks.

Korea is competing with Germany in Canada's submarine program, which is valued at an estimated 60 trillion won. The Canadian navy plans to replace its four 2,400-ton Victoria-class submarines with up to 12 new 3,000-ton diesel-electric submarines by the mid-2030s.

Including 30 years of maintenance, repair and operations (MRO) costs, Canada’s department of national defense estimates the program will cost 60 billion Canadian dollars ($42.5 billion). The final contract is expected to be signed as early as the first half of next year.

The Jang Bogo III Batch-II submarine is seen in this photo provided by Hanwha Ocean [HANWHA OCEAN]

Springboard to leap to top 10 in defense

Defeating Germany in the submarine bid battle would open the door to becoming a partner in the naval buildup projects of NATO member states. This is precisely why the Korean government envisions that, if it seizes the opportunity in this "submarine war," it can serve as a foundation for its rise to one of the top four global defense industries. Currently, Korea ranks among the top 10 in the global defense industry.

Korea and Germany previously competed for the Orka Project, which involved acquiring three submarines for the Polish Navy to modernize its fleet. In the end, Sweden emerged victorious. Reuters reported on Wednesday that the Polish government, following a cabinet meeting, selected the Swedish defense company Saab as the contractor for the new submarines.

The Orka Project aims to modernize Poland’s navy through the procurement of three submarines. Including MRO, the project is valued at $5 billion. Adding 30 years of operational costs brings the total to $13.6 billion.

Seoul engaged in what sources called a “total national effort” for the Polish project, deploying multiple agencies to support the bid. The Ministry of National Defense offered the donation of the 1,200-ton KSS-I Jang Bogo-class submarine, scheduled for decommissioning this year, to the Polish navy, according to military insiders.

Despite defeat, Korea's demonstration of its submarine-building capabilities to NATO member states through the Orka Project can be considered a significant achievement. The fact that Korea remained competitively close until the very end also serves as evidence that Korea possesses technology comparable to that of Germany, a former "submarine pioneer."

Michael Coulter, CEO of Hanwha Global Defense, left, and Phil Kurtz, Chief Legal Officer for BlackBerry, pose for a photo during a partnership signing ceremony at Canada's largest defense exhibition, Cansec, on May 30. [HANWHA OCEAN]

Germany initially helped Korea build its submarine fleet. In 1987, Korea sent over 100 engineers to Germany’s HDW shipyard for training.

Beginning with the second Jang Bogo-class submarine, Korea built eight 1,200-ton vessels based on German designs. In 2021, Korea launched its first domestically designed and built 3,000-ton submarine, the Dosan Ahn Chang-ho.

“Korea’s submarine manufacturing capability now rivals that of Germany,” said Jeong Han-gu, Hanwha Ocean’s top production supervisor and one of those who trained in Germany. “We can build and deliver faster, and our unit costs are more competitive.”

The Korean government is reportedly considering various proposals that could have a positive impact on Canada as well.

"The Korean side is proposing measures that include rapid delivery times and industrial cooperation in manufacturing, a sector where Canada is weak," said a source familiar with the situation.

The Jang Bogo III Batch-II submarine is seen during an exercise in Hawaii in May 1997 [KOREAN NAVY]

Germany in the lead, Korea rising

Industry experts note that, beyond operational requirements, strategic ties with the supplier nation will likely play a key role in final decisions.

Russia’s invasion of Ukraine and the rise of protectionist policies in the United States have reenergized global defense markets, and weapons imports increasingly signal deeper security ties.

This is why foreign media outlets believe Germany has an advantage in the bidding race, given its accumulated operational experience by supplying numerous submarines to NATO member states and its interoperability within allied operations. German submarines have already proven their interoperability in joint operations.

Meanwhile, Korea is emerging as a new security supplier, addressing NATO's vulnerabilities. If the agreement reached between the Korean and U.S. leaders on the introduction of nuclear-propelled submarines and the construction of U.S. combat ships in Korea materializes, Seoul's strategic military value will increase significantly.

“Germany may be unrivaled in some submarine segments, but in the diesel-electric space, no other country besides Korea can offer submarine-launched ballistic missiles,” said a domestic source with knowledge of the negotiations. “That’s a unique advantage Korea brings to the table.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
BY SHIM SEOK-YONG [[email protected]]