Hanwha Defense USA, the US subsidiary of Hanwha Aerospace, has secured a $269 million deal to construct a medium landing ship, or LSM, for the US Navy and Marine Corps at its Philly shipyard, marking a major step in the South Korean defense group's push into the American naval shipbuilding market.

The company said Friday it was selected by US maritime services company Tote Services to build one LSM, with options for three additional vessels.

The deal marks Hanwha Group’s first order to build a new US Navy vessel since acquiring Philly Shipyard in Pennsylvania in 2024.

The contract was awarded through Tote Services, which was selected by the US Navy in July under a $2.2 billion vessel construction manager program. Under the arrangement, the Navy delegates shipyard selection and construction oversight to a specialized company rather than contracting directly with individual shipbuilders. Tote Services is responsible for managing the construction of up to eight landing ships under its initial contract.

Construction of the vessel is scheduled to begin in the fourth quarter of 2027, with the first vessel expected to be delivered in 2030, according to Tote Services.

Tote Services said it selected Hanwha Defense USA through a competitive bidding process launched in July, citing its competitive pricing and acceptance of contract terms.

The LSM program supports the US Navy's push to strengthen its ability to conduct distributed operations in contested littoral areas, particularly across the Indo-Pacific. The vessels are designed to move Marine Corps personnel, equipment and supplies to coastal locations.

The ships will measure approximately 100 meters in length and 16 meters in width, with a light displacement of about 2,687 tons and a range of roughly 7,400 kilometers.

Tote Services and Hanwha have an established strong relationship, having collaborated on the construction and delivery of four National Security Multi-Mission Vessels for the US Maritime Administration.

"Since acquiring Philly Shipyard in 2024, Hanwha has made significant investments in its workforce and technology to pave the way to build ships for the US Navy and other federal customers," Michael Coulter, president and CEO of Hanwha Defense USA, said.

The deal comes as Seoul and Washington pursue closer shipbuilding cooperation under the “Make America Shipbuilding Great Again” initiative aimed at revitalizing the US shipbuilding industry and strengthening its naval construction capabilities.

It also comes as Hanwha Defense USA plans to acquire the 60 percent stake in Philly Shipyard held by Hanwha Systems, a move intended to consolidate its role in the group’s US naval shipbuilding business.

“Pennsylvania is leading the way as we rebuild American shipbuilding, bringing jobs, manufacturing and opportunity back to our state," US Senator Dave McCormick said. "Hanwha’s continued commitment to Philadelphia shows what is possible when we invest in American workers and American industry.”

The US Navy plans to acquire a total of 35 LSMs. Hanwha is expected to use the contract as a stepping stone toward further orders, while it keeps investing in its workforce, technology and shipyard infrastructure.

By Ahn Sung-mi (sahn@heraldcorp.com)