US Navy Eyes Korea’s 'Chungnam-class' Frigate... The Real Reason a 100-Year Taboo Was Broken

Breaking a 100-year-old taboo that required U.S. warships to be built exclusively on American soil, the U.S. Navy has officially begun reviewing the adoption of Korea's state-of-the-art 'Chungnam-class' frigate. This is a radical decision to leverage the design and construction technologies of an ally to counter China's aggressive expansion of its naval power. In the midst of this historic turning point for U.S. security policy and a multi-trillion won opportunity for the Korean shipbuilding industry, we trace the inside story of why the U.S. Navy set its sights on the Chungnam-class.

America’s Choice to Break a 100-Year Taboo: What is the 'Finnish Model'?

"The U.S. Navy building warships in Korean shipyards?" A scenario unimaginable just a short while ago has entered the realm of reality. According to reports from the U.S. military publication USNI News, the U.S. Navy has placed Korea's Chungnam-class, the export version of Japan's Mogami-class frigate, and Turkey's Istanbul-class frigate on its shortlist and ordered a formal design evaluation. America is finally breaking its 100-year-old fundamental security principle to join hands with its allies.

For a long time, the U.S. has adhered to the 'Burns-Tollefson Act,' which mandated that all U.S. warships be built on American soil by American shipyards. However, while China has been churning out warships at a frightening pace, U.S. shipbuilding capacity has steadily declined, leading to severe supply bottlenecks. The 'Finnish Model' is the card the U.S. government has pulled out to quickly close this gap.

The Finnish Model is a groundbreaking workaround that allows overseas shipbuilders who have made proactive investments in U.S. shipbuilding infrastructure to construct the first two ships in their own country. The condition is that subsequent technology and processes must then be transferred to U.S. shipyards for follow-on production. This historic project gained momentum after U.S. President Donald Trump signed a national security memorandum on August 13, 2026, officially approving exceptions to the law.

The U.S. Navy is moving fast. Acting Secretary of the Navy Hung Cao has officially directed Assistant Secretary William Mahan, who is in charge of ship evaluation, to complete a comprehensive assessment of the candidate vessels by November 12, 2026. As America breaks its 100-year taboo, the global defense industry is holding its breath to see which design—Korea’s, Japan’s, or Turkey’s—the U.S. Navy will ultimately select.

The Overwhelming Performance of the 'Chungnam-class' That Caught the U.S. Navy’s Eye

The reason the U.S. Navy is showing such deep interest in Korea's Chungnam-class among the many combat ships of its allies is clear. It is the optimal multi-purpose combatant, possessing outstanding performance, price competitiveness, and even rapid construction speed. Built as the lead ship of the Ulsan-class Batch-III program, the Chungnam-class boasts specifications in a league of its own compared to existing frigates.

The most powerful weapon of the Chungnam-class is its 'Integrated Sensor Mast,' the ship's brain and symbol. It is equipped with a four-sided fixed multi-function phased array radar developed with domestic technology, which operates similarly to the radar on the U.S. Navy's main Aegis destroyers. Unlike older frigates that use rotating radars and suffer from detection blind spots, the Chungnam-class monitors a 360-degree perimeter in real-time through its four fixed radar panels. This allows it to simultaneously detect, track, and respond to numerous air and sea targets, effectively acting as a mini-Aegis ship.

Its anti-submarine warfare (ASW) capability to hunt enemies hiding underwater is also top-tier. The Chungnam-class adopts a hybrid propulsion system combining a gas turbine and electric motors. When tracking enemy submarines stealthily, it operates quietly on electric motors with almost no noise, minimizing underwater acoustic signature. Combined with high-performance sonar and long-range anti-submarine torpedoes, it has all the conditions to be the toughest natural predator for any enemy submarine.

The real key to the U.S. Navy's attraction is the overwhelming construction capability of the Korean shipbuilding industry, which delivers these high-performance 3,600-ton combatants within the promised timeline without a single margin of error. Currently, the U.S. shipbuilding industry suffers from chronic delivery delays and cost overruns, sparking serious concerns about a power vacuum. This is why the Chungnam-class, having proven both its cost-effectiveness and reliability, has emerged as a powerful candidate to scratch the U.S. Navy's itch.

Hanwha Ocean vs. HD Hyundai Heavy Industries: The Mixed Fortunes of the Domestic Shipbuilding Industry

The U.S. Navy's project has brought a fierce whirlpool into the competitive landscape between Korea's two defense giants, Hanwha Ocean and HD Hyundai Heavy Industries. While it appears to be a favorable development for the entire Korean shipbuilding industry at a glance, a closer look at the fine print reveals that the two companies have subtly different expressions.

The core lies in the radical conditions set by the U.S. government. According to the national security memorandum signed by U.S. President Donald Trump on August 13, 2026, any foreign company seeking an exception to the Burns-Tollefson Act—which prohibits the overseas construction of U.S. warships—must meet stringent criteria. Specifically, they must have acquired stakes in U.S.-based shipyards to secure management control or have invested by building local production facilities. The plan is to apply the so-called 'Finnish Model' to companies that meet these conditions, allowing them to build two ships in U.S. shipyards first before transferring the technology.

Hanwha Ocean was the first to smile in this regard. Hanwha Ocean has pre-emptively acquired a stake in the Philly Shipyard, located in Philadelphia, securing management control. Having already cleared the difficult entry barrier of owning a local U.S. production base, it is interpreted that the company has secured a significantly advantageous position in the evaluation process.

On the other hand, HD Hyundai Heavy Industries, which led the design and the first ship construction of the Chungnam-class, is in a tight spot despite its superior technical skills. Although it possesses unparalleled design capabilities, it lacks its own production base within the U.S. for now. HD Hyundai Heavy Industries now faces the urgent task of finding a breakthrough, such as swiftly establishing a partnership with a local U.S. shipyard or acquiring a stake. With the U.S. Navy ordering a comprehensive evaluation of candidate ships by November 12, 2026, the global survival strategy and power struggle between the two companies are expected to intensify.

Remaining Challenges and Variables to Watch

While a monumental opportunity for the first-ever export of Korean warships to the U.S. has opened up, the mountains to climb before a final contract remain high. The biggest barrier is the pushback from within U.S. political circles. Although the White House signed the national security memorandum to allow for exceptions to the Burns-Tollefson Act, there is a movement within the U.S. Congress to revoke the President's authority to grant such exceptions for foreign warship construction. With legislative efforts underway, including attempts to include a provision for stripping this power in the fiscal year 2027 National Defense Authorization Act, it is difficult to predict how the situation will unfold.

Furthermore, not only Korea but other formidable competitors, such as the export version of Japan’s Mogami-class frigate and Turkey’s Istanbul-class frigate, are forming a competitive field to be chosen by the U.S. Navy. The U.S. Navy plans to carefully weigh the design capabilities, price competitiveness, and construction speed of its allies to identify the partner that can deliver warships most efficiently.

The first watershed moment arrives this autumn. Acting Secretary of the Navy Hung Cao has directed Assistant Secretary of the Navy for Research, Development, and Acquisition William Mahan to complete a comprehensive design evaluation for surface combatants, transport ships, and supply ships by November 12, 2026. The results of this evaluation will be the first test bed for the project to rebuild the U.S. fleet via the 'Finnish Model.' It is time to watch the decision in the coming November to see if Korea's defense industry can unlock the gates of the U.S. shipbuilding industry, which have been closed for over 100 years, and sail out into the open ocean.

Related Links