Insights

K-Shipbuilding is knocking on the door of a new strategic industry. According to Samjong KPMG Economic Research Institute's Business Focus, at the Korea-US summit in Gyeongju in October 2025, US President Donald Trump approved nuclear-powered submarine construction at the request of President Lee Jae-myung, and related detailed procedures are underway. Today, only six countries globally — the US, Russia, China, France, the UK, and India — operate nuclear-powered submarines, with Korea's entry now being discussed.

The strategic value of a nuclear-powered submarine. Nuclear-powered submarines hold decisive advantages over conventional diesel submarines in submerged depth (95–140 m), duration of continuous submersion (2–3 months or more), and top speed (25–30 knots). The ability to conduct long-duration operations without battery replacement is core to strategic nuclear deterrence. Construction and operations are limited to six countries — the US, Russia, China, France, the UK, and India — meaning that as a “strategic shipbuilding” capability, this represents an expansion of a national strategic industry cluster.

Prerequisites and industrial ripple effects. Building nuclear-powered submarines requires dedicated shipbuilding infrastructure and a supplier-dominant market structure that is likely to be sustained over the short term. Over the medium-to-long term, a response strategy is needed for shifts in Middle East data-center demand and rising military semiconductor demand. The participation of Hyundai Motor Group as a mobility-sector company is also notable.

What this means for M&A. K-Shipbuilding's entry into the nuclear-powered submarine market is likely to trigger M&A opportunities across the broader defense and shipbuilding ecosystem. First, technology partnerships or acquisitions with companies holding radiation-control and nuclear-safety capabilities will be a shortcut to securing core capabilities. Second, the strategic value of suppliers in nuclear-powered specialty materials (high-strength steel plate, specialty welding), acoustic sensors, and propulsion systems will rise sharply, lifting demand for vertical-integration M&A. Third, cross-border M&A targeting US and Canadian defense and MRO companies is likely to accelerate to expand participation in North American alliance naval-defense supply chains.

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Full report: Samjong KPMG Economic Research Institute, Business Focus (April 2026)

Contact: Samjong KPMG M&A Center