South Korea’s $37M Defense Project Aims to Support U.S. Navy Supply Chains

Busan has secured a critical element of its plan to make ship maintenance, repair and overhaul (MRO) a core future industry for the city and region.On May 18, city officials announced Busan was selected for the Defense Acquisition Program Administration’s (DAPA) “Defense Innovation Cluster: Ship MRO” project. The five‑year program, running through 2030, brings a total investment of 49 billion KRW (approximately $36.8 million): 24.5 billion KRW (approximately $18.4 million) in national funding, 5 billion KRW (approximately $3.8 million) from the city and 19.5 billion KRW (approximately $14.6 million) from other local governments. Busan will implement the program jointly with Ulsan, South Gyeongsang Province and South Jeolla Province.The award builds on an earlier win in April, when Busan was chosen for the Ministry of Trade, Industry and Energy’s “Support Program to Strengthen Global Competitiveness of Small‑and‑Midshipyard Ship MRO.” Whereas the ministry’s effort emphasized company-level support and workforce development, DAPA’s project targets infrastructure and R&D. Together, the two programs create an end‑to‑end growth framework for ship MRO in Busan—covering production, technology, certification and talent development.Under the DAPA project, Busan will establish a “Naval MRO Defense Quality Certification Center” in Gangseo District. The center will function as the regional hub for reliability testing and quality certification of critical ship components. Built on that foundation, the city plans projects including development of AI‑driven PAUT (phased‑array ultrasonic testing) inspection robots, domestic replacement of innovative and obsolete parts, and consulting for U.S. Navy ship maintenance qualifications (MSRA) and U.S. ship cybersecurity certification (CMMC).Local repair yards and equipment suppliers concentrated in Yeongdo and Saha districts are expected to be direct beneficiaries. City planners said the project design reflects on‑site demand from repair yards and ship‑parts firms in those areas, including HJ Heavy Industries.The timing aligns with U.S. efforts to rebuild its shipbuilding and maritime supply chains in response to China’s maritime expansion. As cooperation between Korean shipbuilders and U.S. programs expands, Busan could emerge as a strategic hub in trans‑Pacific defense supply chains. City officials expect the project to complement the U.S.‑oriented “MASGA (Make American Shipbuilding Great Again)” initiative.Busan will move into full implementation in the second half of the year. Officials plan to complete preliminary steps such as the local fiscal‑impact assessment in May, form the project team and sign agreements with implementing agencies in July. The Defense Technology Promotion Research Institute will select the executing organization through a separate competition.The city is also pursuing the next‑generation defense innovation cluster. Busan has applied for the Defense Technology Promotion Research Institute and DAPA’s 2026 “Defense Innovation Cluster – Advanced Defense Strategic Industry” program, aiming to build an AI‑based maritime defense AX (AI Transformation) ecosystem leveraging the Naval Operations Command, marine research infrastructure and the local concentration of defense firms.Acting Mayor Kim Kyung‑deok said the DAPA selection reflects sustained city efforts and urgent industry demand. “On the strength of local shipbuilders, including HJ Heavy Industries, we will maximize synergies between the ministry and DAPA programs to secure U.S. defense export supply chains and develop ship MRO into Busan’s next advanced core industry,” he said.