South Korea and Peru sign letter of intent to develop next-generation submarines jointly.

HD Hyundai Heavy Industries signed a letter of intent with Peru’s state shipyard SIMA to co-develop and build next-generation submarines, confirmed by Yonhap on November 3, 2025, after the November 1 signing in Ulsan. The move advances Peru’s replacement of aging Type 209 boats. It deepens a Korea-Peru industrial partnership, with a final agreement targeted this year and construction planned at HD Hyundai’s Ulsan yard.

HD Hyundai Heavy Industries said it has signed a letter of intent with Peru’s state shipyard SIMA to co-develop and build next-generation submarines for the Peruvian Navy, according to Yonhap on November 3, 2025. The LOI was signed on November 1 in Ulsan, with both sides aiming for a definitive agreement within this year and construction planned at HD Hyundai’s Ulsan yard, a move the partners describe as the first submarine co-development project for a Latin American navy.
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BAP Arica (SS-36), an Islay-class Type 209/1100, illustrates Peru’s legacy 533 mm torpedo-armed littoral and ISR submarine as the navy pivots toward an HD Hyundai co-developed SSK (Picture source: Peruvian Navy )

The LOI caps a year in which the partners already committed to a Memorandum of Agreement during Peru’s SITDEF 2025 exhibition for a 1,500-ton class design derived from HD Hyundai’s export family. Peruvian officials present the roadmap as a bridge from ongoing SIMA-led modernizations of the Angamos class to an all-new build suited for Pacific littorals, choke points, and longer endurance patrols. The MOA references an HDS 1500 baseline and places education, systems integration, and local workshare at the center of the package.

Open sources and company statements point to a mid-sized SSK around 65 meters in length with a beam near 6.5 meters, an X rudder for tighter maneuvering, integrated non-penetrating masts, and air-independent propulsion. Lithium-ion batteries are under consideration for higher dash speeds and quicker recharge cycles, a choice that improves hotel loads without constant snorkeling and widens the boat’s EMCON envelope. Peru would be the first Latin American navy to co-develop such a platform with a Korean prime, an industrial move that aims to convert years of depot-level work at SIMA into repeatable new-build competence.

Hyundai’s export line gives additional clues to the combat system architecture on offer. Earlier this year, the company secured Approvals in Principle for both its HDS 1500 and the larger HDS 2300, an indicator that the core hull modules, propulsion concepts, and safety case have matured to classification society standards. The 2,300-ton variant measures about 73 meters in length and reaches roughly 20 knots on the surface, suggesting the 1,500-ton model will prioritize endurance and acoustic discretion over volume.

The requirement in Lima is straightforward. Peru operates six German-designed Type 209s, split between the older Islay class and the 1200-ton Angamos class. SIMA’s multi-year life extension of BAP Chipana and her sisters keeps hulls in the water, but the Navy needs a modern SSK with more energy density, quieter machinery lines, and a combat management system wired for contemporary RMP and COP feeds. The HDS family maps neatly to that need, giving planners a pathway to replace while they recapitalize.

A 1,500-ton AIP-equipped boat with optional lithium-ion batteries offers long submerged stretches under EMCON, improved surge power for evasive maneuvers, and better hotel margins for passive sensors. An X tail and integrated masts reduce exposure during periscope operations while keeping the photonic suite high enough for ISR collection in sea state. With a modern WHLS and standard 533 mm interfaces, the boat carries a conventional loadout of heavyweight torpedoes and anti-ship effectors while leaving space for special forces packages or seabed systems as the Navy’s concept of operations evolves. In coastal waters, this yields a balanced A2AD tool for shadowing high-value units, sanitizing approaches, and cueing surface forces via low probability of intercept data links. In blue water patrols, higher endurance and quieter hotel loads extend the deterrent envelope far beyond the Humboldt Current’s normal patrol boxes.

Hyundai intends to cut steel at Ulsan, but the LOI points to deeper codevelopment with SIMA, including mission system integration, training pipelines, and progressive transfer of build tasks. The intent is not a kit assembly line but a stepwise approach in which Peruvian engineers gain repeatable practice in modular hull section work, piping, and QA processes. Already, Hyundai has tied its submarine offer to training agreements with Peruvian institutions, a textbook effort to turn long-term sustainment into a domestic capability rather than a foreign dependency. For a navy that has learned hard lessons keeping 209s alive, that is pragmatic as well as politically durable.

Public remarks around SITDEF and APEC frame an initial four-year window from contract to first steel, with delivery sliding into the early 2030s based on sequencing and fiscal space. That schedule assumes steady appropriations, predictable FX, and the absence of off-ramp temptations from European houses that have sold into the region for decades. On the Korean side, Hyundai’s broader reorganization of its Ulsan shipyards aims to clear room for defense runs and shorten yard learning curves, a corporate signal that export SSKs are not a sideshow.

The LOI widens Asia-Latin America defense linkages and adds a new competitor to European incumbents in the southern Pacific. A Peruvian Korean submarine built on a codevelopment model would mark a shift in technology flows and influence, giving Lima a second supplier for underwater warfare at a time when Andean states weigh maritime security, EEZ enforcement, and gray zone encounters with growing Chinese and extra-regional fishing presence. Should the program hold its course, other regional navies that still rely on 209 derivatives will take notice, and the next round of bids in the hemisphere will not be a two-horse race.

Written By Erwan Halna du Fretay - Defense Analyst, Army Recognition Group

Erwan Halna du Fretay is a graduate of a Master’s degree in International Relations and has experience in the study of conflicts and global arms transfers. His research interests lie in security and strategic studies, particularly the dynamics of the defense industry, the evolution of military technologies, and the strategic transformation of armed forces.