China Shipbuilding Industry Group (CSSC), China's largest shipbuilder, poured 1.3 trillion won ($861 million) into research and development last year as it accelerates the buildout of smart shipyards. South Korea's three major shipbuilders, by contrast, collectively spent the equivalent of just 0.7 percent of their combined sales on R&D.
According to CSSC Holdings' annual report filed with the Shanghai Stock Exchange, the company invested 5.91 billion yuan — about 1.3 trillion won — in R&D last year, equal to roughly 4 percent of its sales of 151.98 billion yuan.
CSSC Holdings was formed when China State Shipbuilding Corp., formerly China's No. 1 shipbuilder, absorbed China Shipbuilding Industry Corp. and listed on the Shanghai Stock Exchange. With total assets of around 400 billion yuan, it is by far the world's largest shipbuilder.
In terms of sales, CSSC Holdings is roughly comparable to South Korea's three leading shipbuilders — HD Korea Shipbuilding & Offshore Engineering, Samsung Heavy Industries and Hanwha Ocean. CSSC Holdings posted sales of about 33 trillion won last year, while the Korean trio combined for about 53 trillion won.
Their R&D spending, however, tells a starkly different story. The three Korean shipbuilders invested 226.5 billion won at HD Korea Shipbuilding & Offshore Engineering, 73.8 billion won at Hanwha Ocean and 100.9 billion won at Samsung Heavy Industries — a combined 401.2 billion won. That amounts to 0.7 percent of their combined sales. Even accounting for the difference in revenue scale, the gap in R&D intensity is nearly sixfold.
The core of CSSC Holdings' R&D push is smart-shipyard development. Subsidiary-level disclosures show planned investments that include upgrading a digital-twin shipyard at Waigaoqiao Shipbuilding, introducing smart production lines at North Shipbuilding, establishing a smart-equipment research center for ship manufacturing at CSSC Tianjin, and building smart production lines at Dalian Shipbuilding.
Some investments have already borne fruit. Wuchang Shipbuilding completed a digital production line and was designated an "excellent-grade smart factory" by the Chinese government — a classification reserved for facilities that go beyond basic automation to actively deploy AI technology.
Waigaoqiao Shipbuilding is building a data platform and a digital-twin shipyard aimed at making every decision — from logistics management to vessel construction — AI-driven. CSSC Holdings said in its report that construction efficiency for large cruise ships had improved 20 percent compared with the first vessel built, and that the company had delivered seven ships beyond its annual delivery target.
"With both Korea and China sitting on years' worth of order backlogs, it would be devastating for Korea if China were to shorten delivery schedules on top of its existing price advantage," an industry official said.
South Korean shipyards, meanwhile, are still in the early stages of smart-factory development. Collaborative robots have been deployed widely for basic assembly tasks, but full digitalization remains out of reach — largely because unions are pushing back hard against AI adoption over fears of job losses. Most yards are struggling even to install the equipment needed to build AI systems.
Hanwha Ocean, for example, has been trying since 2024 to introduce a smart safety system that includes a CCTV-based integrated control center, but the effort has been stalled for three years by union opposition over privacy concerns.
Shipbuilders only began putting AI adoption on the agenda in wage and collective bargaining talks this year. HD Hyundai Heavy Industries recently started discussions within a labor-management joint consultative body — launched earlier this year — on a commitment not to use video equipment for surveillance or control purposes.
"Outside of HD Hyundai Heavy Industries, there are no concrete AI-related discussions under way at all," an industry official said. "Compared with China, which has already made smart shipyards a reality, Korea is expected to spend years just on labor-management consultations — and the technology gap will widen significantly as a result."
klee@heraldcorp.com
