Canada's submarine decision: Beyond Hanwha's loss in 2 minutes

After a highly publicized 10-month battle, South Korean shipbuilder Hanwha Ocean has lost its bid to supply Canada with multibillion-dollar submarines to Germany’s Thyssenkrupp Marine Systems.

Canada selected TKMS as the preferred supplier for its Canadian Patrol Submarine Project on Monday, dealing a setback to Hanwha Ocean and its consortium partner HD Hyundai Heavy Industries.

But the result also showed how far South Korea’s submarine industry has advanced, as Hanwha Ocean competed head-to-head with one of Europe’s most experienced submarine makers in the final stage.

• The CPSP is Canada’s plan to acquire up to 12 diesel-electric submarines for the Royal Canadian Navy.

• The new fleet will replace Canada’s aging Victoria-class submarines scheduled to retire in the mid-to-late 2030s and is expected to operate across the Arctic, Atlantic and Pacific oceans.

• The project could be around 60 trillion won ($39.3 billion) and up to $100 billion, including long-term maintenance and support.

• It is considered Canada’s largest-ever naval procurement project.

• Sept. 2024-Feb. 2025: Canada issues a Request for Information for the CPSP.

• August 26, 2025: Canada identifies two qualified suppliers for the project: TKMS and Hanwha Ocean

• Jan. 2026: Hanwha Ocean forms a consortium with HD Hyundai to strengthen their bid

• March 2026: Hanwha Ocean and TKMS submit their formal proposals.

• April 29, 2026: Canada concludes a bid clarification and amendment process

• May 24, 2026: South Korea’s Dosan Ahn Chang-ho, a 3,000-ton KSS-III submarine built by Hanwha Ocean, arrives at Canada’s western naval base

• July 7, 2026: Canadian Prime Minister Mark Carney announces TKMS as the preferred supplier at a Royal Canadian Navy base in Halifax, Nova Scotia.

• Late 2027: The Canadian government aims to finalize and sign the definitive procurement contract.

• If talks fail: Hanwha Ocean could still get a chance to enter negotiations as the next-ranked bidder.

• Mid-2030s: Delivery of the first submarines is expected to begin.

• Based on a customized KSS-III Batch-II diesel-electric submarine, it features lithium-ion batteries and fuel-cell air-independent propulsion, aimed at extending underwater endurance.

• Hanwha pitched its proven operation by the South Korean Navy, shorter delivery timeline and cost competitiveness.

• Hanwha proposed delivering the first submarine in 2032, four years before Canada’s fleet retires in 2035, and all 12 by 2043.

• Seoul mounted an all-out campaign for what could have become Korea’s largest-ever defense export deal.

• Hanwha and HD Hyundai Heavy Industries backed the bid with an ambitious industrial package, signing MOUs and more than 80 partnerships in Canada across defense, energy, steel and batteries.

• Hanwha's overall package is estimated to generate more than 433,000 jobs and contribute more than 96.3 billion Canadian dollars ($67.7 billion) to Canada’s GDP from 2026 to 2044.

• TKMS proposed the 212CD, a new submarine based on its proven 212A platform.

• The 212CD is being jointly developed by NATO allies Germany and Norway.

• The platform, described as the "stealthiest" submarines in the world, was promoted as optimized for Arctic operations and fully NATO interoperable.

• TKMS proposed to deliver four Type212CD submarines to Canada by 2036, with the first submarine to be delivered by 2034.

• TKMS pitched a large-scale industrial package, including local partnership, with its bid expected to drive CA$160 billion in economic activity, contribute to CA$86billion to GDP and support more than 650,000 jobs.

• Both Hanwha and TKMS met Canada’s core operational and technological requirements.

• The final decision was tipped by NATO interoperability and Canada’s growing focus on collective defense with European nations.

• "The TKMS platform is optimized for Arctic waters, and it's fully NATO interoperable, allowing it to communicate seamlessly, to share intelligence and carry out joint missions," Carney said.

• TKMS also offered technology transfer, with early submarines built in Europe and later vessels produced in Canada.

• The bid gave Hanwha Ocean’s submarine technology rare global exposure

• The Dosan Ahn Chang-ho’s voyage to Canada demonstrated that Korea can build submarines capable of long-range operations.

• Hanwha also proved it could compete directly with TKMS, one of the world’s most established submarine makers.

• The company is now expected to shift its focus to other submarine and naval projects in Saudi Arabia, Greece, the Philippines, Colombia, Chile and the Middle East.