K-ship engine makers surpass full-year order backlogs in just six months

South Korea's two leading marine engine makers, Hanwha Engine and HD Hyundai Marine Engine, each surpassed their full-year 2025 order backlog figures in the first half of this year alone, filings show. While the broader shipbuilding market remains split between Korean and Chinese yards, global demand for marine engines continues to flow almost entirely to Korean manufacturers.

According to each company's semiannual report filed Tuesday with the Financial Supervisory Service's DART system, Hanwha Engine's order backlog stood at 5.98 trillion won ($4.33 billion) at the end of the first half, while HD Hyundai Marine Engine's reached 1.67 trillion won.

Both companies appear to have already exceeded their full-year backlog growth from 2025 in just six months. Hanwha Engine's backlog grew by 758.5 billion won over all of 2025, but expanded by 1.84 trillion won in the first half of this year alone — more than doubling the pace. HD Hyundai Marine Engine's full-year 2025 backlog growth came to 349.9 billion won, yet the company added 581.6 billion won in the first half of this year.

Even as Chinese shipyards have captured an outsized share of new vessel orders this year, Korean engine makers continue to dominate global order flow. China has swept up 81 percent of all ship orders placed this year, largely by absorbing overflow demand that Korean yards — running at full capacity amid a prolonged shipbuilding boom — can no longer accommodate. In the engine segment, however, China still lags behind, leaving Chinese shipyards with little choice but to source their engines from Korea.

"The tanker newbuild market is booming on the back of the Middle East war, and China is expanding both its production capacity and order intake — but its engine supply capacity is growing more slowly," said Choi Gwang-sik, an analyst at Daol Investment & Securities.

Rising prices for marine equipment amid the shipbuilding boom have also lifted profitability sharply at both companies. Hanwha Engine posted operating profit of 89.3 billion won in the first half of this year, pushing its operating margin from 9.5 percent at the end of last year to 12.6 percent. HD Hyundai Marine Engine recorded 261.6 billion won in operating profit over the same period, with its margin climbing from 18.9 percent to 24.4 percent.

"Ship supply is flooding the market, so vessel prices have come down compared with last year — but engines are still in short supply and prices keep rising," an industry official said.

With both companies planning to expand production in the second half of this year, the order growth trend is expected to continue. Hanwha Engine is particularly well-positioned after completing a dedicated medium-speed engine factory earlier this month, opening the door to orders for AI data center power applications. Marine engines divide into two-stroke low-speed and four-stroke medium-speed types; the latter has recently gained traction as a power source for data centers.

HD Hyundai Marine Engine is already securing medium-speed engine orders for data centers through HD Hyundai affiliate HD Hyundai Heavy Industries. Rather than expanding its medium-speed engine production lines further, the company is instead considering scaling up its existing low-speed engine factory.