Against this backdrop, Australia\u2019s approval of Hanwha\u2019s investment has heightened concerns in Japan over whether confidential technical information and intellectual property associated with the frigate program can be adequately safeguarded. Japanese officials have questioned whether there is a risk that sensitive data related to the design and construction of the nation\u2019s latest state-of-the art vessels could be exposed to South Korea, a direct competitor in the global shipbuilding sector.<\/p>\n
![\"Surface](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/12\/Mogami-Red-Roo-Australia-1024x612.jpg\"\/)
<\/p>\n
The Royal Australian Navy will buy the first three Upgraded Mogami frigates from Japan, with eight more to be built in Australia. (Credit: Xavier Vavasseur)<\/p>\n
The decision has also highlighted the growing complexity of defense-industrial cooperation among close U.S. allies in the Indo-Pacific. Canberra has framed the approval as part of a broader effort to strengthen Australia\u2019s domestic shipbuilding capacity and deepen strategic and industrial ties with South Korea. However, the move has done little to reassure Tokyo, which remains wary of potential implications for the Japan\u2013Australia defense cooperation and the long-term management of shared defense technologies.<\/p>\n
On December 12, Australian Treasurer Jim Chalmers approved Hanwha\u2019s proposal<\/a> to increase its shareholding in Austal from 9.9% to 19.9%, following months of scrutiny by the Foreign Investment Review Board (FIRB). The move makes Hanwha Austal\u2019s largest single shareholder, edging past Tattarang Ventures, the investment arm of billionaire Andrew Forrest, which holds a 19.28% stake. Chalmers emphasized, however, that Hanwha would be barred from increasing its stake beyond 19.9%.<\/p>\n The approval comes with what the government describes as \u201ca number of strict conditions.\u201d These include limits on Hanwha\u2019s access to and storage of sensitive information, as well as stringent criteria for any Hanwha-nominated candidate to Austal\u2019s board. Chalmers said the decision followed a \u201ca thorough and robust process that took account of all the relevant economic, national security and other national interest issues,\u201d adding that the conditions were designed to protect Australia\u2019s sovereign interests in shipbuilding and defense.<\/p>\n Austal occupies a pivotal position in Australia\u2019s naval plans. In August, the company was designated a \u201cstrategic shipbuilder,\u201d effectively making it the frontrunner for major future naval construction projects. That same month, Canberra selected the upgraded Mogami-class frigate\u2014designed by MHI\u2014for the RAN\u2019s new general-purpose frigate fleet. Under the plan, Australia will invest about AU$10 billion to acquire 11 vessels, with the first three built in Japan and the remaining eight to be constructed by Austal at the Henderson shipyard south of Perth in Western Australia next decade.<\/p>\n The arrangement has sharpened unease in Tokyo. Japan and South Korea are direct competitors in the global shipbuilding market, and Japanese officials have raised concerns with Canberra over the risk of intellectual property and technology leakage should a Korean company gain significant influence over the Australian yard tasked with building Japanese-designed warships.<\/p>\n Those concerns have persisted despite assurances from Australia. Speaking at the National Press Club in Canberra on Nov. 12, Japan\u2019s ambassador to Australia, Kazuhiro Suzuki, warned that \u201cIf that decision is made, probably there will be some reaction from the Japanese government.\u201d Japanese officials worry that even a minority stake\u2014particularly if coupled with board-level access\u2014could complicate efforts to safeguard sensitive design data and manufacturing know-how associated with the upgraded Mogami-class frigates.<\/p>\n In November, The West Australian reported the Ministry of Defense in Tokyo had on at least two occasions written to the Defence Department in Canberra detailing its unease with the bid made by Hanwha.<\/p>\n Japan\u2019s defense minister Shinjiro Koizumi has declined to elaborate on reports that Tokyo had raised concerns with Canberra over Hanwha\u2019s plan to increase its stake in Austal, citing the sensitivity of bilateral discussions.<\/p>\n