SIMA Peru and HD HHI Sign Submarine Design Agreement for U209PN Replacement

Milivox analysis: Peru has taken a significant step toward modernizing its undersea warfare capabilities by signing a Letter of Intent (LoI) with South Korea’s HD Hyundai Heavy Industries (HD HHI) for the joint design of a new-generation submarine. This marks a potential turning point in Latin America’s naval industrial base and could reshape regional undersea balances.

Background

The Peruvian Navy currently operates four Type 209/1200 submarines—locally designated as U209PN—procured from Germany between 1974 and 1983. These diesel-electric submarines have undergone various upgrades but are nearing obsolescence in terms of acoustic signature management, combat systems integration, and endurance.

In an effort to replace this aging fleet, Peru’s state-owned shipbuilder Servicios Industriales de la Marina (SIMA) has signed an LoI with South Korea’s HD Hyundai Heavy Industries during the SITDEF 2025 defense expo in Lima. The agreement outlines cooperation on designing a new submarine tailored to Peruvian requirements, with construction expected to take place at SIMA’s Callao shipyard.

This follows years of deliberation by the Peruvian Ministry of Defense over whether to pursue foreign acquisition or indigenous development. The LoI suggests Lima is opting for technology transfer and local build-up—mirroring approaches taken by Brazil and Colombia in their respective naval programs.

Technical Overview

While detailed specifications have not yet been disclosed publicly, industry sources suggest that the future Peruvian submarine will be based on HD HHI’s latest export-oriented diesel-electric platforms—potentially derived from the KSS-III or KSS-II lineage but scaled down for regional needs.

Displacement: Estimated between 1,800–2,200 tonnes submerged
Propulsion: Diesel-electric with optional Air-Independent Propulsion (AIP)
Sensors: Modern sonar suite likely incorporating flank arrays and low-probability-of-intercept sensors
Combat System: Open architecture C2 system compatible with Western torpedoes (e.g., DM2A4 or Black Shark)
Crew: Approx. 30–40 personnel
Missions: ASW/ASuW patrols, ISR roles, special forces delivery

The platform is expected to integrate advanced acoustic quieting technologies and possibly lithium-ion battery modules—a domain where South Korea has made significant progress through its DSME-powered KSS-III program.

Operational or Strategic Context

The Pacific-facing navies of Latin America are entering a phase of submarine renewal. Chile has already upgraded its Scorpène-class boats; Brazil is building nuclear-powered submarines under its PROSUB program; Colombia is evaluating replacements for its Type-209s. In this context, Peru’s move is both reactive and strategic.

The Peruvian Navy sees undersea deterrence as vital to securing maritime sovereignty over vast Exclusive Economic Zones (EEZ), particularly given ongoing disputes over fishing rights and illicit trafficking routes along the Pacific corridor. As assessed by Milivox experts, indigenous submarine production also serves as a hedge against future geopolitical constraints on arms imports.

This partnership also reflects Seoul’s growing role as an alternative supplier in global naval markets—offering competitive pricing bundled with industrial collaboration packages that appeal to middle-tier powers like Peru.

Market or Industry Impact

SIMA stands to gain significantly from this cooperation—not only through technology transfer but also via workforce upskilling in modular construction techniques and systems integration. If executed successfully, it could position SIMA as a regional hub for submarine maintenance or even exports within select Latin American markets.

This deal further cements HD HHI’s ambitions beyond Asia-Pacific. The company has already delivered warships to the Philippines and is competing in European tenders such as Poland’s Orka program. A successful Peruvian project would validate its ability to deliver complex platforms via co-development pathways—a model increasingly favored over traditional FMS-style sales.

Milivox Commentary

This LoI represents more than just a procurement milestone—it signals Peru’s intent to elevate itself into a higher tier of maritime autonomy. However, challenges remain: budgetary continuity across political cycles; ensuring timely technology absorption at SIMA; and balancing operational readiness during transition phases from legacy boats.

If realized within projected timelines—likely early-to-mid-2030s—the new platform would significantly enhance Peru’s ability to conduct persistent surveillance across chokepoints like the Guayaquil Gap or Galápagos approaches. It may also enable greater interoperability with U.S., Chilean, or Colombian forces during multilateral exercises such as UNITAS or RIMPAC.

According to Milivox analysis, this agreement should be watched closely not only for its impact on regional naval balances but also as a test case for emerging defense-industrial partnerships between Global South nations and East Asian OEMs seeking non-traditional markets through co-production strategies.