Japanese defense industry stakeholders are increasingly cautious about the U.S. Navy frigate deal, citing heavy prospective investment in U.S. yards and intense domestic shipbuilding obligations.
On September 1, reports indicated the U.S. Navy is evaluating frigate options from Japan, South Korea, and Türkiye. In Japan, the idea has not sparked broad optimism.
The opening to consider foreign-built frigates follows an August White House memorandum that invoked a national-security exemption to allow foreign designs into U.S. Navy service. The directive generally ties foreign participation to direct investment in American facilities or equity stakes in U.S. shipyards, pointing to deep industrial linkages if the plan moves ahead.
Options reportedly include South Korea’s Chungnam-class guided-missile frigate, Türkiye’s Istanbul-class, and Japan’s Mogami-class-based multipurpose frigate from Mitsubishi Heavy Industries (MHI).
Given limits of the in-service Mogami class, attention has centered on an upgraded variant, often called the New FFM, with greater displacement and more robust combat systems for blue-water operations. This is the same design selected by the Royal Australian Navy.
Some observers hope the Japanese FFM could prevail, noting alliance ties and Japan’s progress on its first major warship export with Australia. The upgraded FFM is viewed as better aligned with open-ocean missions and benefits from Japan’s reputation for schedule discipline. Even so, those expectations are tempered by major reservations about a sale to the United States.
The U.S. Navy frigate deal and the “Finland model”
A chief concern is the reported plan to follow a “Finland model.” Under this approach, the first two hulls would be built abroad, then foreign partners would invest to expand and modernize U.S. shipbuilding infrastructure for subsequent construction in the United States.
The concept mirrors the U.S. Coast Guard’s Arctic Security Cutter approach, in which an initial hull is produced at a Finnish yard based on a Canadian design before production shifts to an American shipyard.
For Japanese firms, this structure raises several issues. Only the initial two ships, or a small batch, would likely be built in Japan, limiting direct economic gains. There is also unease that specifications could change once production moves stateside.
The biggest worry is the scale of capital required for U.S. yard upgrades. The current administration has prioritized reviving American shipbuilding, and meeting Navy demand while rebuilding industrial capacity helps explain interest in the model.
Structural constraints in the U.S. industrial base
Industry challenges in the United States extend beyond the number of active shipyards and reflect long-term erosion of industrial depth.
After the Cold War, shrinking naval demand and a weaker commercial sector forced closures and consolidation, concentrating major warship construction in a few yards.
This has removed surplus capacity, making rapid output increases difficult even as the Navy seeks to grow the fleet.
A more acute problem is the shortage of skilled labor.
Workforce numbers have trended down for years. Hiring and retention are hindered by wages, housing, and working conditions while experienced workers retire, leaving a less seasoned labor pool.
Maintaining productivity and quality has become more challenging.
Yard infrastructure is also aging. Constrained sites and outdated facilities complicate adoption of modular construction and automation. Volatile demand has discouraged major capital spending.
Supply chains remain brittle. Many component makers exited naval programs in the post–Cold War era, creating single-source dependencies for critical parts.
The result affects costs and schedules in peacetime and constrains surge capacity in wartime.
While industries in Japan and South Korea have advanced digitalization, automation, robotics, and modern production management, U.S. naval shipbuilding has moved more slowly on these fronts.
In short, the obstacles are structural, combining consolidation, labor shortages, aging facilities, fragile suppliers, and slower modernization. A detailed assessment published in December 2025 by the Center for Strategic and International Studies examined these issues. Addressing them will likely require foreign capital, facility upgrades, and the infusion of advanced production methods in U.S. yards.
Domestic pipeline pressures for Mitsubishi Heavy Industries
For MHI, the potential program poses a dilemma.
Winning the competition would likely entail sizable financial commitments and personnel to help reinvigorate U.S. shipbuilding, a significant burden for the company.
MHI is also already committed to a sustained build program for the Japan Maritime Self-Defense Force.
Following the Aegis System Equipped Vessels now under construction, the company faces the upgraded FFM line, new replenishment ships, and a possible new class of Aegis-equipped destroyers.
In parallel, MHI must support the Australian FFM export and construction effort.
These overlapping obligations leave little spare capacity for extensive support to the United States.
Consequently, stakeholders in Japan are cautious, even reluctant, about joining the U.S. frigate program. While a Japanese-built frigate in U.S. Navy service would be symbolically significant for the alliance, the industrial realities are far more complex.
For Japan, the question is not only whether its frigate can win a U.S. Navy competition. It is whether industry can allocate the capital, workforce, technology, and management bandwidth needed to help rebuild part of the U.S. naval shipbuilding base while meeting rising domestic and Australian requirements. That calculus may matter more than the FFM’s technical strengths.