| Introduction

Since its signing, AUKUS has been heralded for deepening cooperation between Australia, the US and the UK. Helping to align Canberra's Indo-Pacific strategy with Washington, secure Australia against future geopolitical threats, create opportunities for the defense industrial base in the US, UK and Australia, while also facilitating advanced technology transfers between the Australia and the US and UK.

Given South Korea's nuclear-powered submarine (SSN) acquisition program, it makes sense to track what is a highly ambitious and troubled nuclear submarine project also involving the United States. Whereas the Australians will co-develop and co-produce the nuclear submarine hulls and some subsystems, as well as develop safety, operations and maintenance expertise, the reactor cores will run on HEU and be built in the United Kingdom and delivered in a sealed form to be compliant with IAEA safeguards governing access of non-nuclear weapons states under the NPT to Highly Enriched Uranium (HEU). South Korea plans to develop its own SSN capability and merely rely on the US for fuel, specifically Low Enriched Uranium (LEU).

While technology will be provided by the US side, the actual design and construction will be done in the UK and Australia. The UK submarine industrial base (SID) is unable to ensure its Astute-class SSNs remain at sea and is also currently focused on the design and construction of its ballistic missile submarine (SSBN), likely to delay the eventual arrival of SSN AUKUS. Australia itself lacks the native design and construction capacity to go it alone, so it has little choice but hope the promised improvements to the UK SID will materialize.

Another significant component of AUKUS is the transfer of 3~5 US Virginia class SSNs to Australia. With it being announced in early June that instead of receiving 3 new SSNs from the US, Australia would receive 3 already in-service boats. While this caused some disquiet in some quarters, it does not violate the spirit or text of the AUKUS framework agreements. This actually makes much sense given the problems with the US defense industrial base, with the construction and maintenance backlog for US Virginia class nuclear-powered submarines pointing to fundamental issues with infrastructural capacity, labor force planning and management, and spare part supply chains.

These problems make the need for greater cooperation between US allies, both inside and outside AUKUS, all the clearer. Engagement can take a variety of pathways, a panoply of options are available that could improve economic security for all countries, improve US and UK naval force readiness, and ensure that AUKUS delivers. From MRO to spare part manufacture, there are numerous opportunities that could enable closer cooperation between South Korea and the AUKUS countries.

As South Korea's SSN capability takes shape, there will be room for greater market integration. AUKUS is a closed shop, but there are potentially ways that South Korea may be integrated into certain aspects of the program to the mutual benefit of both sides. These benefits will become clearer as South Korea pursues the design and construction of SSNs, but as of now, South Korea can invest in US uranium enrichment capacity to support the fueling of its own submarines and indirectly ensure that AUKUS submarines are also fueled. Going forward, as South Korea develops its own capabilities or even potentially before, it could become more involved in the provisioning of parts for the US, UK and Australian submarine industrial base. In the short run, South Korea could expand its MRO arrangements that it is already cultivating with the US to include the UK and Australia, probably beginning with less sensitive surface naval ships. In the longer run, as technical cooperation hopefully deepens with the US side, submarine-related MRO may also become possible.

These are prospects that should be planned for, and that should form part of US-ROK discussions going forward. However, the immediate issue of fuel also has some clear potential answers: South Korean investment in US-based enrichment facilities, either government-run or else run by emerging new would-be commercial fuel producers.

| AUKUS and its Problems

Defense Sector Investment

AUKUS is a multipronged defense procurement program that spans the US, UK and Australian defense industries. It involves the transfer of existing US Virginia-class submarines to Australia, as well as the provision of nuclear reactor technology from the US to the UK and from the UK to Australia. Australia will be involved in the fabrication of some components for the US Virginia-class program and the future AUKUS SSN, receive training and technical assistance with submarine operations, and support with developing the capabilities necessary to supply maintenance and sustainment operations (MRO).

There is also a grander strategic component to the program involving the regular deployment of US and UK SSNs to Submarine Rotational Force-West (SRF-West) starting 2027. This has been preceded by the Australian side doing significant maintenance work on the USS Vermont (Virginia class) at HMAS Stirling in Western Australia (which will host SRF-West). The Vermont has also included 13 Royal Australian Naval personnel in its crew of 134, who are there to be trained for future operations on Australia's own Virginia class boats when it receives them in the 2030s.¹⁾ The Australian government has also been making substantial investments of up to $8 billion (AUD) in their port facilities at Stirling including in training, shore power, emergency preparedness, and "operational berths for nuclear-powered submarines".²⁾

Further, Australia is making significant investment in an industrial uplift to provide the basis for the Maintenance, Repair, and Operations (MRO) of its future submarine programs. These total $30 billion (AUD),³⁾ and the major focus has been on specific groups of parts some of which that the Congressional Research Service (CRS) has highlighted as being key weaknesses in the US Virginia class's overall supply chain. Namely valves, pumps, pipes, fittings, and fans, as well as electrical components, forgings, and structural fabrication.⁴⁾

This comes on top of Australia's $3 billion (USD) commitment to the US submarine industrial complex in the form of $2 billion between 2024 and 2025, and then $100 million per year thereafter.⁵⁾ This comes alongside US commitments to invest $17.5 billion in the submarine industrial base and the UK government's £4 billion pledge for SSN-AUKUS and £3 billion on submarine industrial infrastructure commitments made in 2024.⁶⁾

These industrial base investments and MRO arrangements are supposed to support Australia's own integration and sustainment of its future US Virginia class fleet, and also allow for the US (and UK) to project force more effectively in the Western Pacific. They will also form part of future AUKUS SSN production and sustainment operations.

Defense Sector Integration

Another important component of AUKUS is agreements that facilitate classified information sharing necessary for the construction, operation and maintenance of nuclear submarines. This builds upon existing arrangements the UK has that extend back to the 1958 US-UK Mutual Defence Agreement (MDA) that allowed the United States to transfer a submarine nuclear reactor, information, components and related technology for submarine reactors. The MDA has been renewed repeatedly since and has been extended to Australia under the AUKUS framework agreements.⁷⁾

Prior to AUKUS, Australian integration into the US defense procurement market has proceeded since the 1990s, under which they (as well as Canada and New Zealand) are designated as part of the US National Technology and Industrial Base (NTIB). This provides some statutory benefits including restrictions to the NTIB of procurement of conventional ammunition in cases of national emergency,⁸⁾ and for naval vessels: gyrocompasses, electronic navigation chart systems, steering controls, propulsion and machinery control systems, totally enclosed lifeboats, welded shipboard anchor and mooring chain.⁹⁾

Nonetheless, while the NTIB sounds impressive as a concept, it has struggled to create an actually integrated defense procurement market between the countries involved. Indeed, the problems with the NTIB as an integration mechanism led to the conclusion of the Defense Trade Cooperation Treaties (DTCT) with the UK and Australia in 2007 (they entered into force in 2013). However, both the NTIB and the DTCT have been considered a failure insofar as integration between the three defense sectors has been sluggish.¹⁰⁾

AUKUS arrangements, including substantial exemptions to US International Traffic in Arms Regulations (ITAR), are designed to improve defense industrial cooperation and integration. The NTIB and the DTCT framework has been supplemented by the creation of an Authorised User Community (AUC) that allow for the re-export and re-transfer of some defense articles between the AUKUS countries exempt of ITAR. The so-called ITAR taint is a serious issue for international munitions firms seeking to work in the US market because any technology developed overseas and brought to the US for further design and manufacture then becomes subject to ITAR restrictions on re-export.¹¹⁾

The decades of experience that the UK and US have makes further deepening such cooperation and supporting Australia far easier. The three countries are also part of the Five Eyes intelligence alliance that makes further developing secure information sharing channels in another context, defense acquisition, easier. Institutional and organizational patterns from pre-existing multilateral intelligence ties can be imaginatively applied to AUKUS.

| Risks, Bottlenecks and Potential Crisis

Aside from regulatory issues with ITAR, currently there are serious doubts about the UK's capacity to deliver submarines on time given severe capacity constraints. One depressing but revealing illustration of the problems that the UK has with MRO is the fact that none of the UK's world-class Astute SSNs are at sea with all currently undergoing or awaiting maintenance, or else are under construction.¹²⁾ The problem is somewhat less advanced in the US case, but as of 2024, some 34% of US SSNs were out of action (undergoing maintenance or awaiting maintenance).¹³⁾

Another is the extent of equipment cannibalization in both the UK and US for their submarine programs. Both have suffered from severe supply chain shortages of vital spare parts, including the US case many of the parts that Australia is investing in the production of as part of its uplift policy.¹⁴⁾ While the last reports of cannibalization in the UK are from 2017,¹⁵⁾ the British National Audit Office (NAO) continues to rate core production capabilities within the submarine industrial base at red as of December 2025 (which means "successful delivery of the project appears to be unachievable").¹⁶⁾

In the UK's case, the NAO has stopped releasing its assessments on the country's next generation nuclear ballistic missile submarine (SSBN), the Dreadnought class, but previous assessments have not been optimistic. The UK has only just ended its last SSN construction program, and now work on the next generation Dreadnought SSBN meaning that the Submarine Industrial Base's (SIB) design and production capacity is focused elsewhere from the AUKUS SSN. Dreadnoughts are expected to be under construction well into the 2030s, meaning that the already overstretched base the Astute class has taken significantly longer build than expected (and also cost far more) will struggle to deliver.¹⁷⁾

What is more, the US has also proven unable to increase its output of US Virginia class submarines to two boats per year even though it has had this target since 2011. Boats were procured at a rate of two per year, but the delivery rate has almost never matched this level since boat construction first began in 2004 (the average between 2004 and 2025 is around 1.2 boats per year with the rolling five year average never exceeding 1.4).¹⁸⁾ Even with pledged investment commitments,¹⁹⁾ officials have repeatedly warned about the scale of the challenge with an industrial base one-third the size of the 1980s and with demands on that base of levels comparable to the 1980s.²⁰⁾

A further complication is the aging of the US's SSN fleet, the Los Angeles class SSNs last built in 1996 and rapidly being retired with 27 to be retired by the mid-2030s.²¹⁾ The speed of retirements will exceed new commissions, and this will mean the US will see its SSN force decline before it again increases in size. This makes Australian analysts very concerned that the promised US Virginias may not be provided in the 2030s.

Further, existing plans, even if they were fulfilled, are considered inadequate for Australia's strategic position. Rear Admiral Peter Briggs, a former submariner and former Head of Strategic Command Division within the Australian Defence Headquarters, has argued that Australia would need to build at least 12 SSNs to sustain the necessary crews and support infrastructure to have two SSNs at sea at one time. This is a strategic necessity to sustain a two-ocean basing policy (in the Indian Ocean in Western Australia, and the other half in the Pacific at in Sydney).²²⁾ The current plan is to have a mixed fleet of eight SSNs or perhaps 10 (3~5 US Virginias, 5 AUKUS-SSNS). Briggs continues to call for switching back to a deal with France and acquiring their SSNs.

| Policy Opportunities

The growing troubles with AUKUS have been known about and predicted for some time.²³⁾ The issues with the US SIB have been discussed by the CRS for well over a decade, while the UK's Astute Program has had a troubled record throughout. Given these travails, it is fair to suggest that South Korea might best avoid direct involvement in AUKUS, even if it were offered. But given the potential diplomatic, political and technical benefits to involvement, and the substantial technical obstacles to South Korea's own acquisition of SSNs, it is worth examining new models of engagement with the US and its AUKUS partners.

The first is fuel. South Korea is pursuing a Low Enriched Uranium (LEU)-based nuclear propulsion system, with design, construction, component production, and development all being done domestically, with the US being the source of fuel but little else. The US, UK and Australia all utilize Highly Enriched Uranium (HEU), and neither of the three countries has a significant stockpile of LEU that is unobligated (i.e., unrestricted for military use) and of sufficiently high enrichment levels that is not for other use (the US uses LEU for Tritium production).²⁴⁾

Korea Hydro & Nuclear Power (KHNP) and POSCO have signed an MOU with Centrus Energy to explore ways to boost US uranium enrichment, and the US National Nuclear Security Administration announced in October 2025 a deal to contract with it for unobligated LEU enrichment (specifically High-Assay Low-Enriched Uranium; HALEU).²⁵⁾

Hence, a long-term supply pathway for LEU supplies appears plausible through Centrus, but Centrus is not expected to reach production capacity until "sometime after 2030."²⁶⁾ Moreover, the enrichment level of the LEU in question is itself a variable. Because the fuel would be high-assay low-enriched uranium (HALEU), enriched to more than 5 percent but less than 20 percent, securing nuclear fuel through this pathway could require South Korea's nuclear-powered submarine reactor and fuel system to be designed on the assumption that HALEU will be used.

If the Centrus LEU is not available in time for South Korea’s SSN deployments, which are scheduled in the mid-2030s, the US would have to reach into existing stockpiles and potentially downgrade existing stocks of HEU – a process that the US does for LEU used in Tritium production. This would likely require a separate agreement with the US Department of Energy, and here investment in US military enrichment and downgrading facilities like those Australia is making in the US shipbuilding industry may prove attractive. This could include pledges of investment in the Domestic Uranium Enrichment Centrifuge Experiment (DUECE),²⁷⁾ structured to support a production chain specifically for South Korea’s SSN program. DUECE facilities are intended also support the production of HEU for AUKUS purposes as well, and the continued provision of US extended deterrence more broadly. In other words, investments here would represent direct South Korean support for vital pillars of the US-ROK alliance and AUKUS. Such investments would also not preclude investment in Centrus for civilian purposes too – helping to hedge against growing geopolitical risk from Russian power in the Uranium enrichment services market..²⁸⁾

Beyond this, there is cooperation in co-production of a common pool of spares that the UK and US actually need for their current submarine programs. South Korea is a far more significant industrial power in many of the areas where Australia and the US are currently trying to strengthen their submarine industrial base. CRS reports and Australian government documents provide list of potential components and capabilities that South Korea either already has by dint of its extensive civilian and submarine industrial base, or else will have to develop as part of its SSN program including valves, pumps, pipes, fittings, and fans, as well as electrical components, forgings, and structural fabrication.

This means that in discussions with the US and allies over its SSN program, South Korea can make its capacities available to help fix some of their SIB problems. While the major combat systems and nuclear reactor design and production may be too sensitive for co-production or co-development, many of the components in US and the AUKUS SSN could be produced by South Korean firms in South Korea or overseas. This is likely a discussion that will acquire more momentum as South Korea demonstrates its own design and production capabilities, and begins to build up its own SIB. But such conversations can be begin now.

As part of this, however, there will be a need to develop a new governance framework that ensures ITAR-related restrictions do not restrict the capacity of South Korean firms to support AUKUS. In a common market for nuclear submarine components, the risk of the ITAR taint has been ever present to the point where the US, UK and Australia have created the Authorised User Community (AUC) to facilitate transfer, export and re-export of technologies and systems developed as part of AUKUS. Any co-production or co-design with South Korean involvement will need to include potential (at least partial) admission into the AUC or else some equivalent.

These ITAR-related concerns are general to all defense procurement and development involving the United States and its allies, and there are a range of reform proposals that have been suggested.²⁹⁾ While holistic reform will take time, creating a common procurement market for at least some and potentially a growing number of SSN parts could form a model for future market integration.

Such defense market integration is also a large potential opportunity for US, UK and Australian firms. As South Korea designs its SSN, there will no doubt also present opportunities to US and UK defense contractors. This could involve develop and co-production of new systems for future South Korean SSNs that could also help to improve the capabilities of the SSN AUKUS and other future US submarines.

Finally, there is the MRO issue. As South Korea develops its own SSN capabilities, it will also be able to potentially help with the maintenance and sustainment of US, UK and Australian SSNs in the Indo-Pacific. In the shorter term, South Korea has already begun to do MRO work for US naval vessels in South Korean shipyards, and this could be further expanded in due course to include other surface ships that could free up skilled workers to trained and redeployed into submarine maintenance within the US. South Korea's capacities could also support some UK and Australian MRO needs with the same effect. But in the longer run, South Korea's SSN capabilities and the support infrastructure that will be built to sustain them can also aid in the maintenance and sustainment of US, UK and Australian SSNs.

1. Australian Department of Defence, "Australia Getting Set for Submarine Rotational Force-West," media release, October 29, 2025, https://www.defence.gov.au/news-events/releases/2025-10-29/australia-getting-set-submarine-rotational-force-west.
2. Australian Submarine Agency, "Upgrades at HMAS Stirling Pave the Way for Submarine Rotational Force-West," December 2, 2025, https://www.asa.gov.au/news/upgrades-hmas-stirling-pave-way-submarine-rotational-force-west.
3. Australian Submarine Agency, Australia's AUKUS Submarine Industry Strategy: Building a Strong and Resilient Industrial Base for Australian Submarines (Canberra: Department of Defence, 2025), https://www.asa.gov.au/sites/default/files/documents/2025-03/Australias-AUKUS-Submarine-Industry-Strategy.pdf.
4. ASC Pty Ltd, "Key AUKUS Industry Uplift Activity," ASC Pty Ltd Annual Report 2024-2025, Transparency Portal, accessed June 26, 2026, https://www.transparency.gov.au/publications/finance/asc-pty-ltd/asc-pty-ltd-annual-report-2024-2025/integrated-supply-chain-capability/key-aukus-industry-uplift-activity; Ronald O'Rourke, Navy Virginia-Class Submarine Program and AUKUS Submarine (Pillar 1) Project: Background and Issues for Congress, CRS Report RL32418 (Washington, DC: Congressional Research Service, updated January 26, 2026), https://www.everycrsreport.com/reports/RL32418.html.
5. Inside Defense, "Australia to Transfer Initial $2 Billion to U.S. by End of 2025 for AUKUS," accessed June 26, 2026, https://insidedefense.com/daily-news/australia-transfer-initial-2-billion-us-end-2025-aukus.
6. U.S. Department of Defense, "AUKUS Defence Ministers' Meeting Communique," September 26, 2024, https://www.war.gov/News/Releases/Release/Article/3918402/aukus-defence-ministers-meeting-communique/.
7. Peter Ward, "AUKUS and the U.S.-UK Mutual Defence Agreement," Sejong Institute, accessed June 26, 2026, https://sejong.org/web/boad/1/egoread.php?bd=3&itm=&txt=&pg=1&seq=12886.
8. Heidi M. Peters, Defense Primer: The National Technology and Industrial Base, CRS In Focus IF11311 (Washington, DC: Congressional Research Service, updated December 2, 2024), https://www.congress.gov/crs-product/IF11311.
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10. William C. Greenwalt and Corben M. I. Hays, The Defense Trade Cooperation Treaties with Australia and the United Kingdom: Identifying and Addressing Remaining Barriers (Washington, DC: Atlantic Council, 2020), https://apps.dtic.mil/sti/pdfs/AD1108751.pdf.
11. William Greenwalt, "The Once and Future US National Technology and Industrial Base: An American Perspective," United States Studies Centre, October 8, 2025, https://www.ussc.edu.au/the-once-and-future-us-national-technology-and-industrial-base-an-american-perspective.
12. Navy Lookout, "Royal Navy Attack Submarine Fleet Update All Boats Alongside," accessed June 26, 2026, https://www.navylookout.com/royal-navy-attack-submarine-fleet-update-all-boats-alongside/.
13. Ronald O'Rourke, Navy Virginia-Class Submarine Program and AUKUS Submarine (Pillar 1) Project: Background and Issues for Congress, CRS Report RL32418 (Washington, DC: Congressional Research Service, updated January 26, 2026), https://www.congress.gov/crs-product/RL32418.
14. Ronald O'Rourke, Navy Virginia-Class Submarine Program and AUKUS Submarine (Pillar 1) Project: Background and Issues for Congress, CRS Report RL32418 (Washington, DC: Congressional Research Service, updated January 26, 2026), https://www.everycrsreport.com/reports/RL32418.html.
15. National Audit Office, Investigation into Equipment Cannibalisation in the Royal Navy (London: National Audit Office, 2017), https://www.nao.org.uk/reports/investigation-into-equipment-cannibalisation-in-the-royal-navy/.
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17. Louisa Brooke-Holland, The UK's Nuclear Deterrent: The Dreadnought Programme, House of Commons Library Briefing Paper CBP-9843 (London: House of Commons Library, 2024), https://researchbriefings.files.parliament.uk/documents/CBP-9843/CBP-9843.pdf.
18. Author's calculations: data available from the author on request.
19. U.S. Government Accountability Office, Shipbuilding and Repair: Navy Needs a Strategic Approach for Private Sector Industrial Base Investments, GAO-25-106286 (Washington, DC: GAO, 2025), https://files.gao.gov/reports/GAO-25-106286/index.html.
20. Alexander Grey, "The Submarine Workforce Crisis: Admitting Realities and Restructuring Long-Term Strategy," War on the Rocks, April 4, 2024, https://warontherocks.com/the-submarine-workforce-crisis-admitting-realities-and-restructuring-long-term-strategy/.
21. Nuclear Threat Initiative, "United States Submarine Capabilities," accessed June 26, 2026, https://www.nti.org/analysis/articles/united-states-submarine-capabilities/.
22. Peter Briggs, "AUKUS SSN: A Flawed Plan Heading for the Wrong Destination," Pearls and Irritations, February 2025, https://johnmenadue.com/post/2025/02/aukus-ssn-a-flawed-plan-heading-for-the-wrong-destination/; Peter Briggs, Can Australia Afford Nuclear Propelled Submarines? Can We Afford Not To?, Strategic Insights 129 (Canberra: Australian Strategic Policy Institute, 2018), https://ad-aspi.s3.ap-southeast-2.amazonaws.com/2018-10/SR%20129%20Australian%20nuclear%20propelled%20submarines.pdf?VersionId=yni40dNLDHrTqh3KvxmXmL4noRDwBmX0v.
23. Peter Ward, "The AUKUS Nuclear Submarine Agreement: How South Korea could Boost its Chances of Success," Sejong Institute, 2024-03, accessed June 26, 2026, https://sejong.org/web/boad/1/egoread.php?bd=34&itm=&txt=&pg=7&seq=12779.
24. U.S. Department of Energy, Tritium and Enriched Uranium Management Plan through 2060 (Washington, DC: Department of Energy, 2015), https://fissilematerials.org/library/doe15b.pdf; International Panel on Fissile Materials, "United States to Down-Blend HEU for Tritium Production," IPFM Blog, October 2018, https://fissilematerials.org/blog/2018/10/united_states_to_down-ble.html.
25. Centrus Energy Corp., Form DEFA14A, filed April 24, 2026, https://investors.centrusenergy.com/static-files/1176c707-67de-4c82-9a63-cb5a97d04eb6.
26. Mark Shenk, "US Federal Grants Help Jumpstart Nuclear Fuel Supply Chain," Reuters, February 24, 2026, https://www.reuters.com/business/energy/us-federal-grants-help-jumpstart-nuclear-fuel-supply-chain--reeii-2026-02-24/.
27. National Nuclear Security Administration, "NNSA Selects BWXT for DUECE Pilot Plant Award," U.S. Department of Energy, October 2025, https://www.energy.gov/nnsa/articles/nnsa-selects-bwxt-duece-pilot-plant-award.
28. Peter Ward, "The AUKUS Nuclear Submarine Agreement: How South Korea could Boost its Chances of Success," Sejong Institute, accessed June 26, 2026, https://sejong.org/web/boad/1/egoread.php?bd=34&itm=&txt=&pg=7&seq=12779.
29. Gregory Kausner, "Regulatory Friendly Fire: How ITAR Undermines the Alliance It Was Built to Protect," War on the Rocks, May 18, 2026, https://warontherocks.com/cogs-of-war/regulatory-friendly-fire-how-itar-undermines-the-alliance-it-was-built-to-protect/.

※ The opinions expressed in 'Sejong Focus' are those of the author and do not represent the official views of Sejong Institute.