Tokyo Report | Security | East Asia

A New Japanese Drydock and the Limits of Allied Cooperation

Japanese shipyards are expanding, but the future space may already be spoken for. 

On August 19, Nikkei Asia reported that Namura Shipbuilding was planning to construct a new drydock for large vessel construction by 2035. Japan is already the third-largest shipbuilder in the world, and the expansion carries significant security and economic implications for the region. It follows a renewed commitment by Japan to invest in the shipbuilding sector, amidst growing security concerns around lackluster U.S. capacity and the role allies like Japan can play in filling security gaps. 

Yet the announcement highlights a more sobering reality regarding those prospects. Japanese shipyards are expanding because their current capacity is fully maxed out. Consequently, scaling future alliance cooperation may depend far less on reaching formal agreements than on securing available schedule space.

The new drydock would be located in Imari Bay, on the northwestern coast of Kyushu in Saga prefecture, and would be the first new large drydock in Japan since 2017. Upon completion, it will reportedly focus on construction of liquefied natural gas carriers. 

The project follows a string of announcements from both the Japanese government and industry aimed at bolstering the sector. In November 2025, Prime Minister Takaichi Sanae designated 17 nationally important sectors – including shipbuilding – as sources of economic growth through public-private investments. The Japanese shipbuilding industry shared this ambition, outlining a roadmap aimed at doubling annual shipbuilding capacity to 18 million gross tons by around 2035. Both Japan’s government and industry are aiming to establish a 1 trillion yen ($6.5 billion) fund aimed at reviving Japanese shipbuilding.

This slew of investments is motivated by multiple factors. For one, the shipbuilding sector was an important driver of Japanese economic growth and industrialization in the post-World War II period. By shoring up the sector, Japan can maintain the industry’s industrial capacity, even though it has gradually lost market share over the past few decades. 

Second, the importance of shipbuilding grows in the context of China’s globally dominant shipyards and growing naval presence. This is in marked contrast to the largely inadequate shipbuilding sector of the United States, whose naval shipyards are plagued by delays and maintenance bottlenecks. Meanwhile, supported by protectionist policies, U.S. commercial shipyards remain competitive solely within domestic markets, building ships at roughly quadruple the international price.

U.S. vessels have long conducted maintenance at U.S. bases in Japan. Discussions between Japanese and U.S. officials at the Defense Industrial Cooperation, Acquisition, and........

© The Diplomat