This is saying that starting in 1934 or so, in five years, the German shipbuilding industry will build 375 more (75/year) submarines than they did OTL can hire enough people do this and start from a situation where no submarines have been built for 16 years so the skill base for this is greatly depleted. Prewar building a Gato class submarine in the USA took roughly 13 months from start to commissioning. Let's assume because the type VII was smaller and had less complex auxiliary machinery (like air conditioning) let us assume under peacetime conditions and also restarting submarine building from zero it would take 7 months on the slipway, the rest of the pre-commissioning fitting out is in the water. This means you need roughly 50 slipways to build 75 submarines a year, as well as the space and equipment needed to fit out the submarines.
I will assume that not building those 9 large ships will give you enough steel, copper, and whatever other RAW materials you need to build the 375 submarines. But this gives you hulls. You need the optics for all those periscopes, which means many, many more optics than for the rangefinders aboard those 9 ships. You need one or two radio sets for each submarine, even if you have 10 radios per large ship (you don't) this means 660 more radios. 375 submarines will require more precision gauges than 9 large ships. 375 U-boats mean 375 deck guns, yes smaller than the main guns on the big ships but it is still 375 "extra"guns" The list goes on and on - it is not just a question of steel.
Germany will need, beginning in 1934, to build all those slipways they don't have. This means that in order to build 375 submarines by September 1939 you'll be building at a rate of 100/year at some point because you won't be building 75/year from the get-go. remember this is on top of small coastal and training submarines Germany must build.
Having a stack of steel, copper, cables, and so forth does not a submarine build. Having foundries and plants does not an armaments industry make - you need to retool and build new production lines. Without the large surface ships, Germany certainly could have built many more submarines, although not 375. As I have previously posted, you need to train a large number of sailors and build a shore establishment to manage this - a nontrivial exercise. Others have pointed out how a massive U-boat building campaign would have resulted in a British response. Finally, if the Germans do not have a significant surface fleet (nothing larger than destroyers) the RN basically has complete freedom to use their capital ships where they want to (no fleet in being) and in the run up to the war will be building more destroyers/escorts.