Ministry of Trade Industry and Resources

Manufacturing AI Transformation (M.AX) will use data linkage to expand AI use beyond manufacturing processes to company-wide operations, including production planning, supply chain and inventory management, and worker safety.

The Ministry of Trade, Industry and Resources (MOTIR, Minister JK Kim) held a joint launch ceremony for the Industrial AI Solution and AI Agent projects in Seoul on June 23, 2026. The event brought together approximately 100 participants, including representatives from the Korea Institute for Advancement of Technology (KIAT), manufacturing companies, and AI companies.

Background

As global competition over AI intensifies, major economies are accelerating efforts to develop AI technologies and deploy them in industrial settings. In manufacturing, AI adoption can directly raise productivity and competitiveness, and AI use is expanding beyond the factory floor to broader business operations.

Korea is home to world-class manufacturers and has built up extensive factory-floor data and skilled workers’ know-how. These assets are critical to maintaining and strengthening Korea’s manufacturing competitiveness in the AI era and provide the basis for rapidly deploying AI across industrial sites.

Launched in September 2025 with 10 divisions and approximately 1,000 participating organizations, the M.AX Alliance added the Industrial Complex AX Division in February 2026, forming its “Best Eleven” structure with 11 divisions and approximately 1,500 member organizations. Building on this cooperation, MOTIR plans to expand AI application beyond manufacturing sites to company-wide operations.

Project Overview

The Industrial AI Solution Project is designed to rapidly deploy AI across industrial sites by fine-tuning AI companies’ verified models for immediate use in multiple similar manufacturing processes. Projects involving approximately 30 manufacturing companies have confirmed tangible results, including more accurate steel scrap classification and improved heat exchanger quality prediction. In 2026, the project, with a budget of KRW 12.8 billion, will support approximately 30 manufacturing companies in developing early M.AX success cases and facilitate broader adoption across the industry.

While AI adoption in manufacturing has improved productivity in individual processes, some have noted that its impact on overall business competitiveness remains limited. In a February 2026 demand survey, companies said AI agents should be used not only in manufacturing processes but also in decision-making areas such as production planning, business planning, marketing, and delivery management. For manufacturers, applying AI agents accurately to their specific operations requires manufacturing process data to be closely connected with decision-making.

To address this need, MOTIR will launch the new AI Agent Project, which uses manufacturing data to support company-wide operations. The project will develop and demonstrate AI agents in seven upstream and downstream areas linked to manufacturing processes, including production planning, supply chain management, safety and environmental management, and product design, to support decision-making across factory-floor and office functions.
The call for proposals drew interest from more than 90 companies, and MOTIR selected 10 with strong proposals, including Sungwoo Hitech and Daeduck Electronics. With a 2026 budget of KRW 6.0 billion, MOTIR will work with the Manufacturing Services Division of the M.AX Alliance to demonstrate AI agents on-site and scale the results.

Data Linkage

Expanding AI use beyond manufacturing processes requires manufacturing data to be connected and used across related upstream and downstream areas. The Industrial AI Solution and AI Agent projects share a common feature: both use AI to solve a range of problems at manufacturing sites. As the projects proceed, lead organizations will accumulate meaningful manufacturing data on quality, equipment, production, and other areas. Using this data across projects is expected to improve AI model performance and broaden on-site application.

At the launch ceremony, KIAT, the dedicated agency for the Industrial AI Solution Project, and six lead organizations—the Korea Electronics Technology Institute (KETI), the Korea Automotive Technology Institute (KATECH), the Korea Institute of Industrial Technology (KITECH), the Korea Construction Equipment Manufacturers Association (KOCEMA), the Korea Nano Convergence Industry Association, and Pohang Technopark—signed an MoU to promote the linkage and use of manufacturing data. Under the MoU, manufacturing process data accumulated through the 2025 Industrial AI Solution Project will be used in 2026 follow-up projects and the AI Agent Project. This is expected to carry project outcomes forward and broaden data use in future projects.

MOTIR is implementing the Manufacturing Masters’ Tacit Knowledge Project, included in the 2026 supplementary budget, to convert skilled workers’ experience-based know-how into data. The ministry will establish a foundation for systematically collecting, generating, and securely managing high-quality manufacturing data.

“The outcome of the AI war will ultimately be determined at industrial sites, where added value is created,” said Kim Sung-yul, Director General for Industry and Growth at MOTIR. “MOTIR will support M.AX’s expansion beyond manufacturing sites into decision-making areas such as business planning and production management to drive innovation across company operations.”