Ministry of Trade Industry and Resources

The Ministry of Trade, Industry and Resources (MOTIR, Minister JK Kim) and the Financial Services Commission (FSC, Chairman Lee Eog-weon) held a public-private roundtable for the National Growth Fund-Manufacturing AI Transformation (M.AX) Frontier Project in Seoul on July 1, 2026. Participants discussed how to identify and support leading companies and megaprojects that can help Korea become a global physical AI powerhouse.

Global AI competition is rapidly moving beyond generative AI into physical AI, which enables systems to act and make decisions in the real world. Manufacturing is at the forefront of this shift. Humanoid robots, AI factories, and software-defined vehicles (SDVs) are already reshaping production sites, and Korea risks losing its manufacturing edge if it falls behind.

Korea is well positioned in AI competition, as the country’s world-class manufacturing competitiveness and production infrastructure allow it to link factory data, supply chains, and production technologies with physical AI fields such as robotics, AI factories, and future vehicles. Building on these strengths, MOTIR and the FSC are pursuing the M.AX Frontier Project to identify and foster companies that can lead the global physical AI market.

Under the project, MOTIR will support AI transformation and technological innovation in manufacturing through the M.AX Alliance, while the FSC will use the National Growth Fund to support large-scale investment and scale-up by promising industry leaders. The roundtable was organized to gather input on industry investment needs and discuss cooperation on megaprojects in core physical AI fields, including AI factories, robotics, and future vehicles.

At the roundtable, Morgan Stanley analyst Shin Young-suk outlined Korea’s next-generation manufacturing paradigm as AI, robotics, and mobility converge. He said Korea’s accumulated manufacturing capabilities and ability to adapt quickly to industrial change provide a strong basis to capture new growth opportunities in the physical AI era.

In its presentation on the need for M.AX and related support measures, MOTIR described M.AX as the only viable path to overcoming urgent challenges such as the demographic cliff and declining productivity, noting that the transformation cannot be achieved by individual companies alone. To support this effort, MOTIR has launched the M.AX Alliance, a network of more than 1,500 companies, universities, research institutes, and other organizations. MOTIR said it will rapidly deploy and expand M.AX through three core pillars—AI factories, AI robots, and AI semiconductors—and pursue tailored policies in each field, including large-scale R&D and demonstration projects.

The FSC presented financial support and collaboration measures for M.AX under the National Growth Fund. Together with MOTIR’s M.AX Alliance, the FSC will identify promising companies and megaprojects in key physical AI markets, including AI factories, robotics, future vehicles, and defense, and provide long-term patient capital for their growth and scale-up. This year, the FSC will supply about KRW 16 trillion to six physical AI-related fields—AI, robotics, future vehicles, defense, semiconductors, and secondary batteries—and work with MOTIR and relevant institutions to foster national champions that can lead global markets.

Leading companies in AI factories, robotics, future vehicles, and semiconductors shared industry investment needs and their growth strategies. LS Cable & System, which is carrying out the National Growth Fund’s first M.AX investment project to expand production facilities for ultra-high-voltage submarine cables, also presented its work. The company participates in the AI Factory Division of the M.AX Alliance and is applying AI to the production and quality inspection of ultra-long, heavy submarine cables. Participants stressed that leading in the AI era requires long-term patient capital not only for R&D, but also for large-scale facility investment, demonstration infrastructure, and global expansion.

Noting that the roundtable marked the second industry-finance dialogue since last December, MOTIR Minister JK Kim said Korea needs bold investment in AI factories, AI robots, and semiconductors, which will be central to its growth in the coming AI era. He expressed hope that the National Growth Fund would provide a reliable pathway for growth, as investment in M.AX infrastructure is difficult even for large companies. He added that MOTIR will mobilize its policy capabilities to support the spread of M.AX and help National Growth Fund investments deliver greater impact through M.AX.

Chairman Lee said physical AI, applied across Korea’s diverse and advanced manufacturing sites, is drawing attention for its potential to improve productivity and create new growth engines. He said the National Growth Fund will serve as a powerful vehicle to turn Korea’s vision of becoming the global leader in physical AI into reality and to catalyze private investment. He added that the FSC will provide long-term, bold financial support for physical AI to lay the foundation for Korea to become an unrivaled industrial powerhouse.

Following the roundtable, the FSC and MOTIR will closely align industrial development and financial policy to support the full process from technology development and demonstration to commercialization and scale-up, while expanding cooperation to establish Korea as a leader in global manufacturing and physical AI markets.