Ministry of Trade Industry and Resources

The Ministry of Trade, Industry and Resources (MOTIR, Minister JK Kim) announced the key achievements of Korea’s Manufacturing AI Transformation (M.AX) and its plans going forward as part of its policy briefing on August 4.

Korea’s manufacturing sector faces structural challenges, including a shrinking working-age population, an aging skilled workforce, and slowing growth in labor productivity and in the manufacturing sector. MOTIR is pursuing M.AX as a core strategy to combine Korea’s strengths—world-class manufacturers and high-quality factory-floor data—with AI to transform not only production processes but the full range of business operations, from product and service development to production planning, supply chain management, and inventory management.

Implementation Framework: M.AX Alliance

In September 2025, MOTIR launched the M.AX Alliance, a collaborative network spanning industry, government, academia, and research, with around 1,000 participating organizations, including manufacturers, AI companies, universities, and research institutes. In February 2026, the ministry added the Industrial Complex AX Division to advance regional AI transformation (AX) centered on industrial complexes, completing the Alliance’s “Best Eleven” structure of 11 divisions, including AI Factory, AI Semiconductors, and AI Robotics. Participation increased by 50 percent in the Alliance’s first eight months, to around 1,500 companies and organizations, establishing the Alliance as Korea’s flagship platform for manufacturing AX.

In process-focused AX divisions such as AI Factory and AI Manufacturing Services, manufacturers and AI companies are working together to develop Korean AI models and solutions that can operate actual manufacturing processes. In product-focused divisions such as AI Robotics, Autonomous Ships, and AI Semiconductors, anchor companies, component suppliers, and AI companies are working together by sector to develop core components and demonstrate innovative products.

The Industrial Complex AX Division supports AI innovation among tenant companies through collaboration between local companies and universities. MOTIR plans to develop manufacturing AX infrastructure, including AI data centers, tailored to the characteristics of regional industries and company needs, while expanding region-specific collaboration models involving local companies, universities, and research institutes.

Process AX: Measurable Gains in Manufacturing

M.AX is beginning to deliver measurable results at manufacturing sites in industries including semiconductors, automobiles, and shipbuilding.

Through its AI Factory Flagship Project, MOTIR has supported AX at more than 170 manufacturing sites. A review of 42 sites that joined the project relatively early and have started to generate measurable results found that productivity increased by an average of 30.1 percent, while defect rates fell by an average of 15.5 percent.

Individual companies are also reporting clear gains. In semiconductors, Shinhan Diamond Industrial introduced an AI-based automated inspection system for CMP disks, consumables used in wafer polishing processes, cutting quality inspection time by 33 percent.

SurplusGLOBAL applied AI to its harvest process for dismantling semiconductor equipment and sorting and recovering parts, raising productivity by 66.7 percent.

In the automotive sector, Asan Sungwoo Hitech introduced an autonomous, unmanned manufacturing system for EV batteries, reducing quality inspection time by 90 percent. HWASHIN introduced a predictive maintenance system for equipment used in battery case production, lowering the product defect rate by 20 percent.

In shipbuilding, HD Hyundai Samho applied an AI-based autonomous welding and inspection solution to the welding and production processes for rudder trunks, key structural components that support the rudder stock connecting a ship’s steering gear to the rudder. The solution increased productivity by 50 percent. ENK also used an AI vision inspection system to cut inspection time by 22 percent for high-pressure cylinders used in shipbuilding and specialty gas applications.

The AI Factory Flagship Project is also driving the growth of Korean AI solution providers. INEEJI is expanding its explainable AI-based autonomous process operation technology, which provides explanations for AI decisions, into a range of industries including steel, petrochemicals, and cement. OnePredict has grown from a predictive maintenance solutions company focused on forecasting failures in individual machines into a provider of an industrial AI operating system that redesigns factory-wide operations around AI.

MOTIR plans to use these achievements as benchmark models to help SMEs and middle-market companies with limited AI experience and capacity deploy AI models and solutions already proven at manufacturing sites.

Product and Regional AX: Expanding to Products and Industrial Complexes

The scope of M.AX is expanding beyond productivity and quality gains in individual manufacturing processes to the development of innovative AI-enabled products and the transformation of regional manufacturing ecosystems.

In Product AX, work has begun on the development and field demonstrations of industry-specific humanoids designed to perform dangerous or repetitive tasks, including monitoring and extinguishing fires at shipyards, operating valves in toxic-gas environments in the chemical industry, and packaging products at logistics sites.

MOTIR is also developing a domestic Robot Foundation Model (RFM) while accelerating the development and demonstration of on-device AI semiconductors for innovative products such as autonomous vehicles, robots, and home appliances.

In Regional AX, MINI Alliances have been launched at the 10 existing AX pilot industrial complexes, including those in Changwon and Gwangju, bringing together local companies and universities. Through these alliances, MOTIR is developing region-specific M.AX collaboration models that go beyond AI adoption by individual companies. Tenant companies will be able to share infrastructure such as AI data centers, as well as technologies and skilled personnel, enabling innovation across each region’s key industries. MINI Alliances will also be launched without delay at the three additional pilot industrial complexes selected this year.

Looking Ahead

With the M.AX Alliance at its center, MOTIR plans to extend the results already demonstrated at manufacturing sites to companies, industries, and industrial complexes more broadly, while building a manufacturing AX ecosystem in which technology, data, and talent create a virtuous cycle.

First, with a target of establishing 500 AI factories by 2030, MOTIR will continue supporting the collection of high-quality manufacturing data and the development and demonstration of AI models. The ministry will also support the development of core technologies for full-stack AI factories in which AI autonomously operates the entire manufacturing process without human intervention. Following demonstrations at domestic manufacturing sites, MOTIR will pursue commercialization and export of these technologies.

MOTIR will also turn the experience and know-how of master technicians and skilled workers into structured datasets, and develop and validate AI models and solutions trained on this knowledge. This will help address the loss of tacit manufacturing knowledge caused by a declining skilled workforce and generational turnover, while enabling the knowledge of experienced workers to be effectively transferred to personnel on the factory floor.

Furthermore, MOTIR will establish a national manufacturing data library to securely store, manage, and use high-quality manufacturing data collected through the AI Factory project and the manufacturing tacit knowledge project. The library will provide a foundation for incorporating manufacturing data that is currently dispersed across companies and projects into the development of AI models and solutions.

In Product AX, MOTIR will localize production of three key robot components—actuators, robotic hands, and sensors—and develop industry-specific humanoids for 10 major industries, including shipbuilding, automobiles, and steel. The ministry will also establish robot data factories linked to strategic regional industries to collect training data for robots. In autonomous driving, MOTIR will support the development of core technologies, including AI-based autonomous driving models, software-defined vehicle (SDV) platforms, and automotive semiconductors.

In Regional AX, MOTIR will expand the number of AX pilot industrial complexes to 25 by 2030 and operate the M.AX Academy to train field-ready talent with both domain knowledge of regional industries and AI expertise. To raise awareness of M.AX among local manufacturers, the ministry will also hold M.AX Talk Concerts through regional AX/DX Collaboration Support Centers in cities including Gwangju, Gumi, and Cheongju, coordinated by the Korea Institute for Advancement of Technology (KIAT). The events will provide a forum for sharing best practices and information on policy support, and for identifying company needs.

MOTIR is also working with the Financial Services Commission to advance the National Growth Fund-M.AX Frontier Project and has begun providing financial support to promising companies in the AI factory, robotics, and semiconductor sectors. Through the National Growth Fund, the government will continue to provide long-term patient capital for infrastructure development, investment in production facilities, commercialization, and global expansion, while promoting closer coordination between industrial and financial policies.

“Now that we are seeing tangible results on the factory floor, with higher productivity and lower defect rates, we will support the rapid rollout of proven models to SMEs, middle-market companies, and regional industrial complexes,” said MOTIR Minister JK Kim. “We will actively support efforts to accumulate and utilize manufacturing data and the know-how of skilled workers, and to develop full-stack AI factories operated by AI and robots, helping Korea become a global leader in manufacturing AI transformation by 2030.”