AI to Transform Manufacturing Sites... Ministry of Industry Launches 32 'AI Factory' Projects

Productivity Innovation in Key Industries such as Semiconductors, Automobiles, and Shipbuilding
Lower Defect Rates, Shorter Lead Times
Project Design Reflects the Needs of 400 Companies
Diverse Models: From Large-Medium-Small Enterprise Collaboration to Full-Stack Factories

Kim Jeongkwan, Minister of Trade, Industry and Energy, is delivering a congratulatory speech at the "AI Factory M.AX Alliance Strategy Meeting" held at The Plaza Hotel in Jung-gu, Seoul, on October 1, 2025. Photo by Kang Jinhyung

The government is set to expand its 'AI Factory' initiative, which introduces artificial intelligence (AI) into manufacturing sites to enhance the competitiveness of the manufacturing sector. The plan aims to improve the stagnant manufacturing industry by boosting productivity, reducing defect rates, and shortening delivery times.

The Ministry of Trade, Industry and Energy announced on April 29 that it will open a call for 32 new projects under the 'AI Factory Leading Initiative,' with a total budget of 52.75 billion won. This initiative is designed to strengthen industrial competitiveness by integrating AI into manufacturing processes in key industries such as semiconductors, automobiles, and shipbuilding.

The ministry believes that, amid sluggish growth in the manufacturing sector due to a declining working-age population and falling potential growth rates, AI-based manufacturing innovation is essential. The ministry explained that, as global supply chain instability and technological hegemony competition intensify, manufacturing capabilities that bring advanced technologies into mass production have become central to national competitiveness.

The newly announced projects were planned based on the needs of over 400 companies and institutions participating in the 'M.AX Alliance.' Through strategy meetings and general assemblies with these organizations, the ministry identified on-site needs and selected 32 projects with high urgency and significant impact.

In particular, a key focus is on systematically collecting and utilizing manufacturing data generated during project implementation. Participating companies are required to sign a 'Manufacturing Data Submission Agreement,' and the collected data will be used for follow-up research and development, such as the development and advancement of AI models. Through this, the ministry aims to lay the foundation for enhancing AI capabilities across the entire industry.

The support types have also been diversified. Representative models include: the 'Large-Medium-Small Enterprise Collaboration Type,' where companies of all sizes jointly develop AI models at the supply chain level; the 'Manufacturing Process Intelligence Type,' which supports the on-site application of existing AI solutions; and the 'Leading Enterprise Support Type,' which centers on securing and disseminating data through anchor companies. In addition, the initiative includes a 'Delegation Type,' where data and AI models are opened to the government, and a 'Full-Stack AI Factory' concept verification project, where the entire process is operated with AI.

Measures have also been introduced to encourage the participation of regional manufacturing companies. With local government funding as a prerequisite, regional companies will receive up to five additional points, promoting the transition to AI-driven manufacturing in local industries.

The call for project proposals will run from April 30 to May 30, with a project briefing session scheduled for May 7.

An official from the ministry stated, "In this era, manufacturing competitiveness is synonymous with national competitiveness," adding, "We will ensure the smooth implementation of the AI Factory initiative, aiming to become the world's leading M.AX nation by 2030."

This content was produced with the assistance of AI translation services.