Koo Yoonchul: "AI Factories Are an Essential Survival Strategy... Comprehensive Support Measures to Be Prepared"

by Lee Dongwoo

Published 19 Sep.2025 12:14(KST)

Targeting 40% of Manufacturing Companies to Adopt AI by 2030

The government is set to introduce a comprehensive support package-including budgetary, tax, financial, and regulatory relief measures-to raise the proportion of manufacturing companies adopting artificial intelligence (AI) from the current 5% to 40% by 2030.

On September 19, Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul met with representatives from leading companies and experts in the field at the "AI Transformation Relay On-site Meeting" held at the Korea Advanced Institute of Science and Technology (KAIST) AI Factory Lab in Daejeon. He stated, "AI-based manufacturing process innovation is an essential strategy for survival."

This meeting was organized to review the progress of the AI Transformation Leading Project-one of the core pillars of the "New Government Economic Growth Strategy" announced on August 22-and to engage in dialogue with businesses and experts. It is the second relay meeting, following the robotics and automotive sector meeting held on September 12.

Deputy Prime Minister Koo emphasized, "Building and expanding AI factories across the manufacturing sector is the key to transforming our manufacturing industry from A to Z-not only by improving productivity, but also by enabling consumer-tailored demand response, reducing carbon emissions, and ensuring workplace safety. By combining world-class manufacturing capabilities with AI technology, we can lead globally."

The government expects that the spread of AI factories will not only enhance productivity, but also fundamentally transform the manufacturing sector by enabling flexible, multi-product production systems to meet consumer-specific demand, reducing carbon emissions, and strengthening workplace safety.

Tangible results are already being seen on the ground through AI adoption. At the meeting, POSCO shared its experience of using AI to determine the optimal input ratios of raw materials and fuel in the ironmaking process, and introducing a smart blast furnace capable of self-inspection and diagnostics to improve productivity. Other participating companies also shared their experiences with AI adoption and called for expanded support for research and development (R&D) and demonstration projects in the manufacturing AI sector.

Deputy Prime Minister and Minister of Economy and Finance Koo Yoonchul visited the KAIST AI Factory Lab in Yuseong-gu, Daejeon on the 19th to discuss plans for promoting the AI factory sector at the "AI Transformation Relay On-site Meeting." (Photo by Ministry of Economy and Finance)

In response, the government reaffirmed its commitment to more aggressively promote policies for the spread of AI factories based on corporate feedback. The number of leading AI factory pilot plants, currently at 26, will be expanded significantly to 500 by 2030. In addition, in cooperation with commercial banks and other financial institutions, the government will provide dedicated insurance products worth up to 10 trillion won and a loan program totaling 200 billion won to ease the initial investment burden on companies.

The government has also significantly increased next year's budget for smart factories. The budget for supporting the establishment and expansion of smart factories will be raised from 236.1 billion won this year to 436.6 billion won next year, an increase of 84.9%. To support small and medium-sized enterprises in transitioning to AI factories, accelerated depreciation (up to 50%) for business-use tangible assets will be introduced and applied through the end of 2028.

Furthermore, the government will secure core physical AI technologies by developing AI factory-specialized models and software platforms (40 billion won by 2026), as well as ultra-precise Large Action Model (LAM) technology (40 billion won by 2026). Efforts will also be accelerated to establish testbeds and preempt global standards.

The Ministry of Economy and Finance added, "We will review the feedback raised at today's meeting and reflect it in future policy formulation and institutional improvements, while continuing on-site meetings for the AI Transformation Leading Project."