Korean Government Backs AI-Driven Autonomous Factories
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Korean Government Backs AI-Driven Autonomous Factories

Korean Government Backs AI-Driven Autonomous Factories

Asia Manufacturing Review Team | Thursday, 18 September 2025

  • Project supports SMEs with subsidies to build AI-powered autonomous factories.
  • Digital twin technology enables predictive testing, defect prevention, and safer operations.
  • Early adopters report significant productivity gains and reduced equipment-related downtime.

The Ministry of SMEs and Startups announced that it conducted a launch ceremony for the "autonomous factory construction project" at the Chong Kun Dang facility in Cheonan, South Chungcheong Province.

An autonomous factory functions by utilizing artificial intelligence (AI) to assess data gathered from on-site sensors to comprehend conditions, modify production schedules, or identify issues early and react accordingly. It is a clever manufacturing approach that employs digital twin technology to replicate the actual factory as it exists in a virtual environment, enabling pre-testing of production processes and forecasting results.

Starting last year, the government has promoted the “autonomous factory construction support project,” offering a total of 1.2 billion won, comprising subsidies and corporate contributions, allowing for up to 600 million won per company for a maximum of two years.

After 20 companies were chosen last year, an additional 20 were picked this year. In this initiative, both companies that create technology solutions and planning organizations that assist in process analysis and strategy formulation engage in a consortium model to enhance the chances of success for the corporations adopting these solutions.

Also Read: S. Korea Targets Humanoid Robots by 2029, AVs by 2030

The chosen companies will have the capability to oversee and manage production instantaneously using AI and digital twins, while also averting defects and safety incidents through virtual simulations. Koavis, an automotive parts manufacturer chosen last year, implemented an automated environment and an AI-driven process management system, attaining a 56% boost in productivity and a 20% decrease in equipment-related issues.

Noh Yong-seok, Vice Minister of the ministry, said, “An autonomous factory is a future factory that goes beyond simple smartification and aims for autonomous manufacturing by using AI and digital twins based on high-quality data,” and added, “We will expand the AI factory budget so that small and midsize enterprises can become the main players in the great transition to digital and artificial intelligence, and we will also establish an institutional foundation to build a smart manufacturing industry ecosystem.”


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