SMEs ministry to spend 5 trillion won on factory AI through 2030

The SMEs ministry said Thursday it will put more than 5 trillion won ($3.74 billion) of state resources into smart manufacturing innovation by 2030, under a strategy to turn small and mid-sized factories into test beds for physical AI.

The plan, presented at a national policy coordination meeting chaired by the prime minister at Chong Kun Dang Pharmaceutical in Cheonan, South Chungcheong Province, sets targets of digitally converting 30,000 small manufacturers and bringing AI into 6,000 of them by the end of the decade. Under what the ministry calls its "3X strategy," data gathered through digital transformation will be linked to artificial intelligence and robot conversion, rather than treated as separate upgrade tracks, with the share of small manufacturers using digital systems to climb from 30 percent to 50 percent and the share using AI from 1 percent to 10 percent.

The case for the push rests on a gap the ministry says small manufacturers have struggled to close. Many built basic digital foundations through earlier smart-factory programs, but a shortage of investment capacity and specialist staff has kept them from adopting AI and robotics together.

The strategy runs on four tracks: speeding AI conversion at factories that adopt the technology, nurturing the companies that supply smart-manufacturing equipment and software, building a recycling loop for manufacturing data, and expanding regional and workforce support.

On the supply side, the ministry will draw up a technology roadmap for smart manufacturing and designate outstanding suppliers as specialized smart-manufacturing companies, which would receive preference in government support programs and backing from development through demonstration to overseas expansion. It aims to have 500 such specialists by 2030.

The data track centers on replacing the existing Korea AI Manufacturing Platform with an upgraded system, called Manufacturing AI 24, meant to carry factory data from collection and standardization through asset valuation to the development of AI models and their reapplication on the factory floor. The ministry also plans to accept data contributed in kind in government-supported projects, easing the cash burden on companies.

Demonstrations will cover equipment, processes and entire plants, testing whether AI and robots can be operated together under real production conditions. New growth areas, including security, pharmaceuticals and biotechnology, climate technology and consumer goods, along with promising regional manufacturers, will be the focus.

Collaboration with other ministries is meant to carry the results of national strategic projects into smaller factories, with the science ministry's unmanned factory operating system, built at KAIST with government backing, and the industry ministry's tacit-knowledge AI models to be adapted for small manufacturers' production settings.

"In the era of the AI transformation, manufacturing AI innovation at small and mid-sized companies, which form the backbone of our economy and industry, is key to South Korea's rise as a leading physical AI nation," SMEs Minister Lee So-young said.