South Korea targets Physical AI leadership through integrated factory models

At a recent National Assembly forum, South Korean government officials and industry experts discussed strategies to secure leadership in Physical AI—technology that integrates artificial intelligence with physical devices like robots and vehicles.

Experts emphasized that while South Korea has high robot deployment rates, it lacks core technology localization. To counter China, which accounts for over 54% of the global industrial robot market, South Korea aims to focus on integrated factory operations and precision process data rather than competing solely on individual hardware. The proposed strategy involves exporting “Korean-style unmanned factories” as a packaged product.

The South Korean government plans to support the development of general-purpose Physical AI models and establish data acquisition systems. This includes using “world models” to produce synthetic data for training. Starting in August, pilot programs in Jeonbuk and Gyeongnam will test these models in manufacturing environments to create a “data flywheel” for continuous improvement. Industry leaders stressed the need for a domestic value chain spanning from data and world models to AI semiconductors and industrial robotics.