Smart Factories Drive Korea's Industrial Future
In 2024, Korea's automobile exports reached $70.8 billion, just shy of its 2023 record of $70.9 billion, which eclipsed its previous record by 30 percent, a record set in 2022. The sector's incredible growth is fueled by value-added, eco-friendly and high-tech vehicles. Korean automakers Kia and Hyundai have gained significant market share internationally due to their competitively priced, feature-packed cars, reliability and high resale value.
Credit: Courtesy of of The Worldfolio.
Credit: Courtesy of of The Worldfolio.
Automotive suppliers sit on strong technology for international expansion
Key for any major manufacturing country, the local supply chains have been remarkably resilient, with suppliers providing robust, innovative and cost-effective technology and solutions. Kwang Myung (KMIN) works closely with Korean and international car manufacturers to produce automotive seat frames. CEO Byung Gun Lim says that as vehicles evolve and adapt, the technologies and functionalities for seat frames change too. "We are actively developing advanced seat frames equipped with features tailored to EVs, hybrids and autonomous vehicles," he explains. KMIN collaborates directly with Korean original equipment manufacturers (OEMs), joining projects early in the life cycle of new vehicles.
Likewise, Hankook Capability (HKC) works closely with the seat makers to produce seatbelts and safety components like channels, latches, rearview mirrors and battery module assembly (BMA) parts. Beyond Korea, the company collaborates with Tier 1 international automotive suppliers in the United States and Europe to enter new markets and supply foreign automakers. "Our ability to understand, meet and exceed these international requirements is a core strength," CEO Sung-Man Kim says.
Prioritizing digital implementation for SMEs competitiveness
In the wake of its labor shortage and global economic uncertainty, the Ministry of SMEs and Startups focuses on fostering smart factories among the supply chain with the 2023–2027 Manufacturing Innovation and DX Acceleration Strategy. Specifically, companies with solid capabilities will be championed as leading models for digital transformation, incorporating AI and digital twin technologies to minimize worker intervention in autonomous factories.
Aluko is integrating AI into its Vietnamese facilities, where the data can be collected and leveraged in its new U.S. production facilities that supply BlueOval SK with battery cases. "We've been collecting extensive data from our Vietnam facilities, studying which configurations are most efficient for producing specific parts," CEO Jinwoo Park states. The company is taking the insights it gains from this data and aims to leverage AI across all aspects of production.
Seil Industrial is looking to strengthen its production capacity with robotics and AI. The company is implementing its Manufacturing Execution System (MES) and process monitoring as part of its smart factory advancement. The mechanical parts manufacturer aims to systematically identify opportunities to improve production flow, enhancing delivery response times and increasing efficiency.
Digital implementation is especially prevalent in the automotive industry—but not exclusively. South Korean companies, such as OVIO, have recognized the importance of counterbalancing China's competitiveness. As a leading Korean OEM/ODM in water purifiers, OVIO has focused on enhancing its production capabilities with high-value offerings and smart factory initiatives. CEO Eun Chun Lee states, "OVIO overcame these challenges step by step through refined technological expertise, a smart factory–based manufacturing environment, precise delivery responsiveness and flexible customization capabilities."
Its extensive portfolio of ice-making water purifiers, sparkling water dispensers and coffee machines has seen improvements in both quality and on-time delivery. "We also ensure transparency across the entire manufacturing process through a point-of-production tracking system, which supports systematic post-launch management and after-sales service," Lee adds.
The overall Korean ICT sector is positioned in niche applications
With the automotive and manufacturing industry's inexorable growth and ability to adapt to new challenges, Korea is set to remain competitive in uncertain economic times. Through initiatives like K-City, which aims to support the development of smart cities at home in Korea and abroad, Korean innovators can invest in the next generation of technology, be it autonomous driving, 5G or other smart technologies.
One company paving the way in this convergence is Ability Systems. With deep roots in system and network integration, the company is now applying its technical expertise to the future of smart mobility. "We strategically chose autonomous driving as a niche market with strong growth potential," says CEO Jae-il Shin. "Our goal is to lead Korea's transformation in port automation by integrating AI, HD mapping and V2X communication into real-world solutions." By focusing on high-stakes environments like harbor ports, where precision and reliability are critical, Ability Systems contributes to the redefinition of ICT integration in the age of AI-driven mobility.
Yet as these physical systems become increasingly interconnected, digital security becomes paramount. Companies like RaonSecure will be vital in ensuring the security of personal data in the digitally connected world. The company enables secure digital identification by leveraging blockchain technology to build a unified, decentralized and data-secure system. Founder and CEO Soon-hyung Lee believes that the era of Web3 and digital transformation is approaching rapidly. "When I refer to digital transformation, I mean not only digital IDs but also the broader infrastructure and services, including authentication, personal data management, digital voting, digital contracts and cryptocurrency," he says.
Another Korean company that is working and rising to meet the demands of this new era is Dream Security. With decades of experience in encryption, authentication and secure communications, Dream Security is also broadening its scope from national infrastructure to global markets. "In the past, our growth was limited by a lack of platform scalability and the language barrier," CEO Beom Jin-kyu notes. "But today, with cloud-based systems and advanced localization tools, Korean SMEs are finally equipped to compete worldwide." The company's Matter certification services, which ensure secure and interoperable connectivity for IoT ecosystems, reflect this global shift.
The sustainable growth of Korean SMEs is rooted in their agile business culture.
This push for implementing digital technologies is deeply rooted in South Korean business culture, which values agility and responsiveness to market trends. KD Finechem exemplifies this ability to capitalize on the evolving market, with the automotive coolant manufacturer leading the way with new formulas suited to the needs of EV and FCEV components and AI data centers. "As the industry shifted toward greener vehicles, demand for specialized coolants increased," CEO Hyun Jin Park explains.
Beyond manufacturing, SungEel HiMetal is leveraging that same agility and innovative spirit in recycling precious metals from the semiconductor and petrochemical industries. It supports manufacturing by working with companies to recover precious metals used in manufacturing processes and refining them back to high purity. CEO S.P. Hong describes the company's mission: "Our ultimate goal in the recycling business is a closed-loop system. A closed-loop approach might seem limited in scope, but it can have a powerful impact."
Since the first car was shipped from the port in Ulsan 50 years ago, global manufacturing has evolved nearly beyond recognition. Today, Korea is at the forefront of emerging technologies, solving humanity's most significant challenges at pace with resilient, innovative solutions. With the globe facing demographic shifts and climate change, advanced plants and technology like those in Ulsan are the progenitors of a better manufacturing future.
All interviews were conducted by The Worldfolio and can be found at www.theworldfolio.com.
This report has been paid for by a third party. The views and opinions expressed are not those of Newsweek and are not an endorsement of the products, services or persons mentioned.
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