South Korea has embraced the 4th industrial revolution. One of the main areas will be for smart factories in Korea. South Korea aims to build 30,000 smart factories by 2022. The South Korean government created a support program to convert old factories into carbon-neutral smart factories. Those looking to convert their factories in Korea to smart factories will get financial support from the Korean government of $360,000 for reaching medium 2 levels. As well as, $180,000 for reaching medium 1 levels. Factory owners are allowed to use these funds to upgrade outdated facilities to more energy-efficient and intelligent equipment that will emit zero or a minimum amount of greenhouse gases. This has already led to close to 20,000 smart factories being registered in Korea by the end of 2020. It is estimated that this number will surpass 30,000 by the end of 2021.

Therefore, this puts them well ahead of their goal which was to create 30,000 smart factories and 10 smart industrial zones by 2022. The program applies to companies that fit into one of six categories. These six categories are automobile, heat treating, fabric, welding, casting, and plastic working manufacturing. 

What are Smart Factories? 

Smart Factories

A smart factory is a factory that has undertaken digitalization and networking of all processes, products, and resources. It has fully embedded, automated solutions that are being used for manufacturing purposes. Therefore, a smart factory is when the production process is combined with digital technology, smart computing, and big data. In order to achieve this, the factory will need to have advanced networks to create an automated manufacturing environment. When you think of regular factories, you will notice that close to 90% of the factory is what you would call “dead space”. Therefore, only about 10% is actually used for production. Therefore, you can see the huge potential in maximizing every space to use technology to get maximum efficiency. 

The Korean Government’s Support of Smart Factories in Korea 

The South Korean government has been providing direct support to startups and SMEs to establish smart factories by investing $340 million in funding per year. In addition, the Ministry of SMEs and Startups are offering $430,000 for Korean companies overseas to establish robot manufacturing facilities in South Korea. Moreover, the Ministry will establish an AI-based system that utilizes manufacturing data and a cloud-based platform connected to the government’s AI manufacturing platform. They will provide support to help train 40,000 skilled workers to operate fully automated manufacturing sites through various educational programs. Lastly, the Smart Factory Standard Research Council was formed within the private sector to respond to international trends and to undertake efforts to standardize locally developed regulations.

Korean Startup Offering Smart Factory Solution

One of the top startups in the smart factory solution space in Korea is Gentle Energy Corp. The startup offers smart factory solutions using smart sensors. They are able to turn traditional factories into smart factories with no downtime. Their solution is powered by AI technology to offer real-time analysis for optimal production. This means that companies do not have to hire data scientists. Instead, they can leave the maintenance and report analysis to Gentle Energy Corp. for a monthly service fee. There is no risk to the company as Gentle Energy Corp. offers a free 2-month trial. They have already partnered with over 10 factories in Korea and will look to expand their service to the global market. Those looking to take advantage of the latest digital tools to improve their factory production should reach out to Gentle Energy Corp.

Small and Large Companies moving towards Smart Factories in Korea

More and more companies in South Korea are looking to convert their existing factories into smart factories due to the fact that the South Korean government is offering incentives to do so. The Ministry of SMEs and Startups announced that it will support the upscaling of 1,000 factories to be powered by 5G and AI technologies. In addition, Major Korean conglomerates are fully on board with shifting towards a smart solution for their factories. They have accelerating manufacturing automation solutions to improve productivity and profitability. In doing so they have seen reduced costs across the supply chain. These major Korean conglomerates will be key in creating advanced manufacturing environments in Korea by upgrading outdated centralized systems to automatically controlled smart platforms. Below are what some of the major Korean conglomerates are doing in regards to smart factories. 

LG 

LG Uplus has been making initiatives into smart factories. They have stated that LG Uplus will be expanding sales in its smart factory-oriented business by 7x over the next 5 years. In order to achieve this, LG Uplus has teamed up with LG Electronics and LG Chem. This is big news for the development of smart factories in Korea. The reason is that an advanced and fast telecom network like LG Uplus is necessary for the smooth operation of smart factory systems. LG’s 5G and LTE-based wireless communication technologies will help those interested in building smart factories save money. 

SK Telecom 

SK Telecom established a 5G smart factory alliance with Samsung Electronics and Siemens. The telecommunication company also holds a 13.8% share in THiRA-UTECH Co., a provider of integrated smart factory solutions. 

KT

KT has invested over $42 million in Hyundai Robotics Co., a robot manufacturing unit under Hyundai Heavy Industries Group. In addition, KT has formed partnerships with smart factory solutions provider Telstar-Hommel. 

Samsung Electronics 

Samsung Electronics has collaborated with its contractors to streamline its manufacturing lines. They have adopted innovative digital solutions such as 5G, robotics, and IoT into their manufacturing process. Samsung SDS helped set up a smart plant for Korea’s top instant coffee maker Dongsuh Foods Corp in 2020. 

Posco

Posco ICT, Korea’s top steelmaker, partnered with OliveNetworks to provide factory solutions to small and medium-sized companies. Moreover, they are looking to increase the number of smart factories at its Pohang complex. Therefore, their aim is to create a smart system that predicts and controls operations. The aim is to increase the daily production of molten metal.