South Korea's Big Companies Are Building Robots and AI Hardware for Factories
South Korea's Big Companies Are Building Robots and AI Hardware for Factories
South Korea's largest manufacturers—including Hyundai, LG, and Samsung—are investing heavily in robotics and artificial intelligence technology. They see an opportunity to move beyond making cars and electronics and become suppliers of the intelligent machines and computing power that factories will need in the coming years.
This shift is driven by two forces: factories are starting to use more robots and AI to automate tasks and check quality, and the companies already have the skills to design and build precision machinery. So instead of staying in just one industry, these Korean giants are expanding into a new business: selling the technology that powers smart factories.
Hyundai's Push Into Robotics
Hyundai Motor Group set up a dedicated robotics lab in 2019. In 2021, the company bought Boston Dynamics, a well-known robotics research firm, to gain expertise in building advanced machines.
Last year, Hyundai showed off a robot called MobED at a trade show. This robot is built to work in factories—moving materials and performing tasks without human operators. One key innovation in MobED is an improved motor system that uses more electrical power than older designs. This matters because robots need to run longer and carry heavier loads while moving precisely. Better motors mean the robot can do more work before needing a battery recharge.
Hyundai is not just selling robots to other companies. The company also tests new robotics technology on its own factory floors. This gives engineers a real-world testing ground where they can refine the technology before selling it to customers.
LG Electronics Moves Into Smart Factories
LG Electronics announced in July 2024 that it was expanding into "smart factory" services. The company combines artificial intelligence and digital tools with its 66 years of experience running manufacturing plants.
LG's smart factory business offers services like monitoring how production lines are working, spotting quality problems automatically, and predicting when equipment might break down before it fails. The company also designs and sells industrial robots.
This approach lets LG act as a full-service provider rather than just a supplier of individual parts. When LG builds smart factories for other companies, it draws on everything it has learned from running its own electronics manufacturing plants—and that is a significant advantage.
Why All This Computing Power Matters
Robots and smart factories need enormous amounts of computing power. These systems have to process information from dozens of sensors in real time and make decisions instantly. That computing power has to happen fast enough to keep the factory running safely and efficiently.
To handle this, companies are building much more powerful computer chips. One example is the Cerebras WSE-2, a processor with 2.6 trillion transistors—tiny switches that do the actual computing. To put that in perspective, earlier chips of this type had about 1.2 billion transistors. That is roughly 2,000 times more.
Nvidia, another major chip maker, is also pushing forward with new designs. The company released its Hopper GPU, a specialized processor built for AI tasks, alongside a new processor called the Grace CPU Superchip.
Why Korean Companies Are Well-Positioned
This pattern is not entirely new. In the 1990s, personal computer companies expanded into making server hardware. Phone makers later moved into chip design when smartphones needed more processing power. Korean companies are following a similar playbook: they are expanding their factories and knowledge to capture more of the robotics and AI supply chain.
Samsung shows how this works in practice. In 2016, Samsung spent $8 billion to buy Harman, a company that made automotive electronics. That acquisition gave Samsung expertise in building high-quality parts for cars and connected devices. Now Samsung uses that knowledge to build automation systems for factories.
The broader picture here is one of vertical integration—when companies expand to handle more steps in the production process, from design through manufacturing. This strategy can work well when a company has the right skills and resources, and Korean manufacturers have both.
Working With Universities
South Korea's manufacturers are also partnering with universities to develop new manufacturing techniques faster. Pusan National University, for example, runs a research center focused on advanced manufacturing, working with industry partners to test new ideas before they go into full production.
When universities and companies work together like this, the benefits flow both ways. Universities get real-world problems to solve and funding for research. Companies gain access to the latest research and skilled engineers. The process accelerates how quickly new technology can move from the laboratory to the factory floor.
What Comes Next
Korean manufacturers are positioning themselves not just as buyers of robotics technology, but as builders and sellers of it. If these companies succeed in scaling up their operations, they could shift how the world sources robotics equipment and specialized computer chips—particularly as countries worry about depending too heavily on any single supplier in places like Taiwan.
These companies have a track record of scaling advanced manufacturing processes reliably. This suggests they have a reasonable chance of success. The main challenge will be whether they can move quickly enough to stay ahead of competitors while keeping the same quality standards their customers expect.
