"Without AI Transformation, Manufacturing Survival Is at Risk"... Kim Jungkwan Announces M.AX Acceleration for Second Half

"AI is for Maintaining Manufacturing Competitiveness, Not Replacing People"
Emphasis on Retraining and Transition Education
"Oil Price Cap May End If Global Oil Prices Stabilize Around $90"
"Samsung at a Crossroads: Poison or Remedy"
"Exports May Surpass $900 Billion... Double-Digit Growth Beyond Semiconductors"

Kim Jonggwan, Minister of Trade, Industry and Energy, is answering reporters' questions at a press conference held on the 27th in Eojin-dong, Sejong City. Ministry of Trade, Industry and Energy.

Kim Jungkwan, Minister of Trade, Industry and Energy, has signaled a major shift in the direction of industrial policy in the second half of the year, focusing on the manufacturing industry’s AI transformation (M.AX) and regional strategies. Amid tariff pressures from the United States and supply chain crises stemming from the Middle East war, the ministry has chosen a “major transformation to manufacturing AI” as a breakthrough to enhance the competitiveness of the manufacturing sector. Minister Kim even introduced the term “industrial stratagem” instead of the traditional “industrial policy,” revealing his plan to integrate industry, trade, and resources into a single strategic framework.

At a press briefing held in Eojin-dong, Sejong City, on the 27th, Minister Kim stated, “When the administration took office, there was the issue of U.S. tariffs, and now the Middle East crisis has been added on top.” He continued, “In the midst of these overlapping crises, we have decided to push ahead with M.AX as a breakthrough to enhance our manufacturing competitiveness.” He further said, “Ultimately, organizations move according to the awareness and direction of their leaders,” adding, “Both the government and industry are accelerating the pace of the manufacturing industry’s AI transformation as they align in the same direction.”

In particular, Minister Kim emphasized, “Now, the term ‘industrial stratagem’ is more appropriate than ‘industrial policy.’” He explained, “Simply calling issues related to industry, trade, and resources ‘industrial policy’ seems inadequate. The industry, resources, and trade sectors need to be more interconnected, and we are considering how our resources can be linked to industrial competitiveness.”

The Ministry of Trade, Industry and Energy also released the “Key Achievements in Industry, Trade, and Resources for the First Anniversary of the People’s Sovereignty Government” on the 28th, presenting the manufacturing industry’s AI transformation and regional growth strategies as core tasks. The ministry assessed, “The past year was a period of complex crises, with global trade uncertainties, energy and resource supply crises from the Middle East, and fierce competition for AI-driven industrial supremacy all occurring simultaneously,” adding, “We thoroughly managed the crises and boldly seized growth opportunities.”

Currently, about 1,500 companies and institutions are participating in the “M.AX Alliance,” which was launched in September last year. By the end of this year, the ministry plans to deploy more than 200 AI Factories that integrate AI into manufacturing processes across 12 key industries, including semiconductors and shipbuilding. Through this, the ministry expects productivity to improve by more than 30%.

Minister Kim introduced the so-called “dot-line-plane strategy” as a way to spread the adoption of AI in manufacturing. He explained, “If individual success stories like Seongsimdang, which introduced AI into bread manufacturing, are the dots, these dots need to connect into lines and then expand into planes. AI Factory technology is being applied not only in bakeries but also in Makgeolli breweries, Jokbal restaurants, and a variety of field sites.”

He continued, “If you attach an AI sensor to the Makgeolli fermentation process, there is no need for a person to monitor it 24 hours a day. This is a way to assist with difficult tasks and improve productivity.” He also stressed, “Government support alone has its limits. For real expansion, companies must voluntarily adopt AI and a market must form.”

Kim Jungkwan, Minister of Trade, Industry and Energy, visited Seongsimdang at Lotte Department Store Daejeon Branch on the 27th to inspect the AI Factory demonstration site applying AI to the production process of fried soboro. Ministry of Trade, Industry and Energy.

Regarding the pace of the manufacturing industry’s AI transformation, Minister Kim admitted, “Honestly, in my heart, it still feels slow,” but added, “Beneath the surface, change is happening very quickly.” He said, “Once the issues related to data are resolved, the speed will increase dramatically. There is now a consensus among companies that survival will be difficult without transitioning to AI.”

He also remarked, “Korea did not invent internet technology, but it was one of the biggest beneficiaries of the internet era. Securing competitiveness in manufacturing is also essential in the AI era.” He added, “Since only Korea and China have fully established manufacturing bases, we have a strong chance of success.”

As challenges for the domestic AI industry ecosystem, he cited “business models, talent, and funding.” Minister Kim stated, “AI technology itself is rapidly becoming commoditized. What is more important than technology is a sustainable business model.” He continued, “The biggest challenge for AI companies is securing talent, as labor costs are high and turnover is frequent, making it difficult to retain skilled people.”

Regarding concerns about job losses due to AI adoption, he drew a line, saying, “This is not about replacing people but about maintaining the competitiveness of the manufacturing sector.” He explained, “The average age of welders is already around 60, and the next generation is not inheriting these skills. The decline of the U.S. shipbuilding industry was also due to a failure to pass down technology.”

He went on to say, “In the future, instead of people performing dangerous tasks directly, they will take on the role of ‘robot managers’ overseeing robots. The government should focus on creating systems for retraining and transition education.”

Minister Kim also commented on the labor-management conflict at Samsung Electronics. He said, “I believe Samsung is at a crossroads as to whether this will become a poison or a remedy. Labor and management, the board, and members must use this situation as a stepping stone to enhance global competitiveness in semiconductors.”

Regarding the oil price cap, he stated, “If the war ends, the Strait of Hormuz is normalized, and international oil prices stabilize at around USD 90 per barrel, we can consider ending the policy.” On nuclear power exports, he said, “We are in contact with several countries, but as intergovernmental negotiations are ongoing, it is difficult to disclose specifics.”

On winning the Canadian submarine contract, he emphasized, “Korea has actual Jangbogo-class submarines, while Germany is still at the design stage. Our pricing and performance competitiveness are sufficient.” He added, “We have also proposed industrial cooperation packages, including Hyundai Motor hydrogen vehicles and Hanwha defense vehicles, and there are voices of support for Korea from the Canadian auto industry.”

However, he assessed, “Since Canada is a NATO member, it might consider its traditional relationship with Europe, so we cannot let our guard down.” He also commented, “I’ve heard that some are discussing Korea and Germany each building six submarines, and I hope we can achieve a good result, just like Admiral Yi Sun-sin’s twelve ships.”

He expressed strong confidence in export prospects. Minister Kim said, “Cautiously, I believe it is possible for exports to surpass USD 900 billion this year. Exports in industries other than semiconductors have also increased by 14 to 15 percent, and exports from small and medium-sized enterprises are up by 10 percent.” He continued, “We are working to diversify markets, focusing on China, India, and consumer goods, among others. Please look forward to the export trend in the second half of the year.”

This content was produced with the assistance of AI translation services.