“AI Integration Across All Industries Beyond Semiconductors”... Driving Innovation in Steel, Shipbuilding, and Automotive Manufacturing

Emergency Economic Headquarters Meeting Held on the 5th
Announcement of Economic Structural Reform Directions
"Structural Reform Aimed at Rebounding Potential Growth Rate"

The government is set to integrate artificial intelligence (AI) across major industries—including steel, petrochemicals, shipbuilding, and automobiles—as part of its economic structural reform initiative. Starting from the fourth quarter, the government will develop innovation plans for AI-driven manufacturing processes in each sector and will focus on nurturing the robotics industry, thereby laying the groundwork for introducing physical AI across all industries. The aim is to extend the current growth momentum, mainly fueled by the semiconductor sector, to a broader “growth for all,” thereby boosting the nation’s potential growth rate.

On August 5, the Ministry of Economy and Finance announced these policies during a meeting of the Emergency Economic Headquarters and a joint meeting on economic and structural reforms held at the Seoul Government Complex.

South Korea's economy is showing a clear recovery in key indicators such as growth rate, exports, and current account balance, driven by a semiconductor boom. Globally surging memory demand is sustaining price increases for general-purpose DRAM and NAND flash, including High Bandwidth Memory (HBM). With the rapid expansion of actual services like AI search and on-device AI, demand for general-purpose memory used in SSDs is also skyrocketing, suggesting that the semiconductor industry’s upward trend will continue. The photo shows the construction site of the first fab in the SK hynix semiconductor cluster in Cheoin-gu, Yongin, Gyeonggi Province. Photo by Jinhyung Kang

Polarization Hidden Behind the Semiconductor Boom... “Industry-wide Structural Reform is Urgent”

The government has diagnosed that, despite the recent rapid growth driven by the booming semiconductor industry, the gaps between asset classes, incomes, labor sectors, generations, and regions are widening. For the benefits of this semiconductor boom to be felt throughout the entire economy, it believes that structural reform across all core industries—beyond semiconductors alone—is urgently needed. To this end, starting in the fourth quarter, the government will sequentially establish and announce strategies for AI-based innovation and advancement of manufacturing processes in key sectors such as steel, petrochemicals, home appliances, shipbuilding, automobiles, and bio. Through the integration of AI technology to smarten manufacturing infrastructure and accelerate both the shift to high value-added products and eco-friendly operations, the plan is to enhance fundamental industrial competitiveness. Examples include the deployment of shipbuilding-specific humanoid robots to replace dangerous welding tasks, and the development of hydrogen reduction steelmaking technologies with drastically reduced carbon emissions using domestic technology.

In particular, as the AI paradigm shifts from computational and inference-centered approaches to robots and other forms of physical AI, the government will significantly strengthen the foundational infrastructure for this transition. It intends to drive the development of humanoids specialized for the nation’s ten leading industries and is preparing to introduce a plan for distributing up to 1,000 AI-powered robots per year, linked to AI factories and smart manufacturing plants.

Building Social Safety Nets and Supporting Reform Infrastructure for "Growth for All"

The government will also strengthen the social safety net to broaden the reach of economic benefits. This includes bolstering support to alleviate the economic and financial insecurity of vulnerable groups, assisting asset formation throughout the life cycle, and easing management burdens for small business owners. In response to the AI transition, educational and vocational training systems will be restructured, measures will be put in place to protect vulnerable workers, and efforts will be made to ensure a safe working environment.

To enhance policy execution, multiple support systems will be activated. The government will offer a comprehensive package of measures covering fiscal, tax, and financial support, and will also undertake bold restructuring of fiscal expenditures to reinforce its fiscal response capacity. In addition, it will actively participate in social dialogue through organizations such as the Economic, Social and Labor Council and special parliamentary committees to mediate conflicts arising during the reform process.

Regular Monthly Meetings of Structural Reform Ministers... Addressing Urgent Issues Swiftly

The government plans to institutionalize monthly meetings of ministers responsible for structural reform to continuously propose solutions for structural challenges. The implementation structure will be dual-tracked, depending on the nature of the task. Current issues will be coordinated among relevant ministries through a first-tier consultative body and then announced at the ministers’ meeting, with ongoing consultations held with entities such as the National Assembly. For medium- to long-term issues, directions will be set at the ministers’ meeting following joint research by agencies such as KIEP and discussions with experts. In particular, urgent structural reform initiatives—such as the "Youth Employment Recovery Plan" aimed at improving youth employment conditions, and the "Retirement Pension Vitalization Plan" to ensure multi-layered old-age income security—will be quickly added to the agenda for prompt and accelerated deliberation.

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