"Our Strength Lies in Industrial Experience... Though Late in AI, We Can Excel in Manufacturing AI" [AI Autonomous Manufacturing, Opening the Future]

LG Digital Park Production Technology Institute in Pyeongtaek, Gyeonggi Province
Smart Factory Adoption Center in Operation
Receiving Orders from Companies to Build AI and Robot-Operated Factories
Raising the Target: "Aiming for 400 Billion KRW in New Orders"
The Key Feature of Manufacturing AI: Autonomous Decision-Making
Moving Beyond Traditional 'Factory Automation' Focused on Repetitive Tasks
Data as the Core Element: "Continuous Collection and Improvement"
"Korea's Long Manufacturing Experience... A Strength in Manufacturing AI"
Competing with China's 'Rise' Through Efficiency, Not Direct Confrontation

At the Production Technology Institute located within LG Digital Park in Jinwi-myeon, Pyeongtaek, Gyeonggi Province, visitors to the Smart Factory Adoption Center (SFAC) are first greeted by a 'robot arm' emblazoned with the 'Gold Star' logo. This was the first 'factory robot' developed and used by Goldstar, the predecessor of LG Electronics, in the late 1980s. At that time, Goldstar showed a keen interest in robots used in factories, laying the foundation for related business ventures.

Song Siyong, Executive Director of LG Electronics Smart Factory Business, is being interviewed by Asia Economy at the LG Electronics Production Technology Institute in Pyeongtaek, Gyeonggi Province. Photo by Yoon Dongju

Building on this experience, LG Electronics has become one of the earliest players to enter the 'smart factory' business. In July last year, LG Electronics held a briefing and unveiled its vision to foster its smart factory solutions business as a core project for expanding its B2B (business-to-business) operations. Song Siyong, Executive Director in charge of LG Electronics' Smart Factory Business, told our publication, "Last year was the inaugural year for this business," adding, "We achieved significant milestones in just one year. Last year, we reached sales of about 300 billion KRW, and this year, we are aiming for 400 billion KRW."

A smart factory is, quite literally, about making factories 'smart.' Robots and machines equipped with artificial intelligence (AI) operate the factory and produce goods in place of humans. This is the stage where 'manufacturing AI,' which is gaining attention not only in Korea but also worldwide, is being realized. Smart factories have begun to appear one by one not only in Korea but also in the United States, Germany, and Japan, and now can be found in many locations. The need for such factories has become even more pronounced due to social issues such as the accelerating aging of the labor force and rapid population decline. In fact, it is reported that some small cities in rural Japan, where the working population has virtually disappeared, have been considering smart factory projects for the past decade.

LG Electronics has referenced cases from Siemens, a German electrical and electronics company that was an early mover in the smart factory field, as well as Japanese companies. The company takes orders from businesses and designs and builds environments so that their factories can be operated with AI and robots. Not only LG Group affiliates but also numerous domestic and international factories have entrusted LG Electronics with converting their plants to manufacturing AI. Initially, LG Electronics targeted secondary batteries, automobiles, and logistics as its priority sectors for this business, but has recently expanded the scope to include semiconductors. Song Siyong said, "Recently, there has been strong demand for smart factories in North America and Southeast Asian countries," adding, "Business activities related to this are also becoming more active, and we are putting effort into building the necessary infrastructure."

LG Electronics' first factory robot. Photo by Dongju Yoon

Shin Junheon, head of the Smart Factory team at LG Electronics, is explaining about the smart factory robots at the LG Electronics Production Technology Institute in Pyeongtaek, Gyeonggi-do. Photo by Yoon Dongju

Shin Junheon, head of the Smart Factory team at LG Electronics, is explaining the AI-powered smart factory process at the LG Electronics Production Technology Institute in Pyeongtaek, Gyeonggi Province. Photo by Yoon Dongjoo

The most distinctive feature of a smart factory enhanced with manufacturing AI is its ability to 'make decisions.' While automation of factories through various machines has long been a familiar sight, these machines are often specialized for repetitive tasks. In a smart factory, however, robots can assess production situations and determine manufacturing methods on their own. Song Siyong referred to this as "intelligent automation." For intelligent automation to function smoothly, AI must be able to make correct decisions in the factory, which requires an abundance of supporting data. This is why data is considered the key to the success or failure of a smart factory. LG Electronics is utilizing about 770 terabytes (TB) of manufacturing data accumulated over the past ten years for its smart factory business, and this amount continues to grow. Moon Sangin, Team Leader of the Smart Factory Business SW Technology Team, said, "Even as we operate the smart factory business, we continue to collect data, and by retraining the system with the results and causes, we are enhancing the system's ability to make better decisions."

Shin Junheon, head of the Smart Factory team at LG Electronics, is explaining about the low-floor automated guided robot at the LG Electronics Production Technology Institute in Pyeongtaek, Gyeonggi Province. Photo by Yoon Dongju

Song Siyong, Executive Director of LG Electronics Smart Factory Business (right), and Moon Sangin, Team Leader of the SW Technology Team, are having an interview with Asia Economy at the LG Electronics Production Technology Institute in Pyeongtaek, Gyeonggi Province. Photo by Yoon Dongju

Song Siyong also emphasized, "Although Korea may lag behind the United States and China in terms of fundamental AI technology, we have the capability to lead in manufacturing AI." They focused on the 'industrial experience' that Korea's industry has accumulated over a long period. This experience translates directly into data. He stressed that Korea possesses a broad and extensive range of data applicable to manufacturing AI. Although Korea is a small country in terms of territory, it simultaneously operates dozens of industries such as semiconductors, steel, and shipbuilding, which can be a significant advantage. Song Siyong said, "From the perspective of national competitiveness, I believe manufacturing AI can enhance the value of our national industry."

It is also assessed that, to reach the peak in manufacturing AI, Korea must surpass China. China, under the banner of 'Rise,' is demonstrating formidable production power in the global market based on its massive labor force, and is also achieving remarkable results in manufacturing AI. It is reported that so-called 'dark factories' in China operate 24 hours a day. Moon Sangin said, "Just as China has relied on vast resources and we have competed based on efficiency, the same applies to manufacturing AI. There is no chance of winning under identical conditions," adding, "Smart factories must avoid excessive automation and instead automate only where necessary to simultaneously enhance efficiency and competitiveness. LG Electronics is also focusing on this approach."

There is also the possibility that manufacturing AI could usher in a new renaissance for Korea's manufacturing industry, which had been in decline. As factories become smarter, it is expected that talented individuals who had previously left or avoided the manufacturing sector may return. In smart factories, people have many roles to play in areas such as factory security, machine repair and inspection, and the overall design and planning of processes, instead of being directly involved in production. LG Electronics is reallocating its workforce accordingly to improve efficiency, and this trend has also been reflected in recent hiring practices. There are signs of change. Moon Sangin said, "Recently, I feel that people with excellent qualifications are returning to the manufacturing sector through various recruitment channels," adding, "This shift is occurring because factories are now seen not as sites of manual labor but as places where AI knowledge is used to develop solutions. As manufacturing AI advances, I believe it will also help attract more STEM talent to the manufacturing industry."