South Korea Industrial AI Market Research Report By Offering (hardware, software, AI platform, AI solution), By Technology (computer vision, deep learning, natural language processing (NLP), context awareness), By Application (predictive maintenance and machinery inspection, material movement, production planning, field services, quality control, others) and By Industry (automobile, energy and power, pharmaceuticals, heavy metals and machine manufacturing, semiconductor electronics, food beverages, manufacturing, others)- Forecast to 2035

South Korea Industrial AI Market Overview

As per MRFR analysis, the South Korea Industrial AI Market Size was estimated at 103.9 (USD Million) in 2023.The South Korea Industrial AI Market is expected to grow from 151.9(USD Million) in 2024 to 530.5 (USD Million) by 2035. The South Korea Industrial AI Market CAGR (growth rate) is expected to be around 12.041% during the forecast period (2025 - 2035)

Key South Korea Industrial AI Market Trends Highlighted

The industrial AI market in South Korea is expanding significantly due to a number of important factors. Strong government backing for digital transformation programs, including the "Digital New Deal" program, which aims to increase the nation's economic competitiveness, is one of the main factors driving the market.

The need for AI technologies is also being fueled by the growing automation of many industries, such as manufacturing and logistics. South Korean businesses are eager to cut expenses and increase operational effectiveness, which speeds up the adoption of AI solutions. The South Korean industrial AI market offers a plethora of prospects to be investigated amid these factors.

A fertile field for AI applications is presented by the increased focus on smart factories, which is encouraged by investments and policies from the government. Additionally, quality control and predictive maintenance systems have room to grow, giving producers a means of increasing dependability and productivity.

The innovation landscape is further enhanced by South Korea's growing startup scene, which opens the door for new companies to provide specialized AI solutions that are suited to the demands of the regional market.

In South Korea, ideas like the combination of artificial intelligence (AI) and Internet of Things (IoT) technology have recently gained popularity. Real-time data analysis made possible by this connectivity enables firms to react swiftly to shifting circumstances.

Furthermore, there is a discernible trend toward the use of machine learning algorithms to streamline processes, which is becoming more and more apparent in industries like electronics and automobiles, two important cornerstones of the South Korean economy.The cooperation of government, industry, and academia will be essential in propelling the expansion of the South Korean industrial AI market as industries continue to change.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

South Korea Industrial AI Market Drivers

Increasing Demand for Automation in Manufacturing

The South Korea Industrial AI Market is significantly driven by the rising demand for automation in the manufacturing sector. As South Korea is one of the world's leading manufacturing hubs, particularly in electronics, automotive, and machinery, businesses are increasingly adopting artificial intelligence technologies to enhance productivity and reduce operational costs.

The South Korean government has pledged to invest approximately USD 1.5 billion in the digital transformation of the manufacturing industry by 2025, according to the Ministry of Trade, Industry and Energy.

This initiative aims to incorporate smart factory solutions that integrate AI to improve efficiency and drive innovation. Established companies such as Samsung Electronics and Hyundai Motor Company are already implementing AI for predictive maintenance and optimizing production processes.

The positive results from these implementations are pushing smaller and medium-sized enterprises in South Korea to invest in AI solutions, thereby accelerating growth in the South Korea Industrial AI Market.

Government Support and Initiatives for AI Development

The South Korean government has established various support frameworks and initiatives aimed at promoting artificial intelligence technologies, which serve as significant drivers for the South Korea Industrial AI Market.

The government is expected to invest around USD 2.5 billion in AI research and development from 2020 to 2025, as outlined in the National AI Strategy. This funding is designed to foster innovation, support startups, and facilitate collaboration between industry and academic institutions.

For instance, the establishment of the Artificial Intelligence Graduate School in 2020 is aimed at developing talent in this sector, ensuring that the skilled workforce supports the burgeoning Industrial AI landscape.

Companies like LG Electronics and SK Telecom have proactively partnered with government organizations to leverage these initiatives, ensuring a strong ecosystem that propels market growth in industrial AI applications.

Rise of IoT and Big Data Integration in Industrial Processes

The integration of Internet of Things (IoT) devices and Big Data analytics into industrial processes is a crucial driver for the South Korea Industrial AI Market. With South Korea having one of the highest rates of smartphone penetration globally, businesses are increasingly turning to IoT solutions for real-time data collection and analytics.

According to a report by the Korea Internet Security Agency, the number of IoT devices in South Korea is expected to exceed 40 million by 2025. This growing connectivity allows for the collection of valuable data, which Artificial Intelligence can analyze to optimize operations, forecast trends, and enhance decision-making in industrial settings.

Companies like Hanwha and Posco are leveraging AI and IoT solutions to streamline supply chains and improve operational efficiency, thereby contributing to the robust growth of the South Korea Industrial AI Market.

Focus on Enhancing Cybersecurity in Industrial AI Systems

Growing concerns regarding cybersecurity threats pose a significant driver for advancements in Industrial AI systems within South Korea. As industrial processes and operations increasingly rely on interconnected technologies, the potential for cyber threats also escalates.

The South Korean government, recognizing these threats, has announced plans to enhance cybersecurity measures across different sectors, allocating resources to develop stronger security protocols for AI systems. As per cybersecurity reports from the Ministry of Science and ICT, incidents related to industrial cyberattacks are projected to increase by 20% annually.

Companies like KT Corporation are actively developing AI-driven cybersecurity solutions tailored for industrial applications, ensuring their systems remain secure from evolving threats. This focus on cybersecurity will further propel the adoption of AI technologies, paving the way for growth in the South Korea Industrial AI Market.

South Korea Industrial AI Market Segment Insights

Industrial AI Market Offering Insights

The South Korea Industrial AI Market is rapidly evolving, with the offering segment playing a pivotal role in its growth and development. This segment comprises various components, including hardware, software, AI platforms, and AI solutions, each contributing significantly to the market dynamics.

Hardware is essential as it supports advanced machine learning algorithms and analytics processes, ensuring that industrial applications run smoothly and efficiently. The software segment powers these applications by enabling data processing capabilities and providing insights that enhance operational efficiencies across various sectors, including manufacturing, logistics, and energy.

AI platforms serve as the backbone of the Industrial AI Market, facilitating the deployment of AI models and making it easier for organizations to integrate AI into their existing workflows. Conversely, AI solutions are designed to address specific industrial challenges, offering tailored approaches that enhance productivity and reduce costs.

In South Korea, the government's commitment to advancing technology and fostering innovation has positively impacted these offerings, pushing industries to adopt AI technologies that generate value. This trend corresponds with South Korea's robust investment in Research and Development, highlighting the nation's focus on establishing itself as a leader in AI technology on a global scale.

Major industries, including automotive and electronics, are increasingly implementing these offerings to leverage the potential of AI, driving competitive advantages and significant improvements in performance.The ongoing digitization efforts within South Korean industries have favored the software and AI solution segments, propelling them towards a higher adoption rate as companies seek to improve processes and analytics capabilities.

Challenges persist, such as the need for skilled professionals trained in these technologies, as well as concerns regarding data privacy and security. Nevertheless, opportunities abound for firms to innovate and collaborate across sectors, allowing for enhanced offerings that cater to a diverse range of industrial needs.

As such, this offering segment is positioned to dominate the Industrial AI Market landscape, driven by continuous advancements in technology and a greater focus on operational excellence. The South Korea Industrial AI Market revenue will likely benefit greatly from these trends, providing a fertile environment for growth and expansion within the industrial sector.

The statistics surrounding the market reflect a growing recognition of the importance of these offerings as organizations increasingly realize the value that AI can bring to their operations. Overall, the offering segment of the South Korea Industrial AI Market is essential in shaping the future of the industry through innovative solutions, enhancing productivity, and creating new opportunities for economic growth.

Source: Primary Research, Secondary Research, MRFR Database and Analyst Review

Industrial AI Market Technology Insights

The South Korea Industrial AI Market, particularly in the Technology segment, has been showcasing significant growth and innovation driven by advancements in artificial intelligence. Computer vision has emerged as a critical technology, enabling machines to interpret the visual world, which is essential in sectors like manufacturing and security for improving automation and quality control.

Deep learning techniques, which mimic human cognitive functions, are playing a transformative role across industries, enhancing decision-making processes and operational efficiencies.Natural Language Processing (NLP) facilitates improved human-computer interactions, allowing industries to analyze large volumes of text data and customer feedback, thereby optimizing service delivery and enhancing customer satisfaction.

Meanwhile, context awareness technologies, which focus on understanding the context of data, are pivotal for deploying AI systems that react intelligently to dynamic environments.This segment is expected to benefit from the increasing digitalization efforts in South Korea, propelling the market forward as organizations seek to leverage cutting-edge technologies for competitive advantage. Overall, the South Korea Industrial AI Market presents a robust landscape for technological advancement, ripe with opportunities and a forward-looking approach to industrial challenges.

Industrial AI Market Application Insights

The South Korea Industrial AI Market exhibits strong potential in the Application segment, driven by advances in technology and industry needs for efficiency. Predictive maintenance and machinery inspection plays a crucial role, as these applications help reduce downtime and extend equipment lifespan, ensuring operational efficiency across various sectors.

Moreover, material movement and production planning are increasingly important as industries leverage AI to optimize supply chain processes and enhance production schedules, thereby reducing costs and improving delivery times.

Quality control is another critical application in the market, enabling manufacturers to maintain high product standards through real-time monitoring and machine learning algorithms to identify defects early in the production process. Field services are also significant, allowing companies to perform remote monitoring and diagnostics, which enhance service delivery.

The South Korea Industrial AI Market benefits from governmental support to advance technology adoption, fostering innovation and growth in various industries. With rapid industrialization and an increasing focus on digital transformation, the demand for AI-driven applications is expected to grow further, creating numerous opportunities for businesses to capitalize on.

Expansion in infrastructure projects also bolsters the significance of these applications, reinforcing the need for AI solutions that can deliver improved operational outcomes tailored to the specific needs of South Korea's dynamic industrial landscape.

Industrial AI Market Insights

The South Korea Industrial AI Market is experiencing significant development across various sectors, driven by advancements in technology and increasing demand for automation. In the automobile sector, the integration of AI has streamlined manufacturing processes, ensuring efficient production lines and improved safety features.

The energy and power industry benefits from AI by optimizing resource management and enhancing predictive maintenance, ultimately leading to reduced operational costs. Pharmaceuticals harness AI for drug discovery and research processes, enabling faster and more reliable results.

The heavy metals and machine manufacturing sectors remain pivotal, as AI enhances precision in production and the monitoring of machinery performance. Meanwhile, the semiconductor and electronics industries strive for innovation by leveraging AI to enhance design processes and predict market trends.

The food and beverages sector employs AI to improve supply chain management and quality control, ensuring product safety and efficiency. Collectively, these segments not only show the versatility and applicability of AI in various fields but also highlight the importance of technology in revolutionizing traditional industries within South Korea, paving the way for enhanced productivity and economic growth.

South Korea Industrial AI Market Key Players and Competitive Insights

The South Korea Industrial AI Market has emerged as a significant sector characterized by rapid advancements in technology and a growing demand for AI-powered solutions across various industries. The competitive landscape is marked by a mix of established players and startups, all vying to innovate and capture a greater market share.

With a strong focus on automation, machine learning, and data analytics, companies are actively seeking to enhance operational efficiencies and improve decision-making processes. The collaboration between technology firms and various sectors such as manufacturing, automotive, and logistics is driving the adoption of industrial AI, fostering a dynamic environment ripe for competition and growth in South Korea.

SK Hynix has established itself as a pivotal player in the South Korea Industrial AI Market, primarily leveraging its robust expertise in semiconductor technology. The company focuses on integrating AI to optimize its production processes, enhance data processing speeds, and minimize operational costs.

The strengths of SK Hynix lie in its commitment to research and development, which positions it to capitalize on emerging trends in the AI sector. Furthermore, a solid network of collaborations with local and international tech firms enables SK Hynix to adapt quickly to the evolving demands of the market, enhancing its competitive edge within the South Korean industrial landscape.

LG Electronics, another powerhouse in the South Korea Industrial AI Market, has made significant strides in the integration of AI solutions across its product offerings. The company focuses on smart manufacturing and intelligent automation systems, aiming to improve efficiency and productivity in industrial operations.

Key products include AI-driven manufacturing equipment and advanced analytics algorithms designed to streamline processes. LG Electronics also stands out for its commitment to sustainability and innovation, frequently investing in research to enhance its capabilities in AI technology.

With a presence that extends across various industrial sectors, the company's strategic partnerships and initiatives have bolstered its position in the market. Recent mergers and acquisitions further enhance its portfolio, positioning LG Electronics as a formidable competitor committed to driving advancements in the South Korean industrial AI landscape.

Key Companies in the South Korea Industrial AI Market Include

• SK Hynix


• LG Electronics


• Hyundai Motors


• SK Telecom


• Samsung Electronics


• CureMet


• GS Engineering and Construction


• Hanwha Group


• Doosan Heavy Industries


• Naver


• Kakao


• Lotte Chemical


• Hanwha Techwin


• Daewoo Engineering and Construction


• POSCO

South Korea Industrial AI Market Developments

Recent developments in the South Korea Industrial AI Market demonstrate robust advancements among key players. In October 2023, SK Hynix announced its investments in AI-driven semiconductor manufacturing, aiming for enhanced efficiency and production capabilities.LG Electronics and Hyundai Motors continue to expand their AI applications in automotive technology, particularly in autonomous driving and in-car user experience, fostering innovation in the mobility sector. In the telecommunications arena, SK Telecom is focusing on integrating AI into its 5G services, enhancing network functionalities and customer engagement.

Mergers and acquisitions have also shaped the landscape; for instance, in July 2023, Samsung Electronics acquired a local AI startup to bolster its smart home and IoT solutions. Furthermore, Hanwha Group has been actively acquiring companies in the green technology sector, aligning with its AI initiatives for sustainable solutions.Over the last couple of years, major investments in Research and Development across these companies demonstrate a significant market valuation growth, with government support for AI technology as a critical factor in South Korea's industrial transformation. In March 2022, the South Korean government announced a dedicated fund for AI research, emphasizing its commitment to becoming a global leader in AI technology.

South Korea Industrial AI Market Segmentation Insights

• Industrial AI Market Offering Outlook
  
  
  
  • hardware
  
  
  • software
  
  
  • AI platform
  
  
  • AI solution
  
  
  
  


• Industrial AI Market Technology Outlook
  
  
  
  • computer vision
  
  
  • deep learning
  
  
  • natural language processing (NLP)
  
  
  • context awareness
  
  
  
  


• Industrial AI Market Application Outlook
  
  
  
  • predictive maintenance and machinery inspection
  
  
  • material movement
  
  
  • production planning
  
  
  • field services
  
  
  • quality control
  
  
  • others
  
  
  
  


• Industrial AI MarketOutlook
  
  
  
  • automobile
  
  
  • energy and power
  
  
  • pharmaceuticals
  
  
  • heavy metals and machine manufacturing
  
  
  • semiconductorelectronics
  
  
  • foodbeverages
  
  
  • manufacturing
  
  
  • others
  
  
  
  

Report Attribute/Metric Source:	Details
MARKET SIZE 2018	103.9(USD Million)
MARKET SIZE 2024	151.9(USD Million)
MARKET SIZE 2035	530.5(USD Million)
COMPOUND ANNUAL GROWTH RATE (CAGR)	12.041% (2025 - 2035)
REPORT COVERAGE	Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
BASE YEAR	2024
MARKET FORECAST PERIOD	2025 - 2035
HISTORICAL DATA	2019 - 2024
MARKET FORECAST UNITS	USD Million
KEY COMPANIES PROFILED	SK Hynix, LG Electronics, Hyundai Motors, SK Telecom, Samsung Electronics, CureMet, GS Engineering and Construction, Hanwha Group, Doosan Heavy Industries, Naver, Kakao, Lotte Chemical, Hanwha Techwin, Daewoo Engineering and Construction, POSCO
SEGMENTS COVERED	Offering, Technology, Application, Industry
KEY MARKET OPPORTUNITIES	Predictive maintenance solutions, Manufacturing process optimization, Quality control automation, Supply chain intelligence, Workforce productivity enhancement
KEY MARKET DYNAMICS	Rapid technological advancements, Strong government initiatives, Rising demand for automation, Increasing investment in AI, Growing focus on sustainability
COUNTRIES COVERED	South Korea