South Korea is one of the world’s most advanced and dynamic markets for physical AI adoption. Manufacturing accounts for approximately 25% of the country’s GDP, one of the highest shares among OECD economies. The sector includes globally competitive industries such as semiconductors, automotive, shipbuilding, electronics, and batteries.
Driven by labour shortages, productivity pressures, and rapid population aging, Korean manufacturers are accelerating investments in robotics, automation, and AI-enabled manufacturing. South Korea ranks 4th globally in manufacturing robot market share and 1st globally in robot density. The country’s robotics and automation market was valued at approximately $10 billion in 2024.
Korea’s largest conglomerates are also making significant long-term investments in physical AI technologies:
Despite strong capabilities in hardware and system integration, Korea remains heavily dependent on foreign suppliers for core robotics components and software, with domestic localization rates estimated at approximately 40%. While Korean firms excel in manufacturing and hardware integration, there is significant demand for:
- advanced AI models
- sensing technologies
- control enabling true autonomy and intelligence in industrial environments.
These gaps create clear and timely opportunities for Canadian companies with specialized expertise.
Canada is well positioned to support Korea’s physical AI transition through its strengths in:
- advanced sensing technologies
- AI-enabled automation software
- embodied and agentic AI systems
- robotics software and autonomous systems