Government to invest W28.05b in Banwol-Sihwa complex by 2028 to build AI manufacturing cluster

The government plans to invest more than 28 billion won ($18.8 million) by 2028 to drive the AI transformation of materials, parts and equipment manufacturing — known as M.AX — centered on the Banwol-Sihwa Industrial Complex in Gyeonggi Province.

The Banwol-Sihwa Industrial Complex is the largest industrial complex in the Greater Seoul area and a hub for the materials, parts and equipment sector, home to more than 22,000 companies spanning machinery, electronics, petrochemicals and steel.

The Ministry of Trade, Industry and Energy said Minister Kim Jung-kwan held the "Banwol-Sihwa Materials and Parts MINI Alliance Meeting" at the Siheung Business Center in Siheung, Gyeonggi Province, on Monday to discuss plans for advancing M.AX to strengthen the competitiveness of the materials, parts and equipment industry.

The MINI Alliance is a consultative body formed for each of the 10 AX pilot industrial complexes to promote the spread of AI transformation within those complexes.

The meeting focused on plans to build an M.AX cluster within the Banwol-Sihwa MINI Alliance. Participants, including company representatives, agreed to pursue a horizontal M.AX diffusion model — pooling and jointly using equipment, process and operational data — rather than building a leading model around a small number of anchor companies, in order to overcome constraints such as limited investment resources, a shortage of specialists and insufficient data.

The initiative will also draw on the complex's wealth of "tacit knowledge" — the experience and know-how of skilled technicians — by converting on-site expertise into data that AI systems can learn from.

On that basis, AI models tailored to the actual needs of small and medium-sized enterprises will be developed, covering quality control, process optimization and equipment management.

Rather than pursuing fully automated, unmanned factories that require large-scale capital investment, participants agreed to develop a "Banwol-Sihwa-type AI factory" applicable to the individual processes of small and medium-sized enterprises.

Proven models will then be extended to similar processes and industries, allowing small and medium-sized enterprises to experience the benefits of M.AX at low cost.

The Trade Ministry plans to flesh out the initiative through a project to build an AX hub for demonstrating Banwol-Sihwa-type AI manufacturing innovation.

A total of 28.05 billion won — including 14 billion won in national funding — will be invested by 2028 to establish leading AI-transformation model factories in the automotive parts and printed circuit board sectors. An AI manufacturing open lab and an AX comprehensive support center will serve as the main vehicles for developing and demonstrating AI models and supporting their adoption among tenant companies.

The ministry said the complex is an ideal site for demonstrating and spreading small- and medium-enterprise-centered M.AX, given that 96.8 percent of its manufacturers employ fewer than 50 workers.

"We will actively support the realization of a 'miracle of small businesses' at Banwol-Sihwa — where countless small and medium-sized enterprises create data together and make use of AI models — going beyond the vertical diffusion model centered on large companies, and then spread that model to industrial complexes and the manufacturing sector nationwide," Minister Kim said.