Gov't to invest W2.3tr in humanoid robots, W2.8tr in physical AI by 2030

Domestic parts localization target set at 80%; independent technology to cover finished products, components, software and data

Government to purchase 5,000 domestic robots and train 20,000 AI specialists

Existing SME support programs to be restructured

The government plans to invest 2.3 trillion won ($1.66 billion) through 2030 to build a humanoid robot ecosystem, aiming to establish a mass-production system for specialized humanoid robots across 10 industries by that year — with domestic technology covering everything from finished products and key components to software and data.

An additional 2.8 trillion won has been earmarked to deploy physical AI in real-world settings across eight sectors, including autonomous manufacturing, small and medium-sized manufacturing, agriculture, construction, logistics, ports, care services and national defense.

Ministry of Planning and Budget Minister Park Hong-keun delivers opening remarks at the second Fiscal Management Strategy Council meeting held Thursday morning at the Korea Deposit Insurance Corporation conference hall in Jung-gu, Seoul. [Ministry of Planning and Budget]

The Ministry of Planning and Budget convened the second Fiscal Management Strategy Council on Thursday at the Korea Deposit Insurance Corporation in Seoul, chaired by Minister Park Hong-keun, and confirmed plans for fiscal investment in humanoid robot ecosystem development and physical AI deployment across eight key sectors.

The meeting was held ahead of next year's budget proposal announcement, with the aim of discussing investment strategies for the country to establish an irreplaceable industrial edge. Thirteen private-sector council members attended alongside vice ministers from related ministries, including the Ministry of Science and ICT, the Ministry of Agriculture, Food and Rural Affairs, the Ministry of Trade, Industry and Energy, the Ministry of Health and Welfare, and the Ministry of SMEs and Startups.

Under the investment plan, the humanoid robot sector will receive 600 billion won next year, with total fiscal investment reaching 2.3 trillion won by 2030. Including private-sector matching investment, the total is expected to reach approximately 2.7 trillion won. Policy finance will also support private investment alongside direct fiscal spending. Through the National Growth Fund, 16 trillion won will be channeled this year into physical AI sectors including AI, robots, semiconductors and batteries.

The first priority is developing finished products for use in actual industrial settings and building an initial market. Some 148.2 billion won will be invested next year — and 500 billion won through 2030 — to develop humanoid robots tailored to 10 industries: displays, aviation, logistics, retail, shipbuilding, automobiles, home appliances, chemicals, hospitals and hotels. Demand companies and robot manufacturers will jointly develop products, validate them in manufacturing and service environments, and begin mass production from 2030.

Robot demand that large conglomerates cannot absorb on their own will be distributed among domestic small and medium-sized robot companies. For example, welding, painting, grinding, cleaning and inspection robots needed for shipbuilding would be developed jointly by large companies and promising smaller firms. Large companies will provide testing sites and data, then purchase and use the finished products directly.

A humanoid robot demonstrates parcel sorting at the 2026 Smart Tech Korea exhibition held at COEX in Gangnam-gu, Seoul, in June. [Yonhap]

The government will also act as an early buyer. It plans to purchase 250 domestic humanoid robots next year and distribute them to universities and state-run research institutes, expanding purchases to 1,080 units by 2030. Public procurement of AI robots — including non-humanoid types such as quadruped robots — is expected to grow from about 1,700 units next year to about 5,000 by 2030.

The government will also accelerate domestic production of key components needed to support finished products. Some 153 billion won has been allocated next year — and 500 billion won through 2030 — for development of three core components (actuators, robotic hands and sensors) as well as AI semiconductors and all-solid-state batteries. The goal is to raise the domestic parts localization rate from the current 45 percent to 80 percent by 2030.

As part of this effort, the government will pursue development of low-power, high-performance AI semiconductors and all-solid-state batteries specifically designed for humanoid robots. The AI semiconductor target is a chip capable of performing more than 400 trillion operations per second on 30 watts or less of power.

Alongside hardware, the government will work to secure domestically developed software — the "brain" of the robot. The related budget is 82 billion won next year and 400 billion won through 2030.

The Ministry of Science and ICT will develop a general-purpose physical AI foundation model capable of autonomous planning, long-duration tasks and precision manipulation, which will then be specialized by sector. The Ministry of Trade, Industry and Energy will develop a lightweight robot foundation model for site-specific tasks, expand it into industry-specialized applications, and eventually evolve it into a general-purpose model. A domestic operating system linking the robot's brain, body and semiconductors is to be completed by 2031.

The government will also build a data infrastructure for robot training. A total of 700 billion won — including 171.6 billion won next year — will be spent through 2030 to create a pan-government data library consolidating manufacturing and physical AI data currently scattered across ministries and sectors. Data secured through government projects will be accumulated and made available for domestic AI and robot companies to train and refine their models. Training approximately 20,000 specialists in manufacturing AI transformation and physical AI will receive 54.8 billion won next year and 200 billion won through 2030.

Real-world deployment of developed technologies in industrial and public settings will proceed in parallel. The eight sectors — autonomous manufacturing, small and medium-sized manufacturing, agriculture, construction, logistics, ports, care services and national defense — will receive 700 billion won next year and 2.8 trillion won through 2030. Including private-sector and local government matching investment, the total is expected to reach around 4 trillion won by 2030.

During the deployment phase, domestically developed AI models and world models from the Ministry of Science and ICT, the Ministry of Trade, Industry and Energy and others will be applied to ministry-level projects. The government will require the use of domestic physical AI technology to prevent deployment projects from becoming test beds for foreign platforms. Products and models whose performance and safety are verified in the field will be linked to follow-on programs covering distribution, procurement and certification, and data generated during deployment will be used to advance domestic physical AI technology.

The government also confirmed plans Thursday to foster innovative companies in new growth sectors and to streamline small and medium-sized enterprise support programs across all ministries.

In four new growth sectors — new security, pharmaceutical biotech, climate tech and K-consumer goods — the government will identify 300 innovative companies and provide bundled support covering commercialization, financing, exports, talent and research and development, tailored to each company's growth strategy. Companies will receive initial support for two years; those that meet targets set with a growth director will receive an additional three years, for a maximum of five years and up to 10 billion won plus additional benefits per company.

Sector-specific measures to remove bottlenecks will also be introduced. In the new security sector, a Korean version of In-Q-Tel — modeled on the CIA's venture investment arm — will be established to allow the government to invest directly in companies with critical technologies and to provide military facilities and defense data as testing grounds. A dedicated fund of 600 billion won will be created for the climate tech sector. In the K-consumer goods sector, K-beauty clusters will be built in areas frequented by foreign tourists.

Existing SME support programs will be restructured. A review of 472 programs worth 25.5 trillion won across 17 ministries found that 232 programs require reorganization. Of these, 88 will be consolidated or abolished and 144 will have their budgets reduced, cutting approximately 4 trillion won from next year's budget proposal. The savings break down as follows: 2.4 trillion won from eliminating overlapping and duplicative programs, 400 billion won from consolidating small-scale programs and reforming piecemeal support, and 1.3 trillion won from cutting low-performing and routine programs.

The 4 trillion won saved from SME budgets will be reinvested in high-performing programs and new landmark projects, shifting the support framework toward growth promotion and results. A representative example is the allocation of 310.3 billion won next year to foster innovative companies in new growth sectors. Selection criteria will reflect growth potential, and regional companies will receive preferential treatment through higher allocated budgets, support limits and ratios.

y2k@heraldcorp.com