If European corporations had dominated the machine tool market with precision technology accumulated for more than 100 years, the very game board is now being shaken by the AI shift. Korea's machine tool industry is transitioning to AI faster than competitor nations, and a Critical opportunity has arrived to upend the global market.
Kim Won-jong, head of the Korea Machine Tool Manufacturers' Association and CEO of DN Solutions, held his first press briefing at SIMTOS 2026, the country's largest production and manufacturing technology exhibition, at KINTEX in Ilsan, Gyeonggi Province, on the 13th and said this. As demand dynamics for machine tools shift rapidly with the expansion of advanced industries, his assessment is that the center of gravity in global competition is also moving from hardware precision to software, such as embedding AI technology.
◇ The "mother machine" becomes a national strategic asset
Machine tools are the backbone of manufacturing that cuts and finishes metal parts into finished goods. They are essential across a wide range of industries, including automobiles, which account for about 30% of total demand, as well as semiconductors and other IT devices, aerospace, defense, and medical devices.
Kim said, "Whether making semiconductors or automobiles, without ultra-precision machine tools, the manufacturing line stops immediately," explaining that machine tool technology determines the price bargaining power that underpins the global manufacturing cost competitiveness of national flagship industries, as well as the technological independence that lowers reliance on foreign equipment.
Korea is the world's No. 6 producer and No. 7 consumer of machine tools. In an industrial structure where manufacturing accounts for about 25% of GDP, machine tool competitiveness is directly linked to national manufacturing capacity. Only a handful of countries, such as the United States, Japan, Germany, and Taiwan, maintain this level of balance in both production and consumption.
Even China, with its massive output of general-purpose equipment, has not broken into the top 10 global machine tool corporations. That is because ultra-precision machining technology, which is difficult to realize without decades of know-how, acts as a barrier to entry. For the same reason, core models in this domain, such as five-axis multi-tasking machines, are designated as national core technologies. Kim said, "Korea's defense sector, which is drawing global attention, is also in a symbiotic growth structure in which, as exports of finished goods increase, the machine tool industry that processes them grows together."
◇ "Processing demand explosion" triggered by AI data centers and Humanoid Robots
Recently, the global machine tool market has entered an unprecedented structural boom due to the expansion of AI infrastructure. In the worldwide machine tool market, which totaled about $83.4 billion (about 124 trillion won) last year, new demand sources are absorbing advanced machining equipment.
AI data centers and the Humanoid Robot sector have emerged as new revenue streams for the machine tool industry. That is because components ranging from data center cooling systems to actuators, which consist of joints for humanoids and more than 50 ultra-precision parts, all must be machined with high-precision machine tools.
Advances in the aerospace industry are also spurring demand for high-spec equipment. Kim said, "To machine hard-to-cut materials such as carbon-fiber-reinforced plastics or titanium into a 6–7-meter wing rib in one go for aircraft weight reduction, you need to run a massive machine continuously for more than 48 hours," adding, "By actively using AI to control, without error, ultra-precision and high-spec machining processes of an entirely different order than in the past, the machine tool industry is evolving beyond simple conventional machining into a whole new level of advanced technology."
◇ The "software" to break a century-old stronghold… Korea narrows the technology gap
Industry watchers see the AI-driven industrial reshuffle as a chance for domestic machine tool corporations to expand their global footprint.
In the past, the global machine tool market was dominated by European and Japanese corporations that led with hardware precision technology accumulated over more than 100 years. However, Kim said, "Digital and AI are a completely different world," adding, "In the past, competitiveness was entirely about how precisely the machine could cut, but now the key is the ability of AI to assess and control the entire process in real time." He said, "Korean corporations, which are highly receptive to software, are moving faster than competitors in this transition," evaluating it as "a time when the gap narrowed in hardware can be reversed in software."
To seize this opportunity, domestic machine tool companies are working to scale up through aggressive mergers and acquisitions (M&A) alongside embedding AI technology. DN Solutions, the No. 1 player in Korea, acquired German machine tool powerhouse Heller, with 132 years of history, in January, strengthening its high-end equipment lineup.
SMEC, together with a private equity fund, acquired WIA Machine Tools in July last year and has been expanding into energy and mobility by adding electric vehicle battery inspection automation facilities to its existing machine tool capabilities. WIA Machine Tools, spun off from Hyundai WIA as a separate corporation, is pushing into external markets by putting forward an autonomous manufacturing platform that links machine tools with automated guided vehicles (AGVs).
Still, there are hurdles to clear. The Korea Institute of Machinery & Materials (KIMM) forecast that this year the machine tool industry's production and exports will both decline by 3%–5% due to global demand slowdown and U.S. tariff risks. Chronic shortages of skilled workers and breaks in technology transfer are also structural challenges facing the industry.
Kim said, "As corporations continue to invest in new technology development, nationwide support is needed to provide government-level early test beds and to ensure that top talent can be supplied smoothly to regional hubs with dense industrial bases, such as Changwon."