If European corporations have dominated the machine tool market with precision technology accumulated for more than 100 years, the very ground is now being shaken by the AI transition. Korea's machine tool industry is moving faster on AI than competitor countries, and a Critical opportunity has come to upend the global market.
Kim Won-jong, head of the Korea Machine Tool Manufacturers' Association and CEO of DN Solutions, said this at his first press briefing at SIMTOS 2026, the country's largest production manufacturing technology exhibition, held at KINTEX in Ilsan, Gyeonggi Province, on the 13th. 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, including embedding AI technology.
◇ The "mother machine" becomes a national strategic asset
Machine tools are the backbone of manufacturing, shaving and finishing metal parts into final products. 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 you are making semiconductors or cars, without ultra-precision machine tools the production line stops immediately," explaining that machine tool capability determines the price bargaining power that secures the global manufacturing cost competitiveness of national flagship industries and the technological independence that reduces 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 worldwide, such as the United States, Japan, Germany, and Taiwan, are this balanced on both production and consumption.
Even China, with its massive output of general-purpose equipment, has not broken into the global top 10 machine tool corporations. That is because ultra-precision machining technology—difficult to achieve without decades of know-how—acts as a barrier to entry. Core models in this field, such as 5-axis multitasking machines, are designated as national core technologies for the same reason. Kim said, "In the domestic defense sector, which is drawing global attention, as exports of finished goods increase, the machine tool industry that processes them grows in tandem, forming a structure of mutual growth."
◇ "Exploding processing demand" sparked by AI data centers and Humanoid Robot
The global machine tool market has recently entered an unprecedented structural boom thanks to the expansion of AI infrastructure. In the global machine tool market, estimated at about $83.4 billion (about 124 trillion won) last year, new demand sources are pulling in advanced machining equipment.
AI data centers and the Humanoid Robot sector have also emerged as new revenue sources for the machine tool industry. That is because components ranging from data center cooling systems to actuators—made up of about 50 ultra-precision parts and joints for humanoids—must all be machined with high-precision machine tools.
Advances in the aerospace industry are also stoking demand for high-spec equipment. Kim said, "To machine difficult-to-cut materials like carbon fiber reinforced plastic or titanium into a 6–7-meter wing rib in one go for aircraft weight reduction, you have to run a massive machine continuously for more than 48 hours," adding, "As AI is actively used to control, without error, high-precision, high-spec machining processes of a completely different order than in the past, the machine tool industry is evolving beyond simple legacy machining into a wholly new level of advanced technology."
◇ The weapon to break a 100-year stronghold is "software"… Korea narrows the technology gap
Industry insiders see the AI-driven industrial reshuffle as a chance to expand the global territory of Korea's machine tool corporations.
In the past, the global machine tool market was dominated by European and Japanese corporations that led with precision hardware built up over more than a century. But Kim said, "Digital and AI are a completely different world," adding, "In the past, competitiveness was all about how precisely the machine could cut, but now the key is AI's ability to judge and control the entire process in real time." He said, "Korean corporations, which are highly receptive to software, are moving faster in this transition than competitor countries," assessing that "this is a time when we can overturn the gap narrowed in hardware by winning in software."
To seize this opportunity, domestic machine tool companies are not only embedding AI technology but also moving to scale up through aggressive mergers and acquisitions (M&A). 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 broadening its reach into energy and mobility by adding electric vehicle battery inspection automation systems to its existing machine tool capabilities. Spun off from Hyundai WIA as a separate corporation through a physical division, WIA Machine Tools is pushing into external markets by putting forward an autonomous manufacturing platform that links machine tools with automated guided vehicles (AGVs).
There are, however, hurdles to clear. The Korea Institute of Machinery & Materials (KIMM) forecast this year that the machine tool industry's production and exports would both decline by about 3%–5% due to global demand slowdown and U.S. tariff risks. Chronic shortages of skilled workers and breaks in skills transfer are also structural challenges facing the industry.
Kim said, "As corporations continue to invest in developing new technologies, nationwide support is needed to provide early-stage government testbeds and to ensure a smooth supply of top talent to regional hubs with concentrated industrial bases, such as Changwon."