Asia leads the AI ​​revolution in the factories of the future

A new industrial revolution is underway in Asia. China and South Korea are implementing artificial intelligence in manufacturing on an unprecedented scale, with fully automated "dark factories" and robots redefining global production.

East Asia, led by China and South Korea, has become the epicenter of a radical transformation in the global manufacturing sector: the massive adoption of Artificial Intelligence (AI). This technological commitment not only seeks to optimize production but also responds to major strategic imperatives, from geopolitical competition to the urgency of overcoming demographic crises.

China, already established as the "world's factory," is determined to maintain its industrial hegemony through an aggressive implementation of AI. The goal is clear: to transition from "Made in China" to "Smartly Made in China" (中国智造).

* Dark Factories and Record Production: A prime example is tech giant Xiaomi, which operates fully automated "dark factories" (暗黑工厂) using AI, Big Data, and the Internet of Things. These facilities are capable of producing one smartphone per second, surpassing the capacity of rivals like Apple and drastically reducing labor and energy costs.

* Leadership in Multiple Sectors: Xiaomi's success is not an isolated case. BYD has managed to surpass Tesla in the production and sale of electric vehicles, and Baidu has surpassed Waymo in autonomous driving technology in terms of price.

* National Scale: By February 2025, China had already built 30,000 smart factories, of which 1,200 are considered advanced level and 230 are considered excellent level.

This offensive responds to President Xi Jinping's strategic vision: to transform China into a global technological superpower, surpassing the United States, and to curb the offshoring of manufacturing to countries with lower labor costs. The "AI Plus" initiative and massive public investment, including an $8.2 billion AI fund, support this ambition.

Following closely in China's footsteps, South Korea, another manufacturing powerhouse, is also rapidly adopting AI in its factories.

* Dream Factories and Tech Giants: LG Innotek, a subsidiary of conglomerate LG, unveiled its Dream Factory (드림 팩토리) in Gumi Province in April 2025, an AI-powered manufacturing center that operates without direct human intervention, reducing costs and increasing efficiency. Giants such as Samsung, SK Hynix, and Hyundai are also deploying AI to maintain their global leadership in semiconductors and automobiles.

* Strategic Response: For South Korea, AI adoption is a response to competitive pressure from China and, crucially, to its severe demographic crisis: the country has the lowest birth rate in the world and a sharply declining working-age population. AI is seen as a solution to the looming labor shortage.

* National Ambition: The country aims to become one of the "global top three AI powers." The government has pledged $7.5 billion to accelerate the integration of AI into manufacturing.

This race for intelligent automation could consolidate East Asia's manufacturing advantage, despite Western efforts to reshore or friend-shore production. Productivity increases and cost reductions resulting from AI could make Chinese and South Korean manufacturing even more globally competitive. However, this rapid transformation also poses profound domestic social challenges, such as labor reskilling and potential job losses.

«Xiaomi operates fully automated 'dark factories' powered by AI, capable of producing one smartphone per second, surpassing Apple's output.» – Based on.

Alongside the AI ​​revolution in manufacturing, the "chip wars" between the United States and China remain a hotspot with profound implications for Asia. Through initiatives such as the CHIPS Act, the United States is actively seeking to reconfigure global semiconductor supply chains, bringing production back to its homeland and reducing dependence on Asia. This has triggered a wave of multi-billion-dollar investments by giants such as Intel, TSMC (Taiwan), Micron, and Amkor, exceeding $540 billion in announced investments.

Countries like Taiwan and South Korea, semiconductor manufacturing powerhouses, and assembly centers like Malaysia, find themselves in a delicate position, pressured by US restrictions and Chinese ambitions for technological self-sufficiency. China, through its "Made in China 2025" (MIC25) plan, has managed to reduce some import dependence on memory chips, but remains behind in cutting-edge semiconductors. This struggle for control of a technology essential to almost all modern industries could lead to a bifurcation of technological standards and a fragmentation of the global market, with rising costs and a potential slowdown in innovation.

An example of the difficulties in this sector is Alibaba's recent report, in which revenue from its cloud division—key to its AI plans—fell short of estimates, contributing to the decline in its shares. This underscores that, despite the enormous potential, monetizing AI and cloud services remains a challenge, even for the major players.

| Country | Key Companies | Notable Initiatives/Factories | Key Strategic Objectives | Key Challenges/Dependencies |

|—|—|—|—|—|

| China | Xiaomi, BYD, Baidu, Huawei | 30,000 smart factories, Xiaomi's "Dark Factories" | Overtaking the US in high-tech, curbing offshoring, "Smartly Made in China" | Self-sufficiency in cutting-edge semiconductors |

| South Korea | LG Innotek, Samsung, SK Hynix, Hyundai | LG Innotek's "Dream Factory," AI deployment in conglomerates | Maintaining global industrial leadership, becoming an AI powerhouse, overcoming demographic crisis | Competition from China, securing AI talent, chip supply chain |

The technological revolution in Asia, driven by AI in manufacturing and fierce competition for semiconductors, is redrawing the economic and industrial map of the 21st century. Nations that lead this transformation will not only ensure their prosperity but also exert a decisive influence on the global future.