Korea's Industrial Digital Transformation Promotion Act, amended on December 30, 2025, took effect on July 1, 2026 under a new name: the Act on the Promotion of Industrial Digital Transformation and Artificial Intelligence Utilization. Through September and October, news outlets reported the first companies designated as "M.AX Specialized Enterprises" under the law. If you are an SME planning a manufacturing AI project, it is worth understanding the amendment and the designation system together.
The Law Has a New Name
The amendment (Act No. 21250) adds "AI utilization" to the master plan, the specialized enterprise program, and the lead projects.It was driven by concern that Korean industry uses AI far less than the country's AI technology level would suggest.An Enforcement Decree amendment (Presidential Decree No. 36467, June 30, 2026) added a new article defining the scope of industrial AI utilization.The law belongs to the Ministry of Trade, Industry and Resources. That puts it on a different track from the Ministry of SMEs and Startups' Smart Manufacturing Innovation Act, which underpins the smart factory programs. Before you apply, check which ministry runs the program.The Seven Areas of Industrial AI Use in the Decree
Analyzing the industrial operating environmentAnalyzing, diagnosing, and optimizing production processesAutomating and controlling equipment and systemsQuality control, such as defect identificationMaintenance, such as failure predictionAdvancing R&DIdentifying hazards to prevent accidentsBecause these areas are now written into law, you can cite them in a grant proposal to show your project fits government policy. Here is how typical smart factory projects line up:
Vision AI defect inspection → quality control (4)Vibration- or current-based predictive maintenance → maintenance (5)Worker-proximity safety sensors → hazard identification (7)Automatic equipment parameter tuning → process optimization and control (2, 3)What Is an M.AX Specialized Enterprise?
A company that develops and supplies AI technology, solutions, and data equipment for manufacturing AI transformation, and helps manufacturers adopt and use AI. Designations are made by the Ministry and the Korea Evaluation Institute of Industrial Technology (KEIT).Companies are evaluated on technical capability and expertise, their supply record and reputation with manufacturers, and growth potential. According to press reports, reviewers also look at how far solutions have been applied on the shop floor, data governance, specialist staff, AI track record, and commercialization capability.A designation lasts two years (through August 2028). It comes with more chances to join government projects, plus linked promotion, financing, and consulting support.No official total for the first round has been confirmed. So far there are only reports about individual companies, so confirm any specific company's status with the company itself or with KEIT.How It Differs from the MSS "Smart Manufacturing Technology Specialized Enterprise"
Ministry: M.AX is run by MOTIR and KEIT. The smart manufacturing designation is run by the Ministry of SMEs and Startups.Legal basis: the Industrial Digital Transformation and AI Utilization Act versus the Smart Manufacturing Innovation ActPurpose: recognizing manufacturing AI supply capability versus building up smart manufacturing suppliersMSS also runs a two-track supplier capability assessment: an integrated assessment and a separate assessment of manufacturing AI development capability. A supplier that holds all three signals has had its capability checked by several institutions.Still, no designation guarantees a fit with your process. Ask for references from comparable production lines.For Adopting Manufacturers: Choosing Suppliers and Building Consortia
When you compare quotes, add three items to your checklist: M.AX designation, references from your industry, and data governance (where data is stored, who can access it, and how it is secured).Reports say the 2027 budget proposal sharply increases funding for manufacturing AI, including M.AX and the manufacturing AI mega-projects. MOTIR-track projects are often carried out by consortia with suppliers, so it helps to line up partners early.Settle data ownership and usage rights in the contract up front. In particular, spell out whether the supplier may use your factory data to train models for other customers, and who owns the data and models after the project ends.For Suppliers: Preparing for the Next Round
Document your field results with quantitative metrics such as defect rate, uptime, and lead time. For example, show before-and-after figures like a defect rate falling from 3.2% to 1.1%, backed by customer confirmation letters.Put your data governance and security policies in writing. Press reports say KTL helps companies obtain international certifications for industrial AI, which can serve as external validation.The next call for designations has not been scheduled, so keep an eye on MOTIR and KEIT announcements.How KITIM Can Help
KITIM identifies which MOTIR or MSS manufacturing AI track suits your company, builds supplier evaluation sheets, and designs grant proposals around the statutory scope of industrial AI use. If you are preparing to adopt manufacturing AI or to seek a specialized enterprise designation, please contact KITIM through our consultation request page.
