Korean giant enters smart factory market with multi-$bn target
18 July 2024 
The Korean electronics giant LG has entered the smart factory market, offering the expertise that it has gained during 66 years of manufacturing to external customers. It is aiming to grow the business into a “multi-trillion” South Korean won (KRW) enterprise by 2030, excluding revenues it generates internally in the LG Group. One trillion KRW is currently worth $723bn.
Although the business is still in its first year, LG’s Production Engineering Research Institute (PRI) expects to win smart factory orders worth around KRW 200bn ($144bn) from external clients (although it does not give a timescale for this). Its existing customers include battery-makers, automotive parts manufacturers and logistics companies. LG plans to expand into fast-growing sectors such as semiconductors, pharmaceuticals, biotechnology, and food and beverage.
The company aims to cover the entire journey from factory planning to design, construction and operation. It will diagnose existing factories and identify areas for improvement, establishing an automation roadmap and offering services such as production consulting, equipment development and training.
“We will offer optimal smart factory solutions at every stage – from planning and design to construction and operation – becoming the ideal partner that supports our clients throughout their entire production journey,” says PRI head, Jeong Dae-hwa.
The new business will draw on LG’s experience at more than 60 production facilities around the world. It has filed more than 1,000 patents relating to smart factory technologies and in the past decade has amassed 770TB of manufacturing and production data.
LG’s intelligent autonomous factories in Changwon, South Korea, and Tennessee, USA, have been recognised by the World Economic Forum as “Lighthouse Factories”. By implementing smart factory systems at the Changwon plant, LG has boosted productivity by 17%, energy efficiency by 30%, and cut quality costs caused by defects by 70%.
LG’s smart factory systems are designed to minimise delays or errors between processes. Because production efficiency is linked to profitability, enhancing it is crucial. For example, one of LG’s lines in Changwon produces a refrigerator every 13 seconds. A 10-minute delay on the line would result in a shortfall of 50 refrigerators. With each fridge costing around $1,446, this 10-minute delay would cause a loss of $72,322.
Smart factory technologies that LG has developed include:
- Digital twin real-time simulations that create virtual replicas of a factory before it is built, allowing customers to preview production and logistics flows, and to optimise factory efficiencies. When the plant is operating, the twin can analyse real-time data to detect bottlenecks, defects and malfunctions, thus helping to boost productivity.
- AMRs (autonomous mobile robots) equipped with cameras, radar and LiDar sensors to recognise their surroundings and to avoid workers and obstacles while moving around a plant autonomously.
- A mobile manipulator which combines a multi-joint robot arm with an AMR, and can perform operations such as assembly, defect inspection and transporting parts and materials.
- Generative AI systems that use sensors installed throughout a factory to detect abnormal signals such as vibrations and noise caused by ageing equipment or poor lubrication. Big data is used to determine the causes and recommend corrective actions.
- A real-time detection system powered by Vision AI that learns s factory’s normal operating conditions and detects anomalies such as temperature fluctuations and defects. It also enhances safety by identifying workers who are not wearing safety helmets or work vests.
According to Precedence Research, the global market for smart factories that LG is targeting will expand from $155.61bn this year to $268.46bn by 2030.
