Physical AI is gaining traction among Korean manufacturers but successful deployment remains a challenge.
An August 2026 survey by the Korea Employers Federation found that 84% of 100 surveyed manufacturers had adopted or planned to adopt Physical AI. Only 47% had introduced the technology through pilot or commercial projects.
This gap raises an important question for businesses. How can companies evaluate the feasibility and commercial value of Physical AI before committing to large-scale investments?
On October 28, Arches hosted Eungjoon Yoo for a webinar on AI market developments and Physical AI adoption. Mr. Yoo previously led NVIDIA Korea’s enterprise business for seven years. He also held leadership positions at HP and Oracle. He currently advises companies on AI adoption as CEO of Joon AI Consulting.
For Korean businesses, Mr. Yoo’s discussion highlighted two priorities for evaluating Physical AI investments: infrastructure readiness and the commercial value of industrial data.
Understanding Physical AI and its business applications
Physical AI enables machines to perceive their surroundings and perform actions in the real world. Applications include industrial robots and autonomous vehicles.
Unlike generative AI, Physical AI operates in changing physical environments. Its deployment requires reliable systems and effective safety measures.
For manufacturers, Physical AI offers opportunities to improve productivity and automate complex operations. However, commercial viability depends on implementation costs and measurable operational improvements.
The challenges behind Korea’s Physical AI trend
1. Infrastructure constraints can limit AI deployment
South Korea’s AI expansion faces growing pressure from electricity supply and grid capacity according to The Korea Herald. A 2026 KIET report also identifies inadequate infrastructure as a barrier to manufacturing AI adoption.
This reflects a key insight from Eungjoon Yoo’s Arches webinar that computing power alone cannot determine AI scalability. Businesses must also assess energy capacity and operational readiness before committing to large-scale deployment.
2. Industrial data alone does not guarantee competitive advantage
South Korea leads industrial automation with 1,220 robots per 10,000 manufacturing employees according to the International Federation of Robotics. However, advanced automation does not guarantee effective industrial data utilization.
Mr. Yoo highlighted how Korea’s manufacturing base could provide an advantage in Physical AI through real-world industrial data. Companies must evaluate their ability to translate this data into deployable AI applications before making investment decisions.
Evaluating Physical AI investment opportunities
Physical AI deployment practices are changing as manufacturers test new applications. Published market research may not capture recent implementation costs or operational challenges at individual production sites.
A Korea Employers Federation survey identified technical instability as the leading adoption concern at 34.5%. Uncertainty over investment returns followed at 31%.
Corporate and investment teams should examine three questions before making major commitments:
- Which Physical AI applications are delivering measurable business value?
- What technical barriers are limiting deployment at scale?
- How are manufacturers evaluating implementation costs and investment returns?
Interviews with manufacturing operators and AI implementation specialists can help companies assess these risks using firsthand operational evidence.
Arches supports corporate strategy and investment research through expert interviews with experienced industry practitioners.
Our global network includes over 200,000 experts across industries and markets. Clients can access firsthand perspectives through Expert Calls or explore existing interviews in our Expert Transcript Library.
Talk to Arches to identify experts relevant to your Physical AI research and investment decisions.
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