SEOUL, SOUTH KOREA / MENA Newswire / — South Korea has launched a 1.115 trillion won, or about US$665.5 million, Industrial Growth Fund to expand financing for manufacturing innovation, artificial intelligence adoption and technology commercialization across key industries. The fund was introduced on May 18 at an industrial finance strategy meeting in Seoul and is structured around anchor commitments from R&D dedicated banks, with a focus on small and midsize companies pursuing industrial technology, advanced manufacturing and new market entry.
The Ministry of Trade, Industry and Resources said the fund replaces and expands the earlier Industrial Technology Innovation Fund framework, shifting its role from R&D focused support toward broader industrial policy financing. Its stated investment priorities include the M.AX manufacturing AI transformation initiative, balanced regional development and the identification of new growth engines. The fund is designed as a policy linked private vehicle that channels bank anchor investments into companies developing or commercializing advanced industrial technologies.
Hana Bank committed 620 billion won and the Industrial Bank of Korea committed 495 billion won, bringing total anchor funding to 1.115 trillion won. The amount is the largest stated anchor commitment in the program’s history. Authorities said the structure also allows additional private matching capital and joint investments from demand side companies, widening the financing base for companies involved in industrial transformation, manufacturing automation and applied AI technologies.
Manufacturing AI fund begins
The first sub fund under the program is the M.AX Industrial Transformation Innovation Fund, which targets companies combining manufacturing with artificial intelligence. Eligible areas include humanoid robots, AI factories, future mobility and autonomous ships. The M.AX fund begins with 100 billion won in anchor investment from dedicated banks and is intended to reach up to 500 billion won through matching capital. Selection of fund managers is scheduled for June 2026.
The program also includes follow on funds tied to regional industrial activity and sector specific ecosystems. These vehicles are linked to South Korea’s policy focus on regional economic balance, including support for five super regional zones and three special self governing provinces. The financing framework is intended to support industrial supply chains beyond early research by directing capital into scale up, commercialization, production capacity and market entry for companies with verified technology development outcomes.
Financing package supports R&D firms
Alongside the investment fund, a separate financing package is being prepared for companies that have completed government backed R&D projects and are moving into commercialization or export activity. The support combines guarantees, insurance and low interest loans. Public finance institutions are expected to supply about 700 billion won in guarantees and insurance over three years, while participating banks are contributing 47 billion won for preferential lending linked to qualified innovation companies.
The launch forms part of South Korea’s wider manufacturing AI transformation agenda, which seeks to apply artificial intelligence across production, robotics, mobility, shipbuilding and industrial operations. The M.AX initiative has been positioned as a vehicle for connecting capital with companies developing AI enabled manufacturing systems and related hardware. The May 18 fund launch places manufacturing AI at the center of the first investment phase while also retaining funding tracks for regional industries and emerging industrial sectors.