The Korea Institute of Machinery and Materials (President Park Sang-jin, hereinafter referred to as KIMM), under the Ministry of Science and ICT, predicted that the domestic machinery industry will continue its growth trend from 2021 in 2022.


The Korea Institute of Machinery and Materials recently announced Machinery Technology Policy No. 106, "Machine Industry Performance in 2021 and Outlook for 2022."

According to this, the domestic machinery industry's production volume in 2022 is projected to reach KRW 110 trillion, a 2% increase from the previous year's KRW 108 trillion. This forecast takes into account increased demand driven by the ongoing economic recovery, the gradual resolution of global supply chain issues, and the robust performance of downstream industries such as semiconductors.

The Korean machinery industry is expected to continue its growth in 2022, following the positive outlook for the 2022 market from the fourth quarter of last year's manufacturing PMI, and the continued economic recovery fueled by the widespread availability of COVID-19 vaccines and treatments.

However, growth is expected to be limited due to uncertainty stemming from the spread of COVID-19 virus variants and geopolitical risks.

In particular, attention is focused on whether the machinery industry will continue its growth this year as government policies such as digital transformation, carbon neutrality, and housing stability are applied to the industry. Semiconductor equipment has continued to show strong growth, and is expected to drive growth in the machinery industry this year as well.

By industry, semiconductor equipment is expected to maintain the previous year's growth, driven by the continued boom in upstream industries. Machine tools and construction equipment, which delivered notable performance in 2021, are also expected to continue their growth, but to a limited extent.

Major institutions projected that semiconductor equipment sales would grow 11.2-22% in 2022, fueled by steady investment from global chipmakers. The research team noted that while the effects of supply chain diversification in Middle Eastern countries, including Israel, are beginning to show, a strategic approach to technological security is necessary to address growing demand from upstream industries and semiconductor alliances among neighboring countries.

The display equipment sector is analyzed as needing policies to strengthen industrial competitiveness. The decline in exports and large-scale facility investment is attributed to the sluggish downstream industries caused by COVID-19 and the delay in the equipment industry restructuring to focus on OLED.

The plant and construction equipment sectors are expected to remain stable. While the plant sector faces a prolonged shortage of large-scale project orders, LNG demand and liquefaction plant orders are expected to increase. The construction equipment sector is expected to see modest growth, driven by exports, driven by increased infrastructure investment to stimulate the economy and the resumption of delayed projects.

The machine tool industry grew by at least 30% across all major demand sectors in 2021, with both domestic sales and exports rising by a significant margin of approximately 60%. Both production and exports are expected to increase thanks to the global economic recovery, but growth is expected to be limited due to uncertainties in the Chinese economy and the previous year's strong performance.

By region, the metropolitan area was the only region where the production index stagnated, but exports increased along with the Chungcheong region, centered on semiconductor equipment, while the southeastern region only saw a slight rebound due to a sluggish performance in the automobile industry, its main industry.

Kim Hee-tae, a senior researcher at the Korea Institute of Machinery and Materials' Machinery Technology Policy Center, said, "The machinery industry is expected to grow slightly in 2022, driven by increased demand from upstream industries and the resolution of supply chain issues." He added, "However, to avoid losing leadership in the display equipment industry, a swift industrial restructuring centered on OLED is necessary."

Meanwhile, the Korea Institute of Machinery and Materials (KIMM) aims to contribute to national policy and academic development by providing rational direction for machinery industry policies and consolidating policy capabilities. Starting this year, the journal will be published in conjunction with its policy journal. The inaugural issue of Machinery Technology Policy will feature policy research in the machinery industry and technology sectors, and manuscripts will be accepted until April 30th.