IKHAN DO | CEO OF HYUNDAI MOVEX
Over the past decade the Korean domestic market has become increasingly competitive and saturated across many industries, including automation. This environment has pushed many suppliers to expand globally. Industry observers say that Korean suppliers have unique competitive advantages when going global including strong IT-based automation capabilities and a "pali-pali," fast-execution culture that enables quick adaptation to industrial changes. At the same time, we're also seeing a major reconfiguration of global supply chains. Geopolitical tensions between the West and China are limiting access for certain vendors and opening opportunities for new players to step in. So my first question is: Do you agree that now is a particularly compelling moment for Korean automation suppliers like yours to expand internationally? And if so, why?
I absolutely agree that this is the right moment for Korean companies to expand into global markets. Since the pandemic, global supply chains have been restructured, and this shift has created a major opportunity.
Today, entering into foreign markets is more than just a strategic choice; it is essential for ensuring speed, reliability, and resilience. In automotive industries, for example, manufacturers can only operate smoothly if their supply chains for critical components like tires and batteries remain stable.
After the pandemic, many Western companies have become much more cautious about their dependence on Chinese suppliers. Cost is no longer the sole consideration; reliability and trust have become top priorities. In this context, Korean SMEs with proven capabilities now have a rare window to enter new markets.
We see this trend particularly in the United States. Over the past few decades, Korean companies have significantly increased their direct investment there. As they build new factories, they seek to replicate overseas the same systems they have already validated in Korea. This creates a strong demand for equipment and systems that have been thoroughly tested, verified, and localized in Korea.
By conducting R&D, testing, and pilot runs in Korea, we can ensure uncompromising reliability and quality. Once these systems are validated, we can deliver them overseas with significantly shorter lead times. This environment allows companies like ours to leverage domestically developed technologies and apply them globally faster than ever before.
If we look at the post-pandemic era, the logistics automation sector seems to be one of the big winners. Over the last three years, the industry has grown by roughly 10–15% annually, driven by several macro trends: the rise of new automated industries such as EVs and batteries; demographic changes and labor shortages in countries like the U.S., Korea, and Japan; and political developments, such as Korea's recent Yellow Envelope Act, which is pushing CEOs to consider automation for labor stability and safety. Looking ahead to the next three to five years, how do you expect the logistics automation industry to evolve? Do you think this growth will continue, slow down, or accelerate?
I am confident that this growth will continue and that the industry will maintain its strong momentum. As you noted, Supply Chain Management (SCM) is more critical than ever, and ensuring a reliable and stable flow of goods has been a top-tier strategic priority.
At the same time, manufacturers face a dual challenge of a shrinking skilled workforce and the difficulty of maintaining safe, reliable 24/7 operations. During my recent visit to the U.S., local managers emphasized this reality, stating, "Automation isn't just an upgrade; it's a necessity because we simply cannot find the personnel." Beyond labor shortages, safety regulations and legislative shifts—such as the Yellow Envelope Act—are transforming automation from a strategic option into an absolute operational necessity.
Rapid technological advancement is another decisive factor. AI, robotics, and advanced software are evolving at an extraordinary speed. Technologies that once took years to adopt are now being implemented at a much faster pace. This acceleration ensures that the scope of automation will continue to expand rather than contract.
Considering the combined impact of supply chain pressures, labor shortages, safety concerns, and rapid technological development, I am confident this industry will sustain strong growth over the coming years.
I find your point about technological acceleration fascinating. This morning I was reading about a potential collaboration between NVIDIA and NASA to advance "physical AI" the integration of digital artificial intelligence into physical machines. When I read the article, it immediately reminded me of your robot system installed in Naver's 1784 building the world's first robot-only elevator, seamlessly integrated with the building's entire automation system. This was, in my view, one of the earliest real-world manifestations of physical AI. Looking 20 years ahead, how do you expect automation to evolve? Are we closer than ever to true large-scale physical AI systems?
Thank you for mentioning the Naver 1784 project. The robot-dedicated elevators were indeed a significant milestone. However, I would like to clarify that while these elevators operate autonomously within a broader intelligent system, they do not yet represent what I would define as full 'Physical AI.'
In logistics centers such as Amazon's, certain elements of physical AI have already been incorporated. But applying full physical AI directly into logistics operations is extremely challenging. These systems handle customers' goods, which often include sensitive, high-value, or safety-critical items, so the requirements for reliability, safety, and regulatory compliance are exceptionally strict.
That said, we are continuously exploring ways to integrate physical AI into logistics environments. At this stage, most integration happens indirectly through advances in the underlying software, control systems, and operational algorithms that support our equipment.
For instance, our engineers already utilize AI-driven tools to optimize system performance. These improvements are not always visible- the hardware may look the same- but the intelligence behind it becomes more efficient, stable, and reliable as data and operational experience accumulate.
In the future, physical AI will become more prominent, but it will likely take hold through incremental integration across digital twin systems, equipment operation, vehicle control, and other fundamental layers before transforming into fully autonomous logistics environments.
Since you mentioned end-to-end integration, I'd like to talk about something that stood out during our visit. In this industry, most companies are highly fragmented. Often you see one company doing system integration, another providing AGVs or palletizing robots, another assembling everything on site, and yet another providing maintenance. What impressed us during the tour was that Hyundai Movex integrates all of these steps internally, even developing your own palletizing software and plug-ins. Most companies avoid this because of high cost and the difficulty of acquiring talent in so many specialties. Why did you choose this unique and ambitious end-to-end model?
For us, this approach is not a gamble; it is our core strategic strength. Logistics is fundamentally about flow, volume, and efficiency, and our responsibility is to deliver a fully optimized system. True optimization is impossible, if the process is fragmented.
By engaging with clients from the initial consulting and system engineering stages, we can design the most efficient equipment configuration tailored to their specific needs. While individual components may not be the lowest-priced on the market, the Total Cost of Ownership is optimized because the system is engineered holistically.
This is where our true value lies. Rather than comparing equipment in isolation, one must consider the total cost of ownership, operational efficiency, and reliability. Our end-to-end approach ensures that we deliver superior total value that goes far beyond the hardware itself.
And regarding the second challenge, human resources?
This is one of our greatest strengths. Our workforce is composed primarily of mechanical, electrical, systems, software, and consulting engineers, rather than simple assembly labor.
To provide true end-to-end solutions, seamless synergy between these disciplines is essential. That is why I have never hesitated to invest in people. Human talent is the foundation of our competitiveness.
When our engineers design a logistics automation system, for example, the initial cost may be higher than that of a Chinese supplier, but the system is fully customized to the client's needs/requirements. Mechanical designers, control engineers, and software developers collaborate as a unified team to deliver a solution that optimizes the client's factory operations, maximizes efficiency, and ensures worker safety.
This synergy, driven by integrated intelligence, is exactly what makes our end-to-end value proposition possible.
One benefit of this holistic approach is that you truly understand multiple industries. Many automation companies specialize narrowly. But Hyundai Movex works across food, petrochemical, tires, batteries, and more. You recently won a major ESS battery factory project in the United States. With such diverse verticals, which industries do you see as having the highest growth potential for your services in the future?
While I cannot disclose specific strategic details, I can share our general direction.
Industrially, sectors such as automotive, secondary batteries, tires, and related sectors will remain our core pillars. In commercial sectors, we see significant opportunities in electronics and F&B industries, particularly as these industries aggressively expand their global footprints. Our engineering expertise uniquely positions us to support these clients both at home and abroad.
Regionally, we see substantial global potential. As Korean companies ramp up their U.S. investments, it remains a high-priority market for us. Furthermore, we are targeting regions facing acute labor shortages, as well as fast-growing developing economies where the demand for industrial automation is surging.
We also see promising growth in ESS packaging and other segments of the battery ecosystem. Because we specialize in end-to-end engineering, we can flexibly expand into these adjacent fields as demand evolves.
Beyond automation, Hyundai Movex operates two other business segments sliding doors and IT consulting. Your sliding door division has already won international bids, including Sydney Metro in 2023 and again this year. Could you explain the synergies between your three business areas?
When I engage with stakeholders at Sydney Metro, I never introduce us simply as a PSD (Platform Screen Door) supplier. Instead, I present Hyundai Movex as an end-to-end solutions partner.
While providing stable PSD systems is essential, our true value lies in our shared engineering expertise that spans logistics automation, PSDs, and elevators. For instance, when a client consults with us a on a new airport project, we can offer integrated solutions: automation systems paired with PSDs, all built upon the same robust engineering foundation.
The IT consulting division also drives this natural synergy. Many of our software engineers work across logistics control systems, electronics, and broader IT services. This shared technical foundation not only enhances our competitiveness but also enables us to deliver comprehensive offerings across all three business areas.
I'd like to ask about Hyundai Movex's role within the broader Hyundai Group. Hyundai Group's Chairperson Hyun Jeong-eun has often emphasized a technology-driven strategy, AI, automation, and digital transformation, as key to the group's recent success. How do you see Hyundai Movex evolving within the Hyundai ecosystem in the coming years?
Hyundai Movex has grown thanks to a strong focus on technology and customer-centric thinking, values that the Chairperson has consistently emphasized.
Within the group, we are responsible for IT and digital innovation. In many ways, we serve as a technological engine driving the Group's transformation. By collaborating closely with our affiliates in elevators, PSDs, and logistics, we generate powerful synergies across the entire Hyundai ecosystem.
My responsibility is to contribute meaningfully to the group's overall growth, and I remain deeply committed to advancing our collective technological capabilities and global competitiveness.
Let's discuss your global expansion strategy. You currently have a presence in Europe through Hungary, as well as in China and the United States. However, when competing for large overseas projects, you face major multinationals with extensive global networks, and also agile startups that respond quickly to niche needs. From a global standpoint, how does Hyundai Movex compete as an end-to-end service provider in markets like Korea, Japan, the U.S., or North Africa?
Competing internationally is certainly not easy, but technological differentiation remains the most decisive factor.
While there are large first-tier players with global networks and highly cost-competitive Chinese companies, our competitive advantage lies in the combination of advanced technology and exceptional after-sales service. This is precisely what clients prioritize when operating critical logistics systems.
For me, true global presence is not just about entering a country; it is about sustaining service there. That is why I always view global expansion and service networks as inseparable. A customer must be confident that our support continues long after installation. That confidence allows us to compete effectively even against much larger players.
That makes sense. From a portfolio standpoint, diversification is essential. When I interviewed SFA Engineering last year, their heavy dependence on a single major aerospace project created a $400 million financial shock when the contract was canceled. In your industry, the ticket sizes are large and cyclicality is unavoidable. How do you ensure Hyundai Movex remains resilient against such risks, whether economic or non-economic?
In my view, the real risk is not what we already know, but rather the unknowns that have yet to surface. That is why thorough preparation is non-negotiable.
Executing projects abroad is far more complex than operating in Korea due to differing conditions and higher levels of uncertainties. To mitigate this, we strictly follow a diversification strategy, avoiding over-concentration in any single region or sector.
Beyond individual projects, we have built stable, recurring revenue streams that strengthen our financial foundation. While large-scale projects can be volatile, this recurring business acts as a vital counterbalance. By combining deep customer insights with meticulous localization, we strategically balance high-growth opportunities with dependable revenue to minimize our overall risk profile."
This year marks Hyundai Movex's seventh anniversary. If we were to conduct this interview again in three years, on the company's tenth anniversary, what goals or vision would you hope to have achieved by then?
There are many goals, but the most important is to transform Hyundai Movex from a Korean domestic player into a truly global enterprise.
Three years from now, when we meet again, I hope you will see us not just as a mid-sized company, but as one that has matured into a formidable global player. That is my primary aspiration.
Thank you very much for visiting us today. I truly enjoyed our discussion, and I appreciate the opportunity to share these insights. We are still growing, but we are moving quickly and have immense potential, especially thanks to our young and ambitious teams.