POSCO to Acquire Stake in Korean Robotics Firm for Steel Operations

POSCO Group, a South Korean conglomerate known for its steel and battery materials businesses, has announced an investment in Neuromeka Co., a leading domestic robotics company, to enhance its struggling steel business through factory automation and create new growth opportunities, according to The Korean Economic Daily. Neuromeka, a top manufacturer of collaborative robots in South Korea, revealed on Friday that it would issue 10 billion won ($7.2 million) in convertible bonds to POSCO Holdings Inc., the parent company of POSCO, the world's seventh-largest steelmaker, and POSCO Future M, a producer of electric vehicle battery materials.

As part of the deal, POSCO Holdings will acquire a 3.81% stake in Neuromeka if the bonds are converted into shares of the Kosdaq-listed company. Following the announcement, Neuromeka's share price surged by 7.77%, closing at 26,350 won, the highest level since July 24, outperforming the 2.33% decline in the tech-heavy Kosdaq index.

POSCO plans to collaborate with Neuromeka to develop advanced robots and AI systems aimed at automating its steel manufacturing processes. Neuromeka produces collaborative robots that can work alongside humans without safety barriers, as well as industrial robots used in manufacturing with programmable and automated systems. POSCO aims to integrate these technologies into its steel factories, which are less automated compared to industries like semiconductors and automobiles. While the company has already automated certain processes, such as moving molten iron, it plans to expand automation to other areas.

Faced with rising competition from cheaper Chinese products, POSCO is focusing on reducing costs, particularly labor expenses, through factory automation. The company is also looking to implement "smart factories" by incorporating AI technologies. In response to the competitive pressures, POSCO has recently shut down a wire rod mill and is considering selling its entire stake in a Chinese stainless steel joint venture.

This investment in Neuromeka marks POSCO Holdings' first move since Chang In-hwa became the group's chairman and CEO in March. Chang is expected to drive the company's focus on robotics and factory automation as key growth drivers, following the leadership of his predecessor, Choi Jeong-woo, who transformed POSCO Future M into a battery materials producer. Chang has previously emphasized the goal of creating an "intelligent factory" that combines AI and robotic technology.

POSCO Group is expected to make significant investments in collaboration with Neuromeka to further develop these technologies. In a broader context, other South Korean conglomerates, such as Samsung and LG, have been investing heavily in robotics and AI to expand their presence in the enterprise AI sector, which holds strong growth potential. As part of its restructuring efforts, POSCO's chairman is also focused on selling low-profit, non-core assets to streamline operations across 120 units by 2026.