Silla Engineering Sets Its Sights on the U.S. Market

Recent years have seen a significant improvement in the international perception of the Korean automotive industry, largely driven by domestic conglomerates. However, small and medium-sized enterprises (SMEs) in Korea still seem to lack global brand recognition, especially compared to their counterparts in Japan and Germany. How can Korean SMEs overcome this challenge?
You're absolutely right—compared to large corporations, Korean SMEs face considerable hurdles when it comes to competing in global markets. These challenges stem from limitations in various areas, including access to information, technical resources, global networks, and language or communication skills. Despite these hurdles, I'm encouraged by recent trends. With strong support from KOTRA and other government-backed initiatives, we're seeing a growing number of Korean SMEs actively engaging in international trade.
That said, we all understand that technology is the most critical factor for global success. Without advanced technology, it’s nearly impossible to survive in foreign markets. At Silla Engineering, our engineers have taken the initiative to promote our capabilities directly to overseas clients. This has led to real export success—in fact, at our peak, we recorded over $50 million in annual exports, which at the time was roughly equivalent to KRW 70 billion. Although the pandemic led to border closures and a reduction in global trade volumes, we still retain strong foundations from that era.
However, we're now facing additional headwinds. Protectionism is on the rise. Governments are encouraging domestic production, and tariffs are increasing. These factors are impacting our exports significantly. To overcome this, one strategy is localizing production—setting up manufacturing facilities in target markets. But for SMEs, this is easier said than done. The financial burden of building a local plant is immense, and navigating local labor laws, logistics, and regulatory compliance can be daunting.
While large corporations can often form consortiums and execute “package deals” to ease market entry, it's far more difficult for SMEs to independently break into these markets. In the U.S., for example, Korean exporters are now subject to a 10% base tariff, plus a 5% component tariff, totaling 15%. That level of cost adds an enormous barrier to entry for companies like ours. In this kind of business climate, the agility and flexibility that SMEs typically pride themselves on are not enough. Without scale, it’s increasingly difficult to adapt and compete.
However, it’s important to acknowledge that these challenges can also present opportunities. For mid-sized and large companies, current global uncertainties might serve as a springboard for long-term growth, especially if they invest early and decisively. SMEs, though, need more support, both domestically and internationally, to navigate this transitional period.

You've spoken about the various challenges Korean SMEs face in global markets. However, considering that Silla Engineering's overseas sales reached 58% of total revenue in 2024, do you also see opportunities arising from the current wave of global supply chain restructuring?
Yes, absolutely. It’s important to distinguish between companies that export finished products and those that export intermediate goods. In our experience, finished product exporters are generally less impacted by tariffs and trade restrictions. However, companies like ours that supply intermediate goods are facing increasingly significant risks, especially as tariffs and protectionist measures escalate.
Yet, this same supply chain shift has also opened new doors, particularly for firms with strong technical capabilities and a high degree of competitiveness. What initially appears to be a risk can actually become a compelling opportunity. Yes, the upfront investment is considerable. Expanding into new regions requires capital, time, and strategic commitment. But in the long term, these moves can position SMEs to grow into truly global players.
Korea’s domestic market is inherently limited in size. Unlike larger nations such as China or India, where internal demand can sustain large-scale operations, Korean companies must look outward. Export orientation isn't a choice—it's a necessity for survival and growth. Therefore, while the risks are real, the global supply chain realignment offers a chance for Korean SMEs to scale, differentiate, and succeed on a global stage.
At Silla Engineering, for example, we once exported over $50 million annually, with exports accounting for around 80% of our total business. But when Hyundai and Kia Motors experienced rapid global expansion, they began requesting that we focus more on domestic supply, shifting our balance. Today, even though Hyundai sold over 7.23 million vehicles last year, only about 1.6 million of those were sold in Korea—the rest were exported. That dynamic reinforces the need for companies like ours to return to a more export-driven model, especially by supporting global production bases for clients like Hyundai.

Given rapid changes in the automotive sector, how do you adapt and stay competitive?
The transformation in the automotive industry is truly unprecedented. Tesla may have been a key catalyst, but the broader push toward electrification stems from urgent global concerns—climate change, environmental regulations, and the need to reduce our reliance on fossil fuels. As a result, internal combustion engine (ICE) vehicles are giving way to EVs, hydrogen-powered cars, autonomous vehicles, connected cars, shared cars, UAMs, and beyond.
For the first time in a century, we're seeing diversification in the very definition of what a "car" is. This evolution demands not only mechanical expertise but cutting-edge innovations in software and digital integration. Vehicles are rapidly becoming high-tech, computerized platforms.
From my personal perspective, I also believe we’re heading toward an era of shared mobility. Cars are transitioning from individual possessions to nodes in a digital mobility network. In this future, vehicle manufacturing will require lighter, more efficient materials—composite materials, aluminum, and even titanium will become increasingly common.
From a tooling perspective, this is a major shift. Companies like us must evolve to handle a wider range of materials and rapidly changing vehicle platforms. In fact, I expect our company to grow by 6–7% annually over the coming years, provided we continue to invest in the right technologies and equipment. But this growth depends on staying ahead of new technologies and securing funding for capital investment.
One major trend we’re watching closely is the advent of gigacasting. Tesla pioneered this approach, moving away from assembling multiple components to creating large, single-piece body structures. Hyundai has also adopted this method and recently imported a gigapress from Italy. While this reduces production time and costs, it presents significant challenges for toolmakers.
When die components shift from small, modular pieces to large, single molds, everything must scale—presses, machining equipment, handling systems, even the factory itself. For a company like ours, this raises difficult questions about feasibility and survival. Are we equipped to manage such massive infrastructure changes? It’s a question we’re grappling with seriously.
Moreover, while Tesla produces only a few vehicle models, enabling it to standardize its casting processes, other automakers rely on design variety to appeal to consumers. Gigacasting limits that flexibility. From a tooling standpoint, this means longer lead times and higher costs for each unique design, which could reduce consumer choice in the long run.

Silla Engineering was a pioneer in robotic welding tools and 3D laser systems. What other technologies are you investing in to remain competitive—especially in the context of AI and automation?
Korea, like many advanced nations, faces a significant demographic challenge. The manufacturing workforce is aging, and our birthrate has dropped below 1.0. We're simply not producing enough young workers to sustain traditional labor-intensive manufacturing models.
This is a serious problem not just for us, but for the entire Korean manufacturing sector. Typically, skills in the tooling industry take five to seven years to master. However, we’re seeing fewer and fewer new entrants. Many companies have turned to foreign workers with E-9 visas, but those workers are required to return to their home countries after five years. Because of that, they are rarely trained in advanced tooling techniques, which are difficult to pass down under temporary labor conditions.
To secure the future of our industry, we must pivot toward automation and AI. We are actively developing robotic systems to address critical areas in the die-making process.
For example, the hardness of the surface is a key quality factor in our tools. In the past, this was done manually, resulting in inconsistency. We've now automated this process using laser hardening, which delivers much more uniform results. Another area is the creation of air vent holes. Previously, this was done manually using drilling machines, which led to quality issues and rework. We’ve automated this as well, using robotic precision to improve efficiency and reduce errors.
We’re also investing in AI polishing robots—an extremely advanced project, because the surface finish on die tools requires high craftsmanship. We’re currently developing this system as part of a four-year project. Hardware development is nearly complete, and we expect to begin the first installations in the second half of next year. The software side still needs refinement, but we believe this will eventually be a game-changer. Many companies have hesitated to invest due to the high cost and risk of failure, but we decided to take that leap.
Additionally, we’re developing robotic systems for precision welding and die corrections—essential for fixing overcut or misaligned areas in castings. Once all of these systems are fully deployed, we believe Silla Engineering will be one of the only companies globally capable of delivering fully automated, high-quality die solutions at scale.

Beyond your technical capabilities, Silla Engineering is known for its global client base. Could you share more about your international partnerships and how you build and maintain those relationships, especially in regions like Europe and the U.S.?
Today, we don't just search for clients—clients come looking for us. That shift is a testament to the credibility and recognition Silla Engineering has built globally. That said, we do have capacity constraints. As I mentioned earlier, our export share dropped from 80% to around 60% in recent years, due in part to increased domestic demand from major Korean automakers.
However, over the past two to three years, we've started to refocus on the U.S. market. We previously hadn’t pursued it aggressively, but we now see it as a strategic frontier. We've already begun receiving orders from OEMs like GM, and we expect to start delivering in earnest by the second half of this year. However, unless tariff-related issues are resolved, these opportunities could be offset by losses due to rising export costs.
What’s important to recognize is that overseas business requires more than just technical capability—it demands cultural intelligence. At home, we share the same language and business etiquette. Abroad, however, it's a different story. Language barriers and cultural differences can make even the most basic interactions challenging, especially in early-stage engagements.
Let me share a quick example. Years ago, when we were working with French automakers like Renault and PSA Group (including Citroën), we encountered significant communication gaps—even with local staff who spoke French. So, I took a rather unconventional approach: I studied wine.
Once I could talk knowledgeably about wine with our French partners, our conversations became far more relaxed and open. That connection allowed us to build trust, which later enabled more honest, in-depth technical discussions. It was a small gesture, but it made a big impact.
Similarly, with our partners in India, the key wasn’t wine but religion. Understanding the local religious landscape and caste systems helped us build rapport and communicate more effectively. These experiences reinforced for me how critical cultural literacy is in international business.
We also take a proactive approach to overseas deployments. For example, when conducting die tryouts abroad, we often recruit Korean international students already living in the region. They assist with trials, gain experience, and, in many cases, later join our company as full-time employees. This model helps bridge language gaps and cultivates a new generation of talent with both cultural fluency and technical skill.

As chairman of the Korea Die & Mold Industry Association, what message would you most like to convey to the global readers?
Mold and die tools are the backbone of industrial production. They are the only tools in the world capable of producing identical shapes and uniform quality at mass scale. Without them, mass production simply wouldn’t exist.
If we had to build every product by hand, the global economy as we know it would grind to a halt. Yet this critical industry often goes unrecognized because our work is embedded in intermediate stages of production. Most people know the end products—cars, TVs, smartphones—but not the tools behind them.
Korea ranks 4th globally in mold production and 2nd in exports. We produce roughly 10 trillion KRW worth of dies annually. Despite the lack of visibility, our nation is an undeniable powerhouse in this space.
In Germany, a country renowned for engineering, industry leaders have declared that a nation’s die and mold sector is the true indicator of its manufacturing competitiveness. I fully agree. Die and mold tooling is not just an industrial sector—it’s the foundation of modern manufacturing.
Think about it: there's no industry untouched by dies. From medical devices and electronics to automotive, semiconductors, and even mobile phones—virtually everything requires a mold or die at some point in its production.
At Silla Engineering, and within the industry association I lead, we are focused on raising global awareness of Korea’s tooling expertise. We host the InterMold Korea exhibition every two years to showcase Korean innovation to the world. In addition, I serve as Secretary-General of the FATM (Federation of Asian Tooling Manufacturers), where I work alongside leading industry figures from 10 countries across Asia.
Our goal is to promote K-dies—Korea’s advanced tooling technologies—and ensure that they are recognized globally as a cornerstone of quality manufacturing.
Let me leave you with one final thought: many people think of the Industrial Revolution as something triggered by British spinning machines or steam engines. But I believe it was the invention of tooling that made true mass production possible. Dies are the invisible force behind the modern world—and Korea is proudly leading the way.