"Software factory" in overused and inaccurate term. Factories have an expensive tooling process and then create the same widget thousands/millions of times. Software can be copied effortlessly once made.

What people are describing is more like a "software kitchen" or "software machine shop".

or maybe more like a restaurant than a kitchen... with software development (like all product development) you need to bake in the user feedback loop

like to torture the metaphors, i think we already have the factory (coding agents you can ask to manufacture software to a spec) but it's the whole process including QA, shipping, listening to users and iterating that has to happen over time (unless you have an accurate world simulation so you know exactly how your product will be received... and I know there are people working on that too but I'm skeptical)

Artisan software factory