The idea of a software factory long predates LLMs or any other form of automated full-program generation. The idea was to take full CI/CD pipelines that allow for rapid deployment of new components into a running system a la popular SaaS providers and web platforms that are usually single vendor or even single application, and extend the idea to a centralized production facility used by many different application vendors and consumer endpoints. Kessel Run in the US Air Force is the largest widely-touted success story I'm aware of, but I'm sure there must have been others.

Think of Netflix and Google sharing the same developer VDIs, build tooling, unit test framework, E2E test framework, promotion gates, and possibly even a common runtime platform. It's not something the commercial world tends to think much about, but in the military world you have many different vendor collaborating on a single C2 or comms system, but individually building their own production lines for each component. Centralize that and you can reduce procurement costs by de-duplicating effort, at least in theory.

Plenty of these have been built. I can buy that no one has built a fully-automated set of agents running on common compute, storage, and network substrates that can create, verify, and ship arbitrary software from vague natural language desirements alone, but that isn't the same thing and it's kind of a shame they decided to use an already in-use name for this. As many have pointed out, real physical factories don't do this, either. They build and ship the same thing with the same physical design in arbitrary quantities, which is a much easier problem to solve. Any Linux distro or mobile app store already does that.