Embodied intelligence has always been regarded as the ultimate form of artificial intelligence (AI) and an ideal concept for smart manufacturing. With the development of AI foundation models, remarkable generalization capabilities have been achieved in various fields, such as natural language processing and computer vision. In the era of AI foundation models, embodied intelligence will be capable of continuous evolution for unlimited tasks with multimodal physical interaction in the open world. Therefore, it is envisioned that embodied intelligence should be integrated into smart manufacturing to upgrade the industry for more intelligent, flexible, and human-centric manufacturing in the future. Therefore, in this article, the definition and components of embodied intelligence are proposed with its novel characteristics. Besides, the capabilities of embodied intelligence in the era of AI foundation model are discussed. Moreover, typical innovative applications of embodied intelligence throughout the whole product life cycle for smart manufacturing are presented with insights. However, embodied intelligence still faces some challenges for implementation. Thus, in the prospect of future, challenges and outlooks of embodied intelligence are discussed for further research and applications.