Samsung Electronics and LG Electronics, South Korea’s leading tech giants, are boosting their presence in the global cooling business in the age of artificial intelligence (AI). The AI boom has driven up energy demand, generating lots of heat and the need for cooling technologies to dissipate heat in data centers.
Demand for technologies that minimize energy consumption while heating and cooling are also growing as governments and companies strive to limit carbon emissions associated with the increasing use of AI.
LG Electronics has been securing projects to supply cooling systems in data centers and battery factories worldwide. Samsung Electronics has agreed to form a joint venture with Lennox, a leading U.S. HVAC (heating, ventilating and air conditioning) company. “Korea’s two leading home appliance companies have yet to conquer the global HVAC market,” said an industry insider. “They see the HVAC market as a new source of growth and are now looking to gain a strong foothold.”
LG Electronics supplies its cooling system, the LG Chiller, to data centers. “LG’s chiller is designed to provide effective cooling for large buildings and industrial facilities, using a system that circulates chilled water through a heat exchanger to provide cool air,” the company stated. LG Electronics entered the chiller business after acquiring LS Mtron’s HVAC division in 2011 and has since been supplying thermal management systems to data centers, battery factories and nuclear power plants.
“LG’s chiller business revenue grew by nearly 30% last year, propelling the company’s diversification efforts into becoming a specialized HVAC company,” said an LG Electronics representative. The global data center cooling market is expected to grow from $14.9 billion last year to $30.3 billion by 2030, according to a Shin Young Securities report.
Heat management technologies have become essential for battery production facilities and semiconductor factories. Standard air conditioners are insufficient in these settings, requiring large-scale chillers.
Following the Russia-Ukraine war, energy prices have skyrocketed, and the push for eco-friendly solutions has increased the demand for home appliances that limit carbon emissions, creating new business opportunities for Korean companies.
LG Electronics and Samsung Electronics are leveraging their heat pumping technologies to target local markets. Heat pumps draw heat from the air, ground, or water to provide heating and cooling. Compared to traditional heat management systems, heat pumps use only 20-30% of the electricity, making them energy-efficient solutions that effectively reduce carbon emissions. By forming a joint venture with Lennox, Samsung Electronics aims to promote its high-efficiency heating and cooling equipment.
LG Electronics is pursuing a localization strategy by building local offices encompassing research and development, production, sales, and maintenance in major regions such as North America and Europe. Last year, the company set up overseas offices of its HVAC subsidiary, Hi-M Solutek, which specializes in air conditioning service and maintenance, in the U.S., Germany, and India. It now operates branches in 10 countries worldwide. LG Electronics also established a heat pump research center in Alaska to develop high-performance heating, ventilation, and air conditioning products that can operate efficiently even in extreme cold.
