[Why&Next]Home Appliance Rivals Clash Again in Data Centers... Samsung's "Flakt" vs. LG's "Chiller"

HVAC Emerges as a New Growth Engine Amid Stagnation in Traditional Home Appliances
LG Rapidly Expands Orders with a Full Lineup
Samsung Closes In with M&A Synergy and Integrated Management

The heating, ventilation, and air conditioning (HVAC) market is emerging as a new battleground for the home appliance industry. As growth in traditional home appliance businesses slows, LG Electronics and Samsung Electronics have identified the rapidly expanding data center cooling market, fueled by the proliferation of artificial intelligence (AI), as their next-generation growth engine.

The AI Boom Is Reshaping the Industry... Accelerating Both Quantitative and Qualitative Growth

According to industry sources on May 17, the focus of competition is shifting beyond simple equipment supply to providing 'total solutions' that encompass both cooling facilities and operational software. Industry observers note that the key to market leadership now lies in building a comprehensive HVAC portfolio.

An HVAC industry insider commented, "For large-scale industrial projects, it is crucial to be equipped with total solutions if you want to expand your business scope. Ultimately, the winner in the global HVAC market will be determined by who possesses a more complete HVAC ecosystem."

LG Electronics, the 'Prepared First Mover'

LG Electronics entered the HVAC market as an early mover by acquiring the air solutions business unit of LS Mtron in 2011. For over a decade, it has strengthened its market dominance by supplying cooling solutions to domestic and international data centers, and now offers a full lineup of products required for data center cooling, including chillers (large-scale cooling units), air handlers, liquid and immersion cooling systems, and energy management software. In particular, the company holds an overwhelming advantage in the chiller market thanks to its technological capability to internalize key components such as compressors and motors.

Its global order book is also expanding. LG Electronics is working to supply cooling solutions to the Net Zero AI data center of NEOM City in Saudi Arabia and the Jakarta AI data center in Indonesia. It has already secured a contract to supply air-cooled free cooling chillers worth tens of billions of won to a hyperscale AI data center in the United States.

Samsung Electronics Accelerates Total Solutions with the Acquisition of FlaktGroup

Samsung Electronics also mounted a counteroffensive last year by acquiring FlaktGroup, Europe’s largest HVAC company, for approximately 2.4 trillion won. FlaktGroup, which operates more than 10 global production bases, supplies HVAC systems for large commercial facilities, central air conditioning for hospitals, and precision cooling systems—and boasts over 60 years of expertise in data center cooling. Leveraging this acquisition, Samsung Electronics has set a goal of becoming a global HVAC top-tier player by 2030.

The company is also accelerating its efforts in the Korean market. On May 4, Samsung Electronics established the FlaktGroup Korea subsidiary in Yeongtong-gu, Suwon, Gyeonggi Province, officially launching its data center and cleanroom HVAC business. Vice President Lim Sung-taek, head of the Air Solution Business Team in the Digital Appliances (DA) division, has been appointed as an internal director to spearhead the business, and the company is also considering establishing a domestic production base. In its recent Q1 earnings call, Samsung Electronics stated, "We are pursuing expansion into Europe and North America centered on FlaktGroup and planning to enter the domestic market through the establishment of a local subsidiary and factory in Korea."

This content was produced with the assistance of AI translation services.