LG Electronics Inc., a leading South Korean home appliance maker, has emerged as one of the world’s top five players in the heating, ventilation and air conditioning (HVAC) market, driven by its focus on large-size chillers.
According to industry sources on Wednesday, LG ranked fifth in the global large-scale chiller market this year.
The milestone comes 13 years after the company acquired the chiller business from LS Mtron Co. in 2011. LG’s HVAC market share has more than doubled since then, rising significantly from 2017.
Industry officials said LG had gained traction in the competitive market against bigger rivals such as top player Johnson Controls International plc of Ireland, Trane Technologies of the US, Daikin Industries Ltd. of Japan, and Carrier Global Corp. of the US.
LG Electronics CEO Cho Joo-wan unveils LG's business strategy at a forum held in LG Science Park on Aug. 21, 2024 (Courtesy of Yonhap) DEMAND FROM AI DATA CENTERS
LG’s swift rise to global prominence is attributed to the recent surging demand for large-scale air-cooled chillers fueled by the growing use of artificial intelligence.
Air-cooled chillers, which use external air to generate cool air, have become a popular alternative to water-cooled systems that consume significant water for cooling, especially at AI data centers.
A key feature of LG’s chillers is their “oil-free magnetic bearing” technology, which the company independently developed. It began mass production of chillers equipped with the technology in 2017.
LG is the only company worldwide applying this technology to large-scale air-cooled chillers. While its competitors have focused on technology for smaller coolers, LG shifted early to large-scale applications, industry watchers said.
The LG technology allows the compressor motor’s rotating shaft inside the chiller to be levitated and supported in mid-air using electromagnetic forces, enabling it to rotate with minimal friction – a process similar to magnetic levitation trains, where electromagnetic forces lift the train off the tracks.
LG’s HVAC system Compared to competitors’ oil-based bearings, LG’s system significantly reduces noise, energy loss and maintenance costs, according to the company.
“Our chiller can cool a space of up to 99,000 square meters. Large-size products offer space and energy efficiency advantages, making them ideal for data centers and large buildings,” said an LG official.
LOOKING TO EXPAND HVAC MARKET PRESENCE
LG Electronics plans to aggressively expand its presence in the global cooling systems market, in line with increasing demand for chillers.
According to global market research firm IBISWorld, the global HVAC market is forecast to grow to $61 billion by 2028 from $58.4 billion in 2023.
LG Electronics' HVAC research center in Frankfurt, Germany In August, Chief Executive Cho Joo-wan said LG plans to nurture new businesses that can each bring in more than 1 trillion won ($718 million) in annual revenue, such as HVAC.
Globally, LG operates a wide range of research and education programs to foster over 30,000 HVAC engineers annually in 43 countries. It has established an LG HVAC Academy training center in 62 locations worldwide.
Write to Chae-Yeon Kim at Why29@hankyung.com In-Soo Nam edited this article.
