LG Electronics Accelerates AI Data Center Cooling Business

LG Electronics will officially launch its AI data center cooling business in the second half of this year, securing orders for 'chillers' from major US tech companies. A 'chiller' is a core device that uses refrigerant to cool water, which is then circulated to dissipate the intense heat generated by AI data centers.

Lee Jae-sung, President of LG Electronics' ES Business Division, has set a target of achieving 1 trillion won in chiller business revenue by 2027. He is focused on transforming LG Electronics from a mere 'cooling equipment supplier' into a 'data center thermal management platform company.' The goal of 1 trillion won in chiller business revenue by 2027 is central to this expansion strategy.

LG Electronics is also formalizing additional orders from big tech companies beyond Microsoft. Choi Bo-young, an analyst at Kyobo Securities, noted that LG Electronics is in the final quality certification testing phase with two big tech firms, and revenue recognition is expected within a year of completing the tests. Lee Ju-hyung, an analyst at Eugene Investment & Securities, analyzed that LG Electronics' ES Business Division is positioning itself as an integrated air- and liquid-cooling solutions provider, and the current procurement process, where big tech companies select vendors directly, will be a critical turning point for LG Electronics' future AI data center project orders.

To cope with the high heat output of AI servers, LG Electronics is moving beyond the limitations of air cooling and accelerating the expansion of liquid cooling systems, which involve circulating water or special coolants directly to the servers. President Lee has been concentrating efforts on transitioning the business towards liquid cooling through HVAC (Heating, Ventilation, and Air Conditioning) since the shareholders' meeting in March. Furthermore, LG Electronics is collaborating with overseas partners to create cooperative models by combining liquid cooling solutions tailored for AI data center demands with high-precision control technologies such as optimal flow rate control and virtual sensors.

LG Electronics is expanding its business scope beyond chillers and liquid cooling to include energy optimization solutions that monitor overall data center efficiency and reduce power loss. In collaboration with 'Pado,' a startup spun off from LG Electronics' North America Innovation Center (LG NOVA), the company is building real-time analysis solutions for data center power and cooling systems.