Samsung and LG Accelerate AI Home Business with Modular Housing

Samsung Electronics and LG Electronics are accelerating their AI home business by focusing on modular housing. This shift moves beyond selling individual appliances like refrigerators and washing machines to integrating appliances, artificial intelligence (AI), heating, ventilation, and air conditioning (HVAC), and energy management into living spaces. Analysts suggest that the competitive landscape in the home appliance industry is expanding from products to homes.

According to industry sources, Samsung and LG have recently strengthened their AI home initiatives using modular housing. In June, Samsung launched the 'Samsung AI Modular Home' in collaboration with Space Production, a company specializing in wooden modular homes, while LG is expanding its product range and sales channels for its modular home 'LG Smart Cottage'.

Modular homes are constructed using an off-site construction (OSC) method, where key structural components like walls, ceilings, and floors are pre-fabricated in a factory and then assembled on-site. This approach allows for simultaneous on-site construction and factory production, reducing the typical construction time from about two years to approximately one and a half years, a 30% decrease.


The Samsung AI Modular Home incorporates Samsung's AI appliances and SmartThings-based AI home solutions from the housing production stage. During the pre-fabrication process, Space Production installs appliances and smart devices, including air conditioners, heat pumps, refrigerators, and TVs, in over 80% of the home.

Rather than selling homes directly, Samsung aims to use modular housing as a new supply source for its AI home solutions. Starting with single-family homes, the company plans to expand its application to reinforced concrete modular homes, multi-family housing, and buildings, with a goal of reaching a cumulative total of 10,000 modular homes equipped with Samsung appliances within three years.

In contrast, LG has positioned the living space itself as a product. The Smart Cottage is a modular home that combines AI appliances, HVAC, and energy management solutions, currently available in eight models ranging from 8 to 24 pyeong. LG oversees everything from design and planning to production and quality inspection.

LG has also expanded its sales approach to the general consumer market. This month, LG became the first in South Korea to sell modular homes through home shopping via CJ OnStyle. A mobile live broadcast on August 5 attracted over 50,000 simultaneous viewers and generated hundreds of consultation requests.


As Samsung and LG expand their businesses, the foundation for growth in the modular housing market is also strengthening. The Ministry of Land, Infrastructure and Transport recently announced plans to increase the public housing orders for modular homes from 12,000 to 20,000 units through the 'Rapid Housing Supply Plan' for 2027-2030, with the annual order volume rising from 3,000 to 5,000 units, a 67% increase.

The modular market is also showing growth. The Korea Construction Policy Research Institute predicts that the domestic modular construction and housing market will grow from 607.4 billion won last year to between 1 trillion and 4 trillion won by 2030. Rising construction labor costs, a shortage of on-site workers, and demand for shorter construction times are driving the shift toward factory-produced homes.

However, price competitiveness remains a challenge. Currently, the construction cost of modular homes is estimated to be about 30% higher than traditional on-site construction methods, with an additional cost of approximately 70 million won per unit. To address this, the government plans to support about 50% of the additional construction costs by 2030 and promote bulk production to lower unit prices through increased public orders.


The reason the appliance industry is focusing on modular homes is that they can integrate their products and platforms from the very beginning of the home construction process. Previously, consumers purchased refrigerators, washing machines, and air conditioners individually after the home was completed. In modular homes, appliances, Internet of Things (IoT) devices, HVAC, and energy management systems can be packaged together from the design stage.

This aligns with the AI home strategies envisioned by Samsung and LG. By establishing their platforms as the basic infrastructure of the home from the move-in stage, they can connect various devices and services into a single ecosystem, moving beyond individual appliance sales. Given that both homes and appliances have long replacement cycles, this strategy is expected to secure long-term customers.

There is also potential for expansion into the business-to-business (B2B) market. LG previously supplied Smart Cottages to SM Entertainment's training center in Gangwon Province in 2024. As modular construction expands to hotels, resorts, training centers, employee accommodations, and senior living facilities, the supply of AI home solutions could also increase.

An industry insider noted, "The rise of modular homes is accelerating the 'productization of homes,' and the competition between Samsung and LG in the appliance sector is also expanding from products to spaces. The competition is now shifting from selling individual appliances to connecting the entire home, where consumers spend the most time, to their AI ecosystem."