As the construction of artificial intelligence (AI) data centers increases in the United States, the demand for cooling equipment is rising. LG Electronics is localizing its production facilities to seize market opportunities. The company plans to establish a factory in Windsor, Virginia, to produce and supply cooling equipment directly to North American clients, reducing logistics burdens and delivery times while enhancing its competitiveness in securing orders.
According to industry sources, LG Electronics is preparing to set up an air-cooled chiller factory in Windsor, Virginia, with a target to begin operations in the first half of 2027. Chillers are devices that create cooling water to dissipate heat generated by data center servers. Alongside the new factory in the U.S., LG Electronics will also expand its production lines in Pyeongtaek and Changwon, investing a total of 150 billion won in related initiatives.
Establishing a local production base is crucial for quickly responding to large orders from North American clients. By situating its manufacturing facility in Virginia, where data centers are concentrated, LG can reduce logistics burdens and delivery times while flexibly meeting specific client demands. The company aims to enhance supply stability by expanding domestic production capacity and accelerating the conversion of orders into actual sales.
Recent order performance supports growth expectations. On October 5, LG Electronics announced a long-term supply contract for cooling solutions to support a total of 5 gigawatts (GW) of data center infrastructure with Air Control Concept, a North American data center infrastructure company. This figure represents the power capacity of the data centers that the cooling equipment will support, not the contract amount. In the first half of this year, the order value for AI data center cooling solutions exceeded 600 billion won.
In addition to air-cooled chillers, LG Electronics is also enhancing its liquid cooling technology, which directly transfers heat from server chips to cooling water. The company aims to expand its presence in the data center cooling market by supplying both air-cooled and liquid cooling equipment. However, for the expansion of production lines to lead to improved profitability, it must connect orders to stable supply volumes and increase the proportion of high-value-added products.
LG Electronics' Eco Solutions (ES) division recorded sales of 9.323 trillion won and an operating profit of 647.3 billion won in 2025. However, this performance includes not only data center cooling but also residential air conditioning and commercial and industrial air conditioning businesses, making it difficult to assess the profitability of the data center segment separately.
An industry insider noted, "In the data center cooling market, not only product performance but also the ability to supply large volumes on time is crucial. Local production and high-value cooling solution orders must align to lead to actual profitability improvements."
* This article has been translated by AI.
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