LG Electronics is expanding its artificial intelligence data center (AIDC) cooling business from standalone chillers to an integrated cooling solution that encompasses design, control, and maintenance, aiming to enhance profitability. The company anticipates higher profitability compared to its existing home appliance business. The roadmap for its robotics division includes building references in the manufacturing and logistics sectors before expanding into home humanoids around 2030.
During a conference call on October 28, LG Electronics reported that "current AIDC cooling revenue is focused on chillers, but we will broaden our offerings to include liquid cooling products like cooling distribution units (CDUs) and airside products." The company stated that as high-value products and services increase, profitability will significantly improve compared to its home appliance (HS) business. It plans to expand its regional portfolio, focusing on the U.S., Middle East, and Asia.
Thanks to growth in new businesses, LG Electronics reported strong third-quarter results. The company recorded consolidated sales of 23.8241 trillion won and an operating profit of 781.9 billion won, marking an 8.9% increase in sales and a 13.5% rise in operating profit compared to the same period last year.
The robotics division will initially target the academic, public, and manufacturing sectors. The strategy involves securing key components like actuators to dominate the early production market, with plans to expand into the home robot market when it opens around 2030. The company noted that "the key factor will be pricing that consumers can realistically consider for purchase."
In the fourth quarter, LG's external paid demonstration project at the 'LG Data Factory' in Umyeon-dong, Seoul, will be treated as a long-term project, prioritizing the enhancement of its own robot performance for the time being. The company plans to collaborate with NVIDIA on physical AI, including simulations and world models, to combine real and virtual data, aiming to accumulate 500,000 hours of training data this year.
However, cost pressures are expected to persist in the near term. LG Electronics anticipates that prices for liquid crystal display (LCD) panels will face upward pressure in the first quarter of next year. The company explained that it may be difficult to pass on costs in the competitive mid-range TV and monitor markets, potentially increasing profitability challenges.
To address these issues, LG will diversify its supply sources, optimize purchasing timing, and adjust specifications for memory components. Although shipping costs may stabilize later due to the impact of the Middle East conflict, the company expects upward pressure to ease after November. The strengthening of the Korean won has slightly worsened the hedging effect compared to previous levels.
LG Electronics expressed confidence in its competitive edge against Chinese appliance manufacturers. The company reported a significant improvement in overseas market share compared to Chinese competitors in the first half of the year, particularly widening the gap in major North American retail channels. However, it plans to strengthen premium entry barriers while securing market share in the budget segment in anticipation of intensified competition.
The automotive business, led by its affiliate LG Magna e-Powertrain, has entered a stabilization phase at its plant in Mexico, which now accounts for over 40% of total sales. The Hungarian plant is on track for mass production by February 2027.
* This article has been translated by AI.
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