LG Electronics is relying on its chiller business to become a ‘unicorn’ within three years.
New business models generating annual sales of over $US740 million are referred to as a unicorn business.
Over the past three years, LG’s chiller business has achieved an average annual growth rate of over 15 per cent, with overseas sales more than doubling during the same period.
The chiller business, which provides cooling solutions for large buildings, has seen new opportunities as global tech giants increase demand for data centres amid the AI boom.
LG plans to leverage its extensive experience in supplying chillers to power plants, data centres and other facilities, along with its high-efficiency core technologies, to actively target the data centre cooling market.
In addition, LG is preparing to commercialise new solutions, such as liquid immersion cooling, which are gaining traction in the market.
These plans were outlined by LG CEO, William Cho, at an investor forum at LG Sciencepark in Seoul, South Korea.
Cho detailed LG’s approach to business portfolio innovation, focusing on four key directions: maximising the full potential of existing key businesses, expanding platform-based service models, accelerating the growth of B2B and fostering New-to-LGE businesses.
In terms of accelerating the growth of B2B businesses, LG is achieving significant results in areas such as vehicle components, HVAC and smart factories.
LG aims to increase the B2B share of its total revenue to over 45 per cent by 2030. The B2B share, which was 27 per cent in 2021, has already risen to 35 per cent in the first half of this year.
The company is also expanding its global production footprint to support this growth. In the HVAC sector, LG leads the high-efficiency market with its advanced inverter and heat pump technologies, and it is actively targeting the cooling systems market for AI data centres, where demand is surging.
According to ResearchAndMarkets.com, the global market for data centre cooling was $US16.9 billion in 2023.
It is projected to reach $US51.3 billion by 2030, growing at a CAGR of 17.2 per cent from 2023 to 2030.
The ongoing trend towards cloud computing and the Internet of Things (IoT) is driving demand, as both rely heavily on data centres.