LG Electronics displays heating, ventilation and air conditioning products for artificial intelligence servers at the LG Science Park in Magok, Gangseo-gu, Seoul, in July last year. LG Electronics
LG Electronics (066570) is moving to build a large chiller manufacturing facility in Virginia, home to the world’s largest data center cluster, as it expands its heating, ventilation and air conditioning business for artificial intelligence data centers. The company aims to establish local production to scale up the business as demand for AI data center cooling solutions surges, driven by U.S. big tech firms.
“LG Electronics (066570) is discussing a range of support measures with the state government, including plant site selection, investment incentives, tax benefits on equipment purchases and corporate tax cuts tied to new hiring,” an industry official said. “Once negotiations wrap up, the company will move quickly to build the facility.”
Northern Virginia is known as the data center capital of the world, with AI infrastructure from major technology companies including Amazon Web Services, Microsoft, Google, Meta and Oracle concentrated in the area.
The chiller plant will be LG Electronics’ first overseas production base in the business since it entered the sector in 2011, 16 years ago. The company has met global demand through a dedicated chiller plant in Pyeongtaek, Gyeonggi Province, completed in 2017. But the recent rush to expand AI data centers has increased the need for a stronger North American production system. LG Electronics is currently pursuing multiple chiller supply contracts with global big tech firms including Microsoft, and additional facilities are needed to handle those volumes reliably.
Building on local supply capacity, LG Electronics plans to target the AI data center cooling solutions market, which is projected to grow from $18.4 billion (about 26 trillion won) last year to $49.9 billion (about 70 trillion won) in 2034.
Industry watchers expect the investment to reach about 500 billion won, more than double the roughly 200 billion won spent on the Pyeongtaek plant.