To secure a share of the data center heating and cooling market, which is expected to grow to 140 trillion won within five years, Samsung Electronics and LG Electronics are employing different strategies. Samsung Electronics aims to expand its influence in the market through mergers and acquisitions (M&A), while LG Electronics has chosen to reorganize its existing business structure by establishing a new Enterprise Solutions division.
However, analysis suggests that it will take time to catch up with the technological expertise of companies like Vertiv, which leads in cutting-edge technologies in the data center cooling sector, and Global Standard Technology (GST). In particular, the competition is expected to hinge on the advancement of liquid cooling (CDU) technology, which is regarded as the optimal solution for managing heat during artificial intelligence (AI) data center operations.
◇ Market to reach 140 trillion won in five years… Samsung and LG have jumped in
According to industry sources on the 30th, domestic corporations, including Samsung Electronics and LG Electronics, have begun large-scale investments to capture the heating and cooling market, which is projected to grow to 140 trillion won by 2030. Earlier, Samsung Electronics announced that it would acquire FläktGroup, Europe’s largest heating and cooling company based in Germany, for €1.5 billion (approximately 24 trillion won). This is Samsung’s first acquisition involving multi-trillion won since it bought Harman, a car and audio company, for about 9 trillion won eight years ago.
Samsung Electronics expects continued growth in data center demand due to the proliferation of generative AI, robotics, autonomous driving, and extended reality (XR), and it is reported that this acquisition decision was made with that in mind. The company plans to combine its building integrated control solutions with Fläkt's control solutions to secure stable and high profitability in the data center cooling market over the medium to long term.
LG Electronics is also focusing its efforts on the growth potential of the cooling market. Last year, LG Electronics separated the cooling business from its existing Home Appliances and Air Solutions division to create the new Enterprise Solutions division as part of a reorganization. The company broke ground on a new cooling production facility in Huntsville, Alabama, USA, and plans to expand the supply of high-efficiency products such as system air conditioners and heat pumps in response to increasing North American commercial cooling demand. Additionally, LG has supplied its high-efficiency commercial system air conditioner 'Multi V I' to a massive logistics center built in the Tuas area of Singapore, approximately the size of nine soccer fields.
◇ The biggest enemy of data centers is 'heat'… Liquid cooling technology gains attention
Inside data centers, chips generate heat as they perform computations, necessitating cooling solutions to mitigate this heat. Particularly in AI data centers where model training, inference, cloud services, and big data analysis all occur, investment required for heat control is reportedly more than six times that of typical data centers. For example, servers equipped with NVIDIA's latest chip, the Blackwell GPU, have a power density over 13 times higher than standard servers.
The method of cooling data center heat using liquid is commonly referred to as 'liquid cooling solution.' Liquid cooling solutions include methods that use water for cooling, such as Direct To Chip Cooling, and Immersion Cooling, in addition to traditional air cooling methods.
Currently, the most attention-grabbing liquid-based technology is immersion cooling, known for its high level of difficulty. The chip cooling method involves attaching cold plates to each central processing unit (CPU) and graphics processing unit (GPU) and circulating coolant through these plates to dissipate heat. The immersion cooling method submerges the CPU and GPU in a tank of a special liquid called insulating oil to remove heat. However, the technology is still in its early stages, and there are almost no commercial applications yet. It is known to have vulnerabilities in terms of cost and efficiency.
Samsung Electronics and LG Electronics have secured technologies related to liquid cooling, specifically the Coolant Distribution Unit (CDU) technology. CDU is a device that distributes coolant to CPU and GPU servers, sending heated coolant to external cooling systems and redistributing cold coolant back to the servers. However, the immersion cooling technology held by companies like Vertiv is still reported to be in the research and development phase.
An industry insider noted, "In Samsung's case, acquiring Fläkt, which has long-standing expertise, will likely allow it to enter the market relatively quickly, while LG Electronics is also rapidly growing by increasing supply performance to its affiliates," adding, "As the liquid cooling market is growing rapidly, the overseas order performance of companies providing diverse portfolios and cost efficiency will be crucial."