LG Electronics aims to become a datacenter cooling player, with aircon and immersion tech

2030 vision also calls for its appliances and televisions to turn you into a subscription cash cow

LG Electronics plans to expand its datacenter cooling business, to cash in on demand for AI.

The Korean giant already operates a substantial heating, ventilation and air-conditioning (HVAC) business that serves operators of large buildings. Over the last three years sales of the chillers it offers as part of that biz have grown at an average rate of over 15 percent.

LGE now hopes to use those chillers to target datacenter operators, and also plans to plans to commercialize new products – including liquid immersion cooling, where it claimed to be "gaining traction" already.

The details were disclosed at the firm's Investors Forum in Seoul. The event saw execs wax lyrical on the progress and direction of its 2030 Future Vision – a plan launched last year that aims to sees LGE expanding beyond traditional electronics and home appliances into areas like artificial intelligence (AI), robotics, and connected devices.

The Chaebol’s mid- to long-term strategy involves a portfolio transformation that aims to generate seven percent annual average growth, a seven percent operating profit rate, and aims for a valuation where the business is worth seven times its annual earnings.

In 2024, the biz has made decent progress towards those goals. According to figures provided on Wednesday, LG gas posted an eight percent increase in revenue, a six percent operating profit bump, and strong valuation growth.

Despite a significant drop in the Korean home appliance market, LGE has managed to increase its revenue within the country by introducing everyone's less-than-favorite way to spend cash: subscription services.

It plans to get half of its total sales and three-quarters of its profit from three main areas, one of which is growing its platform-based services. The other two are boosting its business-to-business operations and developing new types of businesses.

LG described its move toward combining services with home appliances as a "paradigm shift" – gleefully pointing out that the ongoing customer contact and support will rake in "continuous revenue."

CEO William Cho even referred to the profit and growth provided by these core businesses being propped up by subscription services as "cash cows." Note that in this metaphor it is the customer who gets milked.

"The first direction of maximizing the full potential of current businesses involves a strategy to overcome the limitations of mature core businesses, such as home appliances and TVs," declared LGE.

Its expansion of subscription services will tap into content and advertising, as it strives to become a "media and entertainment platform powerhouse." Its webOS platform-based advertising and content business has already experienced steady growth – 64 percent since 2018, reportedly.

LG's statement declared: "Last year, the subscription business achieved KRW 1.134 trillion (approximately $840 million) in annual revenue, marking a 33 percent growth over the previous year and securing its place as a unicorn business. This growth is accelerating, with revenue expected to rise by nearly 60 percent this year to exceed KRW 1.8 trillion ($1.3 billion)." ®