Samsung Electronics Completes Acquisition of Flakt Group... Intensifies Data Center Air Conditioning Market Competition with LG Electronics

Entering the Air Conditioning Market with the Flakt Acquisition
Outstanding Central Air Conditioning and Precision Cooling Solutions from "107 Years of Experience"
Synergy with Flakt Likely to Intensify Competition with LG Electronics
LG Electronics Stands Out in HVAC with Multiple MOUs
Supplying Chillers to Airports Worldwide... 7 Trillion Won Contract in Saudi Arabia

Samsung Electronics and LG Electronics, which have long competed in home appliance "heating and cooling" technologies, are now expanding their rivalry into the data center air conditioning sector. Rather than focusing on the highly competitive consumer market dominated by Chinese companies, both are aiming to secure a foothold in the data center air conditioning market, which has higher technological barriers and is more difficult to enter, positioning it as a new growth engine. With the rapid increase in data centers, air conditioning technology and air quality management capabilities are emerging as core competitive factors. As a result, the advancement of air conditioning technologies and the acquisition of industrial heating and cooling solutions have become critical determinants of future revenue streams for the home appliance industry.

Samsung Electronics acquired German Flakt's air conditioning solution equipment. Flakt

On November 6, Samsung Electronics completed the acquisition of Fl?kt Group, the largest air conditioning company in Europe. Even after the acquisition, Samsung Electronics plans to retain Fl?kt's corporate name, current management, and employees, thereby fully absorbing its existing network and technological capabilities. The acquisition marks Samsung Electronics' official entry into the data center air conditioning market. The expected benefits of the acquisition are also centered on data center air conditioning. Fl?kt has both a long history and technological expertise in this field. Founded in 1918, the German company Fl?kt boasts 107 years of experience. It supplies central air conditioning and precision cooling solutions for data centers, large commercial facilities, and hospitals, primarily in Europe but also in global markets. Fl?kt operates more than 10 global production bases and has an extensive sales and service network spanning Europe, the Americas, the Middle East, and Asia. The company also manages subsidiaries such as Woods, which provides ventilation and fire safety systems for tunnels, ships, and the defense industry; Semco, responsible for air conditioning and flow solutions; and SE-Electronic, a specialist in automation-based building control. Based on this, Fl?kt holds a 12.2% market share in the European central air conditioning market, ranking first. Notable central air conditioning systems installed by Fl?kt include those at Leonardo da Vinci Airport in Italy in 2016, East Midlands Data Center in the United Kingdom in 2020, and Rovaniemi Hospital in Finland in 2023.

Previously, in May last year, Samsung Electronics established a joint venture with the American HVAC company Lennox. However, the acquisition of Fl?kt is seen as a more assertive move to enter the air conditioning market. Industry observers believe that if Samsung Electronics begins to realize the benefits of acquiring Fl?kt, it will further intensify competition with LG Electronics, which has already established a presence in the market.

LG Electronics has moved even faster than Samsung Electronics in strengthening its presence in the air conditioning market. At the end of last year, LG Electronics reorganized its structure by establishing the Eco Solution (ES) Business Division to expand its HVAC business. The company also set a goal of achieving 20 trillion won in sales in this sector by 2030. Since then, LG Electronics has developed related solutions, advanced its technologies, and secured major supply contracts with global corporations and governments. The company has supplied high-efficiency cooling units known as "chillers" to airports not only in South Korea but also in Jakarta (Indonesia), Dhaka (Bangladesh), Benito Juarez (Mexico), and Maya-Maya (Republic of the Congo). In April, LG Electronics was selected as the sole supplier of ultra-high-efficiency HVAC solutions for a mega logistics center in Singapore. In September, the company signed a memorandum of understanding (MOU) to provide large-scale cooling solutions for the AI data center in the advanced industrial complex "Octagon" in NEOM City, Saudi Arabia. The supply contract is valued at approximately 7 trillion won.

An industry insider commented, "With Samsung Electronics joining LG Electronics in entering the air conditioning market, it appears that the rapidly expanding market horizon and promising profit outlook have played a significant role." According to market research firms such as Research Nester, the global air conditioning market surpassed 240.91 billion dollars (approximately 347 trillion won) this year and is expected to grow to over 452.22 billion dollars (about 651 trillion won) by 2035. Within this, the data center air conditioning segment, which reached 16.7 billion dollars (about 24 trillion won) last year, is projected to expand to 44.1 billion dollars (about 63 trillion won) by 2030.