[Edaily Reporter JAEMIN SONG ] SamsungElectronics is investing 240 billion won in its Gwangju facility to begin domestic production of heating, ventilation, and air conditioning (HVAC) equipment for artificial intelligence (AI) data centers. By integrating the technology and production capabilities of Germany’s Flakt Group—which it acquired last year for 2.4 trillion won—into its domestic operations, the company is accelerating its push into the AI data center cooling market.

SamsungElectronics announced on the 19th that it had signed an investment agreement with the Gwangju Integrated Special City in South Jeolla Province and Flakt Group Korea to establish a new HVAC production line at its Gwangju facility. The signing ceremony was attended by Min Hyung-bae, Mayor of the Gwangju Integrated Special City in South Jeolla Province; Kim Cheol-ki, Executive Vice President and Head of SamsungElectronics’ Digital Appliances (DA) Business Division; and Lim Seong-taek, CEO of Flakt Group Korea.

The investment scale was finalized at 240 billion won, an increase of approximately 40 billion won from the 200 billion won initially projected by the industry. The production line will be built on the Gwangju Complex’s third campus with a total floor area of 21,800 square meters—roughly the size of three soccer fields—and is scheduled to begin operations in early 2028.

The new line will be Flakt’s 15th global production hub, following the 14 facilities the company currently operates in the U.S., Europe, and Asia. Flakt, Europe’s largest HVAC manufacturer with over 100 years of history, operates 14 production facilities and 8 research centers worldwide. It supplies central HVAC equipment to data centers, high-tech manufacturing facilities, hotels, airports, and museums.

In Gwangju, the company manufactures cooling water distribution units (CDUs), which are core components of liquid cooling systems for AI data centers. A CDU regulates the pressure and temperature of cooling water and removes impurities between the chiller—a building cooling system—and the cold plates attached to servers. As the heat output from AI servers has surged, driving increased demand for liquid cooling to supplement existing air cooling, the company has established a domestic production base.

The facility also manufactures fan wall units (FWUs) for air-cooling data centers, computer room air handlers (CRAHs), and air handling units (AHUs) for large buildings. SamsungElectronics plans to expand its customer base beyond domestic and international AI data centers to include high-tech manufacturing facilities and large-scale buildings.

Jay Y. Lee’s HVAC Gamble… Investment in Honam Region Takes Shape

HVAC is one of the businesses that Jay Y. Lee, Chairman of SamsungElectronics, has identified as a future growth engine. To strengthen its standalone HVAC products and distribution network, SamsungElectronics established a joint venture with U.S.-based Lennox in 2024 called “Samsung Lennox HVAC North America.” In November of last year, the company acquired 100% of Flact’s shares for approximately 2.4 trillion won, marking its entry into the central air conditioning market for data centers and industrial facilities. This was SamsungElectronics’ first merger and acquisition (M&A) deal in the trillions of won in eight years, following the 2017 acquisition of Harman.

This production line is also part of Samsung’s implementation of its previously announced investment plan for the Honam region. At the “Public Briefing on the Three Major Mega-Projects for Korea’s Great Leap Forward” last June, Chairman Lee stated, “I am confident that if companies, the government, and local governments join forces, we can build the ‘irreplaceable Korea’ that the President spoke of,” adding, “We will devote ourselves to cutting-edge technological innovation and nurturing top talent so that we can take a commanding lead in global competition.” Full text of his remarks at the time

The following day, Samsung announced a plan to invest a total of 425 trillion won in the Honam region, revealing that it would build a digital twin-based innovation hub factory and production facilities for heat pumps and air conditioning units at its Gwangju site. This agreement specifies the investment amount, facility scale, production items, and operational timeline for the HVAC investment that was announced at that time. Samsung’s Honam Investment Plan

The Gwangju plant, established in 1989, will see its first large-scale investment in production facilities in 37 years. The production portfolio, which had focused on AI home appliances such as refrigerators, washer-dryers, and air conditioners, will expand to include B2B air conditioning equipment for data centers.

SamsungElectronics plans to combine Flact’s central air conditioning technology with the B2B connectivity and integrated control platform “SmartThings Pro” and the building integration solution “BIOT” to provide an integrated HVAC solution that encompasses energy management and maintenance. Based on this, the company aims to become a global leader in the HVAC industry by 2030.

Vice President Kim Cheol-gi stated, “SamsungElectronics will rapidly expand its HVAC business—a key driver of future growth—to emerge as a leader in the global market,” adding, “The establishment of this production line in Gwangju will serve as a crucial foundation for securing differentiated competitiveness in the HVAC business.”