LG Electronics shares rose more than 5% in early trading after the company secured a long-term supply contract for cooling systems for artificial intelligence data centers (AIDC) in North America, boosting investor sentiment.
As of 9:52 a.m. on October 6, LG Electronics was trading at 227,500 won, up 5.56% (11,500 won) from the previous trading day, according to the Korea Exchange.
The increase in stock price is attributed to the announcement of a significant order in the AIDC cooling business. The previous day, LG Electronics' U.S. subsidiary announced it had signed a long-term supply agreement (LTA) for chillers with Air Control Concepts, a major infrastructure platform provider in North America.
Through this partnership, LG Electronics plans to gradually supply a range of cooling devices, including high-efficiency chillers for AIDC thermal management, with a total capacity of 5 gigawatts (GW). As the AI industry grows, the power consumption and heat generation of data centers are surging, increasing the importance of reliable cooling systems for stable operations.
Air Control Concepts is a platform specialist responsible for the entire process of AIDC design and construction, public bidding, and aftercare (AM) across North America, including the U.S. and Canada. With major global data center operators as clients, LG Electronics is expected to accelerate its entry into the North American AIDC cooling market.
Analysts believe this contract will highlight LG Electronics' growth potential in new business areas. They are particularly focused on the potential for AIDC cooling systems and robotics to become new growth drivers beyond the company's traditional home appliance business.
Meritz Securities raised its target price for LG Electronics from 220,000 won to 250,000 won, reflecting the company's new business growth potential.
Yang Seung-soo, a researcher at Meritz Securities, stated, "This year, LG Electronics' stock price is driven by expectations surrounding the AIDC cooling solutions and robotics as dual growth engines. In particular, the AI data center cooling business is expected to achieve an order backlog of about 3 trillion won this year, demonstrating tangible results."
He also noted that the expansion of the cooling solutions product line increases the likelihood of additional orders. "In addition to air-cooled chillers, the certification of liquid cooling CDU products by major clients is broadening, significantly enhancing the potential for further orders," he explained.
The robotics business is also presented as a future growth driver for the stock price. He mentioned, "In the robotics sector, approximately 200 Clod robots are being deployed at the Yangjae Data Factory for demonstration purposes, and they are expected to enter a full commercialization phase starting next year as they are gradually introduced to production bases in the Americas."
* This article has been translated by AI.
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