Samsung Electronics to build HVAC factory in Gwangju in push to diversify

Samsung Electronics plans to build a heating, ventilation and air conditioning (HVAC) factory at its Gwangju business site as part of efforts to expand future growth engines.

Samsung Electronics currently operates three campuses in Gwangju — Green 1, 2 and 3 — producing air conditioners, refrigerators, washing machines and dryers. The new factory will be built within Green Campus 3.

Samsung Electronics completed the acquisition of FlaktGroup, Europe's largest air-handling equipment maker, in November last year. The company is now moving to establish a domestic production base for the business less than a year after that deal closed.

On Tuesday, Samsung Electronics announced the creation of a robotics business unit reporting directly to the CEO, formally entering the robotics market. With news of the HVAC factory now emerging as well, analysts say the contours of the company's new-business diversification strategy are becoming increasingly clear.

Samsung Electronics recently filed a building permit application with the relevant local government for an HVAC factory within the Gwangju Advanced Industrial Complex, industry sources said Wednesday. The factory is expected to occupy a site of about 33,000 square meters within Samsung Electronics' Gwangju Green City Campus 3. The project will involve adjusting some production lines already operating at the campus while constructing a new building on vacant land — effectively an expansion of the existing facility.

The new HVAC factory is estimated to require an investment of about 200 billion won ($135 million). Samsung aims to use the investment to strengthen its HVAC lineup — including chillers for AI data centers — and secure new growth drivers for its struggling consumer electronics (DX) division.

Samsung Electronics' air conditioning business had previously been limited to individual HVAC systems for residential and commercial use. The FlaktGroup acquisition extended that reach to central air handling systems for large facilities such as shopping malls, factories and hospitals, and positions the company to compete for HVAC contracts at AI data centers, where demand is expected to surge. The broader strategy is to reduce reliance on the more earnings-volatile business-to-consumer segment while strengthening competitiveness in the business-to-business space.

The factory is also expected to play a central role in the Samsung group's data center business, a key new growth area. Samsung is participating in the Stargate Project, through which OpenAI, SoftBank and others are investing up to $500 billion to build cutting-edge data centers across the United States. In that initiative, Samsung Electronics handles semiconductors and air conditioning systems, Samsung C&T and Samsung Heavy Industries are responsible for floating data centers, and Samsung SDS is jointly developing AI data centers with OpenAI.

In January, FlaktGroup CEO David Donny said the new production line set to be established in South Korea in 2026 "will serve as a kind of standard model for the factory of the future," adding that the company intends to use it "as a springboard to expand FlaktGroup's presence across Asia."

The factory had originally been expected to break ground in late August. However, the discovery of the Korean narrow-mouthed frog — a Class 2 endangered species — on the planned site is likely to push back the schedule somewhat. Samsung Electronics plans to identify three or four alternative habitats and safely relocate the frogs to preserve the population. The company has also submitted a plan to the Yeongsan River Basin Environmental Office to create alternative habitats for the endangered species ahead of the relocation.