LG Electronics on the 30th held its second-quarter earnings conference call and sent a message to the market that it would link the business strength it has built in appliances and TVs to growth in artificial intelligence (AI). It aims to secure future growth engines in the physical AI and AI data center (AIDC) markets. It named Nvidia as a key partner to achieve these goals.
In the second quarter, LG Electronics achieved simultaneous growth in appliances and improved profitability in TVs, delivering a clear improvement in results. The appliance business surpassed 7 trillion won in quarterly revenue for the first time, and the TV business, which had been in the red last year, returned to profit. Growth also appeared in the vehicle components and heating, ventilation and air conditioning (HVAC) businesses. Expanding beyond appliances and TVs into vehicle components, HVAC, subscriptions and platforms has paid off. Building on this experience, LG Electronics presented a blueprint to cultivate robots and AIDC cooling as its next growth pillars.
On a consolidation basis, LG Electronics' second-quarter revenue was 23.8265 trillion won and operating profit was 1.5791 trillion won. Both revenue and operating profit rose 14.9% and 147.0%, respectively, from a year earlier, marking record second-quarter highs. Cumulative first-half revenue was 47.5537 trillion won and operating profit was 3.2528 trillion won. First-half operating profit alone surpassed last year's annual operating profit of 2.4784 trillion won.
LG Electronics' second-quarter results reflected the effect of receiving a refund of tariffs already paid in the United States. Park Won-jae, head of IR (senior managing director) at LG Electronics, said, "In accordance with U.S. government guidelines, we proceeded with the refund process for tariffs already paid and received a full refund of the amount in the second quarter," adding, "The total impact, which nets one-off revenue including the tariff refund against one-off expense, is about 300 billion won." Operating profit simply netting this out was 1.2791 trillion won, up about 100% from the same period last year.
◇ Balanced growth in appliances, vehicle components and HVAC… TVs expected to be in the black for the year
The Home Appliance & Air Solution (HS) division, which oversees the appliance business, posted an operating margin of 9.7% in the second quarter. A two-track strategy attacking both the premium and volume zones, along with growth in business-to-business (B2B), online direct-to-consumer (D2C) and subscription businesses, drove revenue growth.
The Media & Entertainment Solution (MS) division, which oversees the TV business, posted operating profit of 219.4 billion won. It swung to a profit from an operating loss of 191.7 billion won in the second quarter of last year. Park Sang-ho, head of management at LG Electronics' MS division (executive vice president), said, "A higher mix of premium products, improved pricing operations, and better overseas performance centered on the Americas lifted results," adding, "We expect a meaningful level of profit for the full year."
The Vehicle component Solutions (VS) division, which oversees the vehicle components business, posted revenue above 3 trillion won for a second straight quarter and an operating margin of 6.3%. LG Magna e-Powertrain winning multiple electric vehicle powertrain projects in the first half from major automakers in Europe and Asia contributed to growth. The Energy Solution (ES) division, which oversees the HVAC business, also expanded results, centered on overseas air-conditioner sales and the AIDC cooling business.
◇ Expanding cooperation with Nvidia on robots, cooling and mobility
Based on improved profitability in its existing businesses, LG Electronics is moving to expand new AI businesses. Its key partner is Nvidia. The two companies are conducting joint projects across physical AI, including robots for manufacturing sites, AIDC and mobility.
Kim Chang-tae, chief financial officer (CFO, executive vice president) of LG Electronics, said, "In robots, we are pushing joint projects to apply robots for manufacturing sites in the real world by combining LG Electronics' hardware technologies and manufacturing capabilities with Nvidia's Digital Twin technology stack."
In AIDC, Nvidia's integrated platform is being linked with LG Electronics' infrastructure solutions. The companies are also jointly developing high-density cooling technologies to handle heat generated by high-performance AI Semiconductor. In mobility, hands-on cooperation between the two companies' engineering teams has begun to review technologies for next-generation high-performance computing platforms and to build development environments.
◇ Targeting AIDC cooling orders worth trillions of won within the year… robots to contribute to results in 2030
LG Electronics secured 600 billion won in orders in the AIDC cooling business in the first half of the year. It aims to secure new orders worth trillions of won by year-end. In North America, it will target hyperscalers and colocation providers; in Asia, it will target big tech and regional colocation providers. It plans to broaden the scope of orders with integrated cooling solutions that combine liquid-cooling components such as chillers and cooling distribution units (CDU).
Nvidia's quality certification is cited as a result that underpins this order expansion. LG Electronics recently became the first Korean company to obtain Nvidia's final quality certification for a 600 kW-class CDU. It is also pursuing additional certifications for 1 MW, 2.5 MW and 4 MW models.
The company plans to nurture the robot business to a scale that will meaningfully contribute to companywide performance around 2030. LG Electronics cited a "customer-tailored physical AI solution" that bundles finished goods robots and core components such as actuators, a data platform, AI agents and a robot operating system as the key competitive edge for business expansion. In the first half, it built a pilot actuator production line at the Changwon plant and is currently producing initial volumes. While verifying mass-producibility and quality stability, it is also pursuing joint development and order-taking activities with startups and major robot companies in Korea, Europe and North America.
Kim said, "LG Electronics and Nvidia share the view that, at a major inflection point in the market called physical AI, there is a need to cooperate across various areas based on each company's core competencies," adding, "We can fully consider a strategic partnership at the platform ecosystem level going forward."