LG investing in motors, compressors

An LG Electronics employee manufactures a direct drive motor for washing machines, at its factory in Changwon, South Gyeongsang Province, Sunday. The company said it will increase human resources for motor and compressor research by 20 percent this year, as part of its bid to turn the manufacturing facility into a control center for the firm’s home appliance business. / Courtesy of LG Electronics

By Yoon Sung-won

CHANGWON, South Gyeongsang Province ― LG Electronics is pushing to strengthen its motor and compressor business, aiming at solidifying its presence in the home appliances sector.

LG Electronics plans to invest over 200 billion won in building an R&D center and an employee dormitory here by the end of next year.

The company said it will expand the human resources for its motor and compressor R&D sector by 20 percent and double the development budget this year.

“Perspectives on what determines the competitiveness of electronics devices may vary, but in terms of performance and price, motors and compressors are playing a very important role. I would say they will take between 30 and 50 percent in this,” said Park Jung-hyun, vice president of LG Electronics’ compressor and motor business unit, during a press conference at the plant, Sunday. “In the compressor and motor business unit, we already highlight the importance of performance and we make every effort, such as hiring more employees, to boost performance of our products.”

In the first quarter, LG Electronics’ Home Appliance and Air Solution (H&A) division alone posted 4.22 trillion won in sales. Its operating profit reached 407.8 billion won at that time, which is the company’s largest-ever quarterly operating profit.

The nation’s second-largest electronics maker attributed the achievement to the sales of highly profitable premium home appliances including its Signature luxury lineup, Twin Wash drum washer and Whisen dual air conditioners.

LG Electronics attributed the popularity of its home appliances to its highly capable key components ― motors and compressors.

Park said the company is also planning to diversify the application of its motor and compressor technologies.

“Though we are focusing on the application for home appliances at the Changwon plant, we are also cooperating with the vehicle component division in a way that creates greater synergy,” Park said. “We are also working to develop products in new categories such as the clothing management device LG Tromm Styler. We plan the roll out sometime within the year.”

Established in 1976, the city’s first plant has produced refrigerators, water purifiers and compressors. The second plant started operation in 1987, manufacturing washing machines, air conditioners, vacuum cleaners and motors.

LG Electronics’ H&A division has solidified vertical integration from component production to end-product manufacturing. The company stressed that not many electronics makers manufacture motors and compressors for their end products around the globe.

“At the Changwon plants, we have heavily invested in developing motor and compressor technologies, which are essential for home appliances,” said Noh Tae-young, vice president of LG Electronics’ compressor and motor business unit. “Even major global electronics makers, China’s Haier for instance, do not produce compressors by themselves. Motor and compressor technologies need long-term investment and thus are not easily developed in this sector.”

LG Electronics’ compressor and motor business unit started producing motors for fans in 1962. In 1998, it commercialized the world’s first direct drive (DD) motors for washing machines and started mass-producing the world’s first inverter linear compressors in 2001.

Currently the company has a total of seven plants in Korea, China, India and Thailand. It produces 70 percent of its motors and compressors at overseas manufacturing lines. It has manufactured more than 1 billion motors and compressors so far.

LG Electronics has also pushed to secure patent rights in this sector. It has 907 patents regarding its inverter linear compressors in Korea, added to 157 it has in the United States and 33 in Europe. For its DD motor system, it also has a total of 135 patent rights globally.

Tapping into its technological leadership in this sector, LG Electronics is selling its motors and compressors to other end-product makers. It said it has supplied more than one-third of its total compressor output to other companies in the first half of this year.

“We are providing most of the major electronics makers which do not produce compressors by themselves, such as the world’s leading air conditioner maker Carrier,” Noh said.