A promotional image of LG Electronics Inc.’s world premiere event for CES 2025 to take place in Las Vegas on Jan. 6, 2025, provided by the company. (Image courtesy of Yonhap)
SEOUL, March 17 (Korea Bizwire) — LG Electronics set a new record for research and development (R&D) spending in 2024, investing heavily in AI-driven smart home technology, automotive electronics, and heating, ventilation, and air conditioning (HVAC) systems.
According to LG’s latest business report, the company spent ₩4.76 trillion ($3.28 billion) on R&D in 2024, marking a ₩479.8 billion ($330.9 million) increase (11.2%) from the previous year. The R&D-to-revenue ratio also rose slightly from 5.1% to 5.4%, reflecting LG’s growing focus on next-generation technologies.
Expanding Investments in Key Growth Sectors
LG’s increased R&D spending aligns with its expansion in smart appliances, integrated solutions, and AI-powered personalized home environments. The company is also strengthening its B2B businesses, with automotive electronics and HVAC emerging as key revenue drivers.
In 2025, LG plans to invest ₩4.33 trillion ($2.99 billion) in product quality improvements, model upgrades, and new technology development, a 19.5% increase from 2024.
Planned investments by business division include:
- ₩1.16 trillion ($800.3 million) for home appliances (HS Division)—the largest allocation.
- ₩936.9 billion ($646.1 million) for vehicle component solutions (VS Division).
- ₩377.4 billion ($260.3 million) for TVs (MS Division).
- ₩150.3 billion ($103.6 million) for HVAC systems (ES Division).
- ₩1.71 trillion ($1.18 billion) for R&D and infrastructure development in other sectors.
LG Electronics Unveils Europe-Specific HVAC Solutions at “ISH 2025″ (Image provided by LG Electronics)
Patent Portfolio and EV Production Growth
As of December 2024, LG held 26,566 domestic patents and 69,765 international patents, primarily in smartphones, digital TVs, and other core technologies. These patents are expected to play a critical role in future product advancements.
Despite concerns over a temporary slowdown in EV demand, LG’s vehicle component solutions (VS) division achieved record-high production in 2024, manufacturing 39.91 million units, slightly up from 39.06 million in 2023.
Subscription Business Sees Record Revenue
LG’s subscription services business also posted record-breaking sales, generating ₩1.67 trillion ($1.15 billion) in 2024, a 74% increase from ₩962.9 billion ($664.1 million) in 2023. The company has steadily expanded its rental business since launching water purifier subscriptions in 2009, now covering a wide range of home appliances and service partnerships.
This photo shows LG Display Co.’s 83-inch organic light-emitting diode (OLED) TV panel. (Image courtesy of Yonhap)
Challenges: Rising Logistics Costs and Inventory Build-Up
However, rising logistics costs and sluggish global demand posed challenges for LG in 2024. The company’s shipping expenses surged by ₩446.6 billion ($308.0 million), reaching ₩3.11 trillion ($2.14 billion) due to higher freight costs.
Meanwhile, inventory levels increased by nearly ₩1.6 trillion ($1.10 billion), reaching ₩10.73 trillion ($7.40 billion) as demand for home appliances and TVs softened.
As a result, LG’s 2024 operating profit fell to ₩3.42 trillion ($2.36 billion), down 6.4% from the previous year, reflecting ongoing market uncertainties.
Despite these challenges, LG is doubling down on innovation-driven growth, betting on AI integration, automotive solutions, and subscription services to drive long-term revenue expansion.
The exchange rate used in this article reflects the rate in effect on the date of publication.
Kevin Lee (kevinlee@koreabizwire.com)
