[Exclusive] "No Support in That Case" Spurs Action... Samsung and LG to Relocate China Heat Pump Plants to Korea

Responding to Government's Heat Pump Promotion Policy
President Lee: "We Must Accelerate the Transition to Heat Pumps"
Fierce Competition Expected to Secure Early Lead in the Domestic Market

Samsung Electronics and LG Electronics are relocating their heat pump production lines from China to Korea. This move is seen as a response to the government's policy aimed at promoting the use of heat pumps.

As a result, competition to secure a leading position in the domestic heat pump market, which is expected to expand starting this year, is anticipated to intensify. Interest in heat pumps is also growing due to increasing concerns over the liquefied natural gas (LNG) supply chain following the recent crisis in the Middle East.

According to industry sources on March 31, Samsung Electronics and LG Electronics plan to transfer their heat pump factories from China to Korea.

Samsung Electronics currently produces heat pumps for export and domestic use at its plant in Suzhou, China, but is reportedly planning to relocate its production facilities to its Gwangju site in Korea. LG Electronics is also considering a plan to move its heat pump production line from Tianjin, China, to its Changwon factory in Korea.

Both companies are expected to establish domestic production lines as early as this year. An industry insider explained, "The companies are seriously considering maintaining their Chinese factories for export products, while newly establishing production lines in Korea for the domestic market." Both companies are expected to set up domestic production lines within the year.

LG Electronics is exhibiting high-efficiency heat pumps at 'ISH 2025,' the world's largest heating, ventilation, and air conditioning exhibition held in Frankfurt, Germany in 2025. Photo by Yonhap News Agency

The reason Samsung Electronics and LG Electronics are pursuing the relocation of their production facilities is because the government has decided to provide support only for products manufactured domestically.

On February 4, Kim Sunghwan, Minister of Climate, Energy and Environment, stated at a heat pump stakeholder meeting, "No matter how prominent a domestic conglomerate's product may be, we cannot support products produced in China and re-imported. We must restore the domestic ecosystem, create jobs, and ensure that products made in Korea are used in our homes and buildings." Minister Kim also expressed a negative stance regarding products assembled domestically using imported key components.

As a result, not only large companies like Samsung Electronics and LG Electronics, but also mid-sized companies such as Kyungdong Navien and Daesung Heat Energy, which own domestic heat pump factories, are now faced with the need to strengthen their domestic supply chains.

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A heat pump is a device that utilizes ambient heat sources such as air, geothermal, or water heat to simultaneously provide heating, cooling, and hot water supply. Since it does not directly burn fuel, it does not emit carbon dioxide. Overseas, including in Europe, heat pump adoption is being actively promoted as part of policies to reduce greenhouse gas emissions.

In contrast, Korea has long relied primarily on gas boilers, resulting in low demand for heat pumps. Compared to gas boilers, heat pumps are more expensive to install and also require additional electricity payments. Samsung Electronics and LG Electronics have also focused mainly on the European market.

However, as the government plans to launch a large-scale heat pump distribution program starting this year, relevant companies are responding quickly. In particular, the government's heat pump distribution policy is expected to accelerate due to growing concerns over the LNG supply chain following the recent U.S. invasion of Iran.

President Lee Jaemyung also emphasized at a town hall meeting held in Jeju on March 30 that the energy issues caused by the Middle East war are serious, stating, "We must accelerate the transition to electric vehicles and expedite the switch to heat pumps for heating."

At the town hall meeting "Listening to the Heart of Jeju," held on the 30th at Hallaconvention Center, Jeju Halla University, attendees are listening to President Lee Jae-myung's remarks. March 30, 2026. Photo by the Blue House Press Photographers Group, Yonhap News Agency

This year, the government plans to invest 14.4 billion won of national funds to promote the electrification of heating. The support will mainly target single-family homes equipped with solar panels in warmer regions such as Jeju and Gyeongnam. With the President showing direct interest, the scope and scale of support are expected to expand significantly starting next year.

The supplementary budget approved at the Cabinet meeting on March 31 also included funding for heat pump distribution. The climate ministry explained, "To expand heat pump adoption and convert fossil fuel-based heating to electricity-based heating, 5.6 billion won will be allocated for the residential heating electrification program, and 1.3 billion won for electrification support for social welfare facilities."

The government has also begun institutional improvements to promote heat pump adoption, such as revising the Enforcement Decree of the Renewable Energy Act to include air-source heat as renewable energy. There are also plans to reform the progressive electricity rate system for this purpose.

However, the industry unanimously agrees that more proactive policies from the government are necessary. An industry official stated, "There needs to be an institutional mechanism to expand heat pump distribution to multi-family housing, which accounts for most heating demand in Korea." He added that there should be policies such as mandatory heat pump installation in new multi-family residences.

This content was produced with the assistance of AI translation services.