South Korea HVAC Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 10.04 Billion |
| Market Size (2029) | USD 13.94 Billion |
| CAGR (2024 - 2029) | 6.79 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
South Korea HVAC Market Analysis
The South Korea HVAC Market size is estimated at USD 10.04 billion in 2024, and is expected to reach USD 13.94 billion by 2029, growing at a CAGR of 6.79% during the forecast period (2024-2029).
- HVAC equipment is necessary for maintaining a comfortable environment within industrial, residential, and commercial buildings. For instance, these systems are commonly found in office spaces to regulate temperature and ensure proper ventilation, ultimately enhancing employee efficiency and well-being while reducing potential health hazards associated with poor humidity control.
- The South Korean HVAC market is anticipated to experience significant growth in the coming years owing to rising disposable incomes, expanding construction activity, and a greater emphasis on energy efficiency.
- In 2023, the Construction Association of Korea reported that the value of domestic construction orders from private owners in South Korea reached about KRW 125.5 trillion (USD 0.091 trillion), making private owners the primary contributors to the total value of construction orders received. The total value of domestic construction orders was approximately KRW 190 trillion (USD 0.14 trillion).
- Furthermore, the government's rising initiative to increase the private housing sector is expected to drive the country's demand for HVAC equipment and services. For instance, in September 2023, the South Korean government plans to provide an additional 120,000 public homes on top of the current initiative to construct 2.7 million new homes by 2027 to counteract the decrease in private-sector home supply due to increased lending rates.
- An HVAC system comprises various components, including home size, HVAC type, brand, labor expenses, climate, ductwork size, and energy efficiency. These components result in a significant overall cost, which hampers the market’s growth.
- The HVAC market in South Korea is fragmented, with a large number of players occupying a small market share. Prominent vendors operating in the HVAC market are focusing on new product development, strategic partnerships, acquisition, and expansion to meet the growing customer demand, further supporting the market’s growth.
- Moreover, ground source heat pumps (GSHP) are gaining popularity in South Korea for both space heating and cooling. With the country's limited availability of high-temperature geothermal energy sources, the primary direct geothermal uses are public baths (25-40°C) and geothermal heat pumps (~15°C) that utilize low-temperature groundwater or ground sources.
- In March 2023, South Korean researchers successfully developed a heat trading system for district heating during peak solar production hours. This innovative system includes a ground-source heat pump, solar thermal collectors, a fuel-cell system, and two heat storage tanks. These advancements are expected to contribute to the market's growth.
- Moreover, the HVAC market in South Korea is highly affected by macroeconomic factors such as government regulations and new initiatives to boost the adoption of energy-efficient equipment. In addition to this, the increase in inflation typically results in higher expenses for materials, labor, and energy in the production and installation of HVAC systems, often resulting in higher prices for new installations.
South Korea HVAC Market Trends
HVAC Equipment Segment Holds Significant Market Share
- Ventilation systems like air handling units (AHUs) are frequently utilized in spacious establishments that numerous individuals, such as shopping malls, frequently visit. These establishments are required to adhere to stringent regulations regarding the removal of carbon dioxide and the maintenance of air quality. A significant volume of fresh air must be introduced into the building to ensure proper ventilation, necessitating multiple blower fans for air circulation. However, the need for many blower fans can be significantly reduced by utilizing air handling units to bring in outside air.
- Ventilation systems are capable of eliminating harmful air pollutants that may cause a range of illnesses and respiratory issues, including lung cancer, ischemic heart disease, asthma, and chronic obstructive pulmonary disease. Furthermore, the increasing need for efficient air conditioning systems in commercial structures, coupled with the emergence of eco-friendly buildings and intelligent cities, is anticipated to affect the market positively.
- Moreover, a heat pump is a significant HVAC equipment that utilizes work to transfer heat from a colder area to a hotter area by transferring thermal energy through a refrigeration cycle. This process cools the colder area while warming the hotter area. During chilly weather, a heat pump can extract heat from the cold outdoors to warm a house. Conversely, in warmer weather, the pump can be designed to transfer heat from the house to the warmer outdoors. Due to their ability to transfer heat instead of generating it, heat pumps are more energy-efficient compared to alternative methods of heating or cooling a residence.
- In response to the growing trend, many companies are introducing various products to cater to the needs of the commercial, industrial, and residential HVAC equipment sector. For instance, in October 2023, Panasonic developed an advanced central heat pump system specifically engineered to provide heating and cooling for residential areas. This latest offering comes in two distinct models: the Interios Low-Carbon Hybrid Heating System and the Interios All-Electric Central Heat Pump System.
- South Korea's construction industry is experiencing rapid growth. Both the public and private sectors are adopting green building practices, creating a substantial opportunity for HVAC services and equipment. In 2023, the construction sector in South Korea contributed around KRW 89.5 trillion (USD 65 billion) to the gross domestic product (GDP), as stated by the Bank of Korea.
Residential Segment Holds Significant Market Share
- The demand for HVAC equipment and services in South Korea's residential sector is increasing due to the government's growing financial backing for sustainable community development, which is expected to contribute to the growth of energy-efficient HVAC systems. Moreover, the surge in air pollution and rapid urbanization drive the country's demand for heating, air conditioning, and ventilation systems.
- In July 2024, the Korea Land and Housing Corporation (LH) revealed plans to commence the construction of 50,000 public houses this year, followed by 60,000 next year. With housing prices on the rise, particularly in the metropolitan area, the government aims to swiftly boost the supply of public housing to alleviate market instability.
- Similarly, in March 2024, the South Korean government committed to allocating a total of KRW 10 trillion (USD 7.46 billion) for revitalizing housing in older urban areas of Seoul. Traditional single-family homes, known as "dandok jutaek," and low-rise apartment complexes, referred to as "villa," will be replaced with modern structures. To support this initiative, half of the development costs will be covered by low-interest loans provided to developers by the state-owned Korea Housing and Urban Guarantee Corp.
- Additionally, the government plans to offer subsidies for constructing community facilities, including parking lots, security systems, and fitness centers, to enhance the quality of life in these neighborhoods. Such government initiatives will increase the demand for HVAC equipment and services in the country.
- Moreover, the increasing demand for high-tech, energy-efficient, and high-performing HVAC systems is driven by homeowners who understand these superior systems' benefits. These informed customers value the importance of investing in systems that ensure better comfort, superior indoor air quality, and significant energy savings.
- Moreover, the Ministry of Land, Infrastructure, and Transport (South Korea) reported that in 2023, there were more than 4.5 million units of residential buildings in South Korea. The data indicated a minor rise in comparison to 2022. Residential buildings constituted approximately 62% of all buildings during that period.
South Korea HVAC Industry Overview
The South Korea HVAC market is fragmented and consists of several players. Companies in the market continuously try to increase their market presence by introducing new products, expanding their operations, or entering into strategic mergers and acquisitions, partnerships, and collaborations. Some of the major players include Panasonic Corporation, Mitsubishi Electric Corporation, LG Electronics Inc., Carrier Corporation, Johnson Controls International PLC, and many more.
• In May 2024, LG Electronics announced to host the inaugural LG HVAC Consultant Leaders' Summit – LG Alumni Event – in Seoul, South Korea. The summit provides heating, ventilation and air conditioning (HVAC) consultants from across Asia, with the valuable opportunity to benefit from LG's extensive industry insight and to learn more about its advanced technologies. Through this event the company will bloster its leadership in the Asia region, for rapidly-expanding HVAC market.
• In May 2024, Midea introduced the EVOX G3 heat pump system. This new iteration of the EVOX series consists of the EVOX G3 Heat Pump and EVOX G3 Air Handling Unit (AHU). Available in sizes ranging from 1.5-ton to 5-ton units, the Midea EVOX G3 heat pumps are equipped with Enhanced Vapor Injection (EVI) technology and a multi-layer heat exchanger, guaranteeing reliable warmth without the need for auxiliary heat, even in extreme weather conditions.
South Korea HVAC Market Leaders
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Johnson Controls International PLC
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Carrier Corporation
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LG Electronics Inc.
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Mitsubishi Electric Corporation
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Panasonic Corporation
*Disclaimer: Major Players sorted in no particular order
South Korea HVAC Market News
- In March 2024, Panasonic Corporation announced that its Heating & Ventilation A/C Company (HVAC) plans to launch three new commercial air-to-water (A2W) heat pumps that utilize environmentally friendly natural refrigerants. These models are designed for use in multi-dwelling units, stores, offices, and other light commercial properties. With their compact designs, they are positioned at the top of the industry and are expected to expand the company's lineup of models for standalone homes to meet growing customer needs.
- In November 2023, Mitsubishi Electric Corporation announced that it has developed an aluminum vertical flat tube (VFT) design that improves heat exchanger performance by up to an unprecedented 40% in heat-pump air conditioners used for heating and cooling. Compared to conventional aluminum horizontal flat tube (HFT) heat exchangers, Mitsubishi Electric's new VFT heat exchanger also reduces refrigerant charge thanks to up to 20% smaller internal volume than HFT designs.
South Korea HVAC Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Suppliers
4.2.2 Bargaining Power of Consumers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Impact of COVID-19 Aftereffects and Other Macroeconomic Factors on the Market
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Supportive Government Regulations Including Incentives for Saving Energy through Tax Credit Programs
5.1.2 Increasing Demand For Energy Efficient Devices
5.1.3 Increased Construction And Retrofit Activity To Aid Demand
5.2 Market Challenges
5.2.1 High Initial Cost of Energy Efficient Systems
6. MARKET SEGMENTATION
6.1 By Type of Component
6.1.1 HVAC Equipment
6.1.1.1 Heating Equipment
6.1.1.2 Air Conditioning /Ventilation Equipment
6.1.2 HVAC Services
6.2 By End User Industry
6.2.1 Residential
6.2.2 Commercial
6.2.3 Industrial
7. COMPETITIVE LANDSCAPE
7.1 Company Profiles*
7.1.1 Johnson Controls International PLC
7.1.2 Carrier Corporation
7.1.3 Robert Bosch GmbH
7.1.4 Daikin Industries, Ltd.
7.1.5 Midea Group Co., Ltd.
7.1.6 System Air AB
7.1.7 LG Electronics Inc.
7.1.8 Mitsubishi Electric Corporation
7.1.9 Danfoss A/S
7.1.10 Lennox International Inc.
7.1.11 Hitachi Ltd.
7.1.12 Panasonic Corporation
8. INVESTMENT ANALYSIS
9. FUTURE OF THE MARKET
South Korea HVAC Industry Segmentation
Heating, ventilation, and air conditioning (HVAC) is a technology that ensures indoor and vehicular comfort by regulating thermal conditions and maintaining acceptable indoor air quality.
The study tracks the revenue accrued through the sale of HVAC equipment and services by various players in the South Korean market. The study also tracks the key market parameters, underlying growth influencers, and major vendors operating in the industry, which supports the market estimations and growth rates during the forecast period. The study further analyses the overall impact of COVID-19 aftereffects and other macroeconomic factors on the market. The report’s scope encompasses market sizing and forecasts for the various market segments.
The South Korean HVAC market is segmented by components (HVAC equipment [heating equipment and air conditioning/ventilation equipment] and HVAC services) and by end-user industry (residential, commercial, industrial). The market sizes and forecasts are provided in terms of value (USD) for all the above segments.
| By Type of Component | ||||
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| HVAC Services |
| By End User Industry | |
| Residential | |
| Commercial | |
| Industrial |
South Korea HVAC Market Research FAQs
How big is the South Korea HVAC Market?
The South Korea HVAC Market size is expected to reach USD 10.04 billion in 2024 and grow at a CAGR of 6.79% to reach USD 13.94 billion by 2029.
What is the current South Korea HVAC Market size?
In 2024, the South Korea HVAC Market size is expected to reach USD 10.04 billion.
Who are the key players in South Korea HVAC Market?
Johnson Controls International PLC, Carrier Corporation, LG Electronics Inc., Mitsubishi Electric Corporation and Panasonic Corporation are the major companies operating in the South Korea HVAC Market.
What years does this South Korea HVAC Market cover, and what was the market size in 2023?
In 2023, the South Korea HVAC Market size was estimated at USD 9.36 billion. The report covers the South Korea HVAC Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the South Korea HVAC Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
South Korea HVAC Industry Report
Statistics for the 2024 South Korea HVAC market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. South Korea HVAC analysis includes a market forecast outlook for 2024 to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
