LG Electronics Inc. is expected to make inroads into the burgeoning private fifth-generation (5G) network market that will help strengthen its business-to-business (B2B) services by selling network equipment and logistics robots to operators of smart factories and distribution centers on a turn-key basis.
According to multiple industry sources on Sunday, LG Electronics has decided to propose the agenda of adding key communications business to its article at the upcoming shareholders’ meeting on March 27. The South Korean tech company is also preparing to seek approval from the Ministry of Science and ICT to become a private 5G network operator.
The 5G-specialized network, or private 5G network, is an internal network that is created separately by a business entity that needs 5G integrated service apart from the existing public networks operated by mobile carriers.
For companies to use the 5G network for industrial use in factories and buildings, they had to borrow the network from the three wireless carriers. This led to severe communications disruptions and poor security.
LG Electronics’ move toward the private 5G business is aimed at expanding its robot business in which the company has selected as a new growth engine. LG Electronics entered into the robot industry in 2018 by acquiring Robostar Co., a manufacturer of industrial robots. It continued to invest in several startups, including SG Robotics, Acryl, and Bossa Nova.
Robostar produces vertical multi-joint robots used in manufacturing facilities for displays and semiconductors. Many Robostar products are used in LG Electronics’ intelligent factories such as the LG Smart Park in Changwon, South Gyeongsang Province.
A comprehensive control system is essential at factories and distribution centers for the flawless operations of hundreds of robots. Having a private 5G network enhances efficiency in the operations.
LG Electronics has the capacity to operate the private 5G network. The company has secured many telecom-related patents when it folded its smartphone business in 2021. Of the 30,000 5G-related patents, 10,000 are classified as “Class A” patents. Industry insiders note that LG Electronics will internalize and produce equipment and control systems based on its network capacity.
It is highly likely that LG Electronics’ first 5G private network location will be the home appliance factory in Tennessee in the U.S. The factory, which manufactures 1.2 million washing machines annually, has 160 automated logistics robots that carry products and assemble driving parts. LG Electronics plans to raise the rate of automation to more than 70 percent through the private 5G network.
The joining of LG Electronics is expected to intensify competition in the global private 5G network market that is projected to reach $41 billion in 2030. Its biggest local rival is Samsung Electronics Co., which established a specialized 5G network for Naver Corp.’s second headquarters in Bundang District in Seongnam, Gyeonggi Province, last year.
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LG Electronics‘ automated logistics robots at home appliance factory in Tennessee in the U.S. [Photo provided by LG Electronics]