Carrier's $600m chiller factory will arrive after a surge in orders
Carrier's second-quarter orders rose about 40%, while organic sales rose 3%. Its new factory will add capacity for 3,000 air cooled chillers a year, starting in the second half of 2027.
Carrier will spend more than $600 million on a new chiller factory in Fort Worth, Texas. Its first lines will not run until late summer 2027.
The timing leaves Carrier waiting for new capacity. Orders for large commercial cooling are running far ahead of what Carrier's plants ship, and the new factory answers them late. The resulting risk falls on profit margins rather than sales volume.
Carrier's own second quarter shows the gap. Total orders rose about 40% and Commercial HVAC orders about 65%, while organic sales rose 3%, according to its second quarter results.
Orders are commitments and sales are deliveries. When orders run far ahead, the gap piles up as backlog, meaning orders accepted but not yet shipped.
Carrier's orders rose about 40 percent in the second quarter and commercial HVAC orders about 65 percent, while organic sales rose 3 percent, so the order book is growing far faster than deliveries.
View data
| Measure | Growth on a year earlier, percent |
|---|---|
| Total company orders (about) | 40 |
| Commercial HVAC orders (about) | 65 |
| Organic sales | 3 |
Orders are building ahead of deliveries
That backlog was already large in the spring. Carrier's first quarter results said it "fully covers expected 2026 data center sales". Data centre orders were up over 500% then, and more than 300% in the second quarter.
Carrier did not blame capacity for its weak spot. Commercial sales in its Americas segment fell 8% in the second quarter. Carrier put that down to "the timing of customer deliveries" and did not cite its factories.
The longer run is different. The Wall Street Journal reported that chief executive Dave Gitlin said: "We cannot keep up without building this additional facility." He also said: "We have significant demand over the next two years."
Those statements are compatible. The backlog already covers 2026 data centre sales, and the new lines start only in late summer 2027. Fort Worth can therefore serve only the back half of that two year demand, with the old plants carrying the backlog until then.
What Fort Worth will add
Carrier's announcement says operations begin in 2027. The facility covers more than 1 million square feet, will make air and water cooled commercial chillers and will create 1,500 jobs.
Gitlin said the plant will build 3,000 air cooled chillers a year, enough to cool a million homes. The company wants three or four lines running by late summer 2027.
The report says the plant should boost chiller capacity "by more than two times the current capacity" of its North Carolina and Mexico plants. A single data centre can need hundreds of chillers, so 3,000 a year serves a limited number of sites. A data hall that opens before late summer 2027 will be served by the old plants.
The plant sits in AllianceTexas, a 27,000 acre development in north Fort Worth. The shell should be finished in a few months, and Carrier also plans to make components such as compressors there.
Carrier expects the plant to help against rivals Trane Technologies and the York brand of Johnson Controls. Carrier says the investment "furthers Carrier's commitment to domestic manufacturing". Gitlin said the company weighed several sites in Texas and Alabama.
Gitlin said Fort Worth is close to many large commercial customers and has a deep pool of construction workers and skilled technicians. The release adds that Fort Worth has a strong manufacturing base. The site will pursue LEED certification, a green building rating.
The size of the investment
Carrier's yardstick for the cost is its own capital spending. The release says it will invest over the next three years, which is about $200 million a year.
Carrier's 2025 capital expenditure, in its annual report, was $392 million. So each year of the plant adds roughly half again to its yearly spending.
Capital spending is already rising. It was $211 million in the first half of 2026 against $144 million a year earlier. The release does not say how much of the $600 million counts as capital spending or how it is phased.
Against sales the plant looks modest. At $200 million a year it equals about 10% of the roughly $2 billion of data centre equipment sales Carrier expects this year. Carrier said those sales are on course to double for the second straight year.
The plant is also under 1% of the roughly $23 billion of total sales in Carrier's raised outlook. The scale suggests a focused investment in one business line within the wider company. The report calls the plant the biggest investment in Carrier's history.
The plant is not a pure bet on artificial intelligence. The release names data centers, healthcare, education, industrial markets "and other key verticals" as sources of its record backlog. The report adds hospitals, semiconductor plants and schools.
Commercial should reach close to 40% of Climate Solutions Americas sales this year, up from about 30% traditionally. Climate Solutions Americas is Carrier's largest segment. Gitlin expects commercial to eventually exceed residential, and large commercial sales have grown about 25% a year recently.
The margin risk
The exposure is margin. In the second quarter Climate Solutions Americas earned an operating margin of 24.4% against 27.0% a year earlier, a drop of 2.6 percentage points. Carrier said price helped but unfavourable mix and input costs hurt.
That drop is not a capacity effect. Carrier cited price, mix and input costs for the quarter. A factory that opens in 2027 will carry costs for new staff and lines before it carries volume. If orders fade after 2028, the underused capacity lands on the margin first, a risk that will not show in the order numbers.
Carrier may be building at the peak, because orders are not sales and plants take years. Air cooled chillers also serve hospitals, schools and industrial sites, which spreads the risk. That leaves profit margins more exposed than sales volume.
Carrier reports third quarter results at 7:30 a.m. Eastern on 29 October, according to its earnings advisory. The number to watch is Commercial HVAC orders against commercial sales.
In the second quarter Commercial HVAC orders rose about 65% while Americas commercial sales fell 8%. If orders stay far ahead of deliveries, the backlog is still building while the plant is a shell.