Just use var = var1 var2 and it will automatically concatenate the vars var1 and var2:
awk '{new_var=$1$2; print new_var}' file
You can put an space in between with:
awk '{new_var=$1" "$2; print new_var}' file
Which in fact is the same as using FS, because it defaults to the space:
awk '{new_var=$1 FS $2; print new_var}' file
Test
$ cat file
hello how are you
i am fine
$ awk '{new_var=$1$2; print new_var}' file
hellohow
iam
$ awk '{new_var=$1 FS $2; print new_var}' file
hello how
i am
Concatenating strings in awk can be accomplished by the print command AWK manual page, and you can do complicated combination. Here I was trying to change the 16 char to A and used string concatenation:
I used the substr function to extract a portion of the input (STDIN). I passed some external parameters (here I am using hard-coded values) that are usually shell variable. In the context of shell programming, you can write -v w=$width -v BA=$my_charval. The key is the OFS which stands for Output Field Separate in awk. Print function take a list of values and write them to the STDOUT and glue them with the OFS. This is analogous to the perl join function.
It looks that in awk, string can be concatenated by printing variable next to each other:
echo xxx | awk -v a="aaa" -v b="bbb" '{ print a b $1 "string literal"}'
# will produce: aaabbbxxxstring literal