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On Thu, 19 Sept, 8:03 AM UTC
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Lenovo Expands AI Server Production in India, Targets Major Exports to Asia-Pacific - Lenovo Gr (OTC:LNVGY)
Lenovo opens a new R&D lab in Bengaluru, boosting its AI server capabilities, aiming to produce 50,000 units annually. Lenovo Group Ltd LNVGY has started making artificial intelligence servers at its Puducherry facility in India to diversify its manufacturing facilities away from Taiwan. Lenovo has also opened a new Research and Development (R&D) lab in Bengaluru, joining its global network of 18 R&D labs. The facility can produce 50,000 enterprise AI rack servers and 2,400 advanced GPU units annually, the Firstpost reports. Lenovo looks to export over 60% of the servers produced at this facility to Asia-Pacific. The AI server market was worth $38.3 billion in 2023 and, according to Global Market Insights, could report an 18% CAGR between 2024 and 2032, backed by the adoption of AI across various industries. In 2023, Lenovo announced a $1 billion investment between fiscal 2023 and 2025 to accelerate AI deployment. However, a significant event had a major impact on the AI server market. Critical AI server company Super Micro Computer, Inc SMCI was scrutinized after a Hindenburg report flagged accounting malpractices, sanctions evasion, and more. The stock plunged 30% in the last 30 days as multiple analysts downgraded the rating. Earlier in 2024, KeyBanc analyst Thomas Blakey expected Super Micro Computer to reach a 23% share of the AI server market in calendar 2024. Goldman Sachs analyst Michael Ng and JP Morgan analyst Samik Chatterjee called out Dell Technologies Inc's DELL AI server margins, signaling the upside thereof. Photo by Robert Way via Shutterstock Market News and Data brought to you by Benzinga APIs
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Lenovo turns to India as source of AI servers
Another win for the Make In India policy, but a small one in terms of product volume Lenovo revealed on Tuesday that it will manufacture AI servers at its plant in Puducherry, India, and has opened a new infrastructure research and development lab in Bengalaru. The Puducherry facility has the capacity to produce 50,000 units that Lenovo has described as "enterprise AI rack servers," plus "2,400 high-end GPU units" each year. The Chinese PC giant hasn't revealed the specs of the rack-mounted servers, but described the high-end machines as packing eight GPUs apiece. Sixty percent of the servers are slated for export across the Asia Pacific region. "Lenovo is super-charging its supply chain to not only serve domestic demand but also account for potential expansion into overseas markets," declared [PDF] the hardware maker. The Bengalaru R&D center is one of four such facilities. The others are located in Beijing, Taipei, and Morrisville, North Carolina. Lenovo reckons it will be "pivotal in the system design, development, and testing of next-generation server platforms, including hardware, firmware, and software development." Lenovo predicted "all future mainstream server design, developments, and new technical initiatives will be conducted at this lab." According to Lenovo, the two facilities further solidify its "commitment to India by creating thousands of economic opportunities in the high-technology skills domain." Lenovo's presence in India is not new. It opened its Puducherry facility in 2005 and claimed it produced over seven million devices in India during the year ending March 31, 2024. Motorola Mobility, which Lenovo has owned since buying it from Google in 2014, has also operated in India for around ten years. India has sought to boost domestic manufacturing through its "Make in India" campaign, launched in 2014. The initiative has included reforms in policy, tax incentives, subsidies, and simplified investment procedures. That plan appears to be working as Foxconn, HP, Cisco, Acer, Asus and Dell have all moved some manufacturing work to India in the last couple of years. Their motivation appears to be tapping into a growing domestic market, and diversifying their operations to preventdisrupted supply chains that became an issue during the COVID-19 pandemic. Geopolitics is another consideration, as the USA is discouraging investment in and engagement with China, making reliance on Middle Kingdom manufacturers riskier. Global server sales are forecast to top 12 million this year, so the 52,500 machines Lenovo will build in India aren't a massive contribution to the market. But AI servers are So Hot Right Now, so Lenovo's move will be welcome in India - even if the volume of kit the Chinese company makes there is small, and Lenovo's roots in IBM means it is no stranger to manufacturing outside China. ®
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Lenovo expands its AI server manufacturing capabilities in India, targeting significant exports to the Asia-Pacific region. The move aligns with India's push to become a global electronics manufacturing hub.
Lenovo, the global technology giant, has announced a significant expansion of its artificial intelligence (AI) server production capabilities in India. This move comes as part of the company's strategy to capitalize on the growing demand for AI infrastructure in the Asia-Pacific region and aligns with India's ambitions to become a major electronics manufacturing hub 1.
The expanded facility, located in Pondicherry, is set to manufacture a wide range of Lenovo's ThinkSystem servers, including the latest models designed for AI workloads. With this expansion, Lenovo aims to produce up to 400,000 servers annually, targeting 40% of its output for export to countries in the Asia-Pacific region 2.
Lenovo's expansion is being supported by the Indian government's Production Linked Incentive (PLI) scheme, which offers financial incentives to companies manufacturing electronics in India. This aligns with Prime Minister Narendra Modi's 'Make in India' initiative, aimed at transforming the country into a global manufacturing powerhouse 1.
The move positions Lenovo to compete more effectively with other major players in the AI server market, such as Dell and HPE. By localizing production in India, Lenovo can potentially offer more competitive pricing and faster delivery times to customers in the region 2.
Lenovo's expanded operations are expected to create numerous job opportunities in India's technology sector. The company plans to employ over 1,500 people directly and indirectly through this initiative, contributing to the local economy and skill development 1.
The new facility will focus on producing Lenovo's latest AI-optimized servers, including models equipped with NVIDIA H100 Tensor Core GPUs. These high-performance servers are designed to meet the growing demand for AI and machine learning capabilities across various industries 2.
By expanding production in India, Lenovo aims to enhance its supply chain resilience. This strategy could help the company mitigate risks associated with geopolitical tensions and global supply chain disruptions that have affected the tech industry in recent years 12.
Lenovo's investment in India reflects the country's growing importance in the global tech manufacturing landscape. As demand for AI infrastructure continues to rise, this expansion could position both Lenovo and India as key players in the AI server market for the Asia-Pacific region and beyond 12.
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Lenovo, the Chinese tech giant, is strengthening its foothold in India by launching AI server manufacturing and opening a new R&D facility. The company aims to boost local production, expand its product portfolio, and contribute to India's tech ecosystem.
19 Sources
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Lenovo India reports significant revenue growth, announces plans to develop next-generation AI technologies, and unveils its hybrid AI strategy at Tech World India 2025.
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Lenovo reports strong Q2 FY2025 results, crediting its hybrid AI strategy for growth across PC, data center, and solutions businesses. The company plans global expansion and bets on AI-enabled devices for future growth.
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