Lenovo plans local production of servers in India to bolster Lenovo's data center business

Lenovo is strategically planning to commence local production of servers in India, aligning with the country's Production-Linked Incentive (PLI) scheme for IT hardware. The move aims to bolster Lenovo's data center business in India while positioning the country as a pivotal global export hub for the company's PCs and smartphones.

Matthew Zielinski, President of International Markets at Lenovo, emphasized the significance of India as a prime international market for the company. Lenovo intends to leverage India's manufacturing capabilities to cater to global markets efficiently, driven by economic, logistical, and sustainability considerations.

With three existing manufacturing sites in India focusing on PCs and smartphones, Lenovo is expanding its capacity to facilitate exports to newer regions. The company's successful export of Motorola-branded smartphones, totaling around a million units in 2023, highlights its commitment to leveraging India's manufacturing prowess for global outreach.

Vladimir Rozanovich, President of the Infrastructure Solutions Group at Lenovo, underscored India's importance as a manufacturing partner for the company's ambitious growth plans in the data center segment. Lenovo is exploring options, including utilizing existing facilities or forming new partnerships, to initiate local production of servers, particularly focusing on high-end GPU-related products.

The implementation of India's import management system for IT hardware products underscores the country's commitment to fostering local manufacturing capabilities. Lenovo is actively participating in India's revised PLI scheme for IT hardware, further demonstrating its commitment to local production.

Amar Babu, President of Asia Pacific at Lenovo, outlined the company's strategy to enhance localization efforts by sourcing components locally for PCs and smartphones. Lenovo aims to double the localization content for its smartphones in the coming years, fostering collaboration with industry bodies and the government to develop the ecosystem, especially for PCs.

Moreover, Lenovo's compliance with India's preferential market access guidelines and its focus on localizing motherboard production underscore its commitment to India's manufacturing ecosystem.

Shailendra Katyal, Lenovo's India Managing Director, highlighted India's growing significance in the global PC market. With a substantial increase in PC shipments, India's market now surpasses Japan's in terms of total addressable market, driven by increasing home penetration.

Lenovo's strong market position, evidenced by its second-largest share in the Indian PC market, underscores its potential for further growth, particularly driven by Artificial Intelligence-enabled PCs. The company is actively engaging with software developers and enterprises to capitalize on AI-driven demand in commercial and gaming PC segments, anticipating a surge in demand as AI technology matures.