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Lenovo Explores Server Manufacturing in India Amid PLI Scheme

Lenovo explores manufacturing servers in India under the PLI scheme, aligning with the growth of its data center solutions business and leveraging India's skilled workforce and market potential.

Lenovo, the Chinese tech giant known for laptops, tablets, and smartphones, including Motorola devices, is considering the production of servers in India to leverage the government's production-linked incentive (PLI) scheme for IT hardware. This move comes amidst regulatory pressures in the US.

Vlad Rozanovich, Senior Vice President of Infrastructure Solutions Group at Lenovo, revealed the company's intention to align server manufacturing with the growth of its data center solutions business, anticipating double-digit growth in its infrastructure solutions group (ISG) vertical.

Lenovo aims to boost local manufacturing in India, which it deems a top-priority market globally, citing factors like connectivity-driven growth opportunities and a highly skilled workforce.

Matthew Zielinski, President of International Markets at Lenovo, emphasized India's strategic importance, attributing it to the country's growth potential, connectivity, and talented workforce. The company currently employs 1,700 individuals in India across three manufacturing sites.

Since acquiring Motorola in 2014, Lenovo manufactures desktops, personal computers, and Motorola smartphones locally, with Motorola benefiting from India's PLI scheme for mobile phone manufacturing.

Shailendra Katyal, Lenovo's India Managing Director, highlighted India's increasing contribution to the global PC market, surpassing Japan in total addressable market size. With home PC penetration at 10-12%, Katyal anticipates further sales growth.

According to the International Data Corporation, Lenovo held the second-largest share (17%) in the PC market in July-September 2023, with HP Inc. leading at 29.4%.

Amidst government initiatives and geopolitical tensions, Apple has shifted some iPhone production to India, aiming to produce iPhones worth INR 1 lakh crore by March 2024. Similarly, Xiaomi, currently manufacturing wireless audio products in India, is reportedly considering smartphone production in the country. Google has also announced plans to produce Pixel smartphones in India.

Lenovo's exploration of server manufacturing in India reflects a broader trend of tech companies leveraging local incentives and market opportunities, underscoring India's growing importance in the global technology landscape.