Lenovo begins manufacturing AI servers in India

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Lenovo begins manufacturing AI servers in India

Lenovo begins manufacturing AI servers in India

Industry News
Sep 19,24

The production line at Lenovo's Puducherry facility, operational since 2005, will cater to both local and international markets.

Lenovo begins manufacturing AI servers in India

Lenovo Group has started manufacturing artificial intelligence (AI) servers in India, with an annual capacity to produce 50,000 enterprise AI rack servers and 2,400 graphics processing units (GPUs). This move follows the company's three-year, $1-billion investment in AI, announced last year to develop AI platforms, computing devices, and servers.

The production line at Lenovo's Puducherry facility, operational since 2005, will cater to both local and international markets. Approximately 60% of the production capacity is designated for exports across the Asia-Pacific region. This initiative positions Lenovo as one of the first companies to manufacture AI servers in India under the government's incentive scheme, making the country an alternative manufacturing hub to China and Taiwan for high-end IT hardware.

AI servers are expected to be in high demand in the coming years due to the growing use of generative AI, which requires substantial computing power provided by data or AI servers. Lenovo's manufacturing plans align with the Indian government's production-linked incentive (PLI) scheme for IT hardware. Lenovo was among the first beneficiaries of this scheme and is actively building technology transfer capabilities with its ODM partner, Dixon Technologies.

Lenovo acquired Motorola in 2014, and Noida-based Dixon Technologies manufactures Motorola smartphones locally. Lenovo has been manufacturing products in India for two decades and is now focusing on localizing component production, with at least 40% of the components used in its phones being made in India. The company aims to further increase product localization as it anticipates significant growth driven by technology.

Lenovo has also launched its infrastructure research and development (R&D) lab in Bengaluru, one of four globally dedicated to infrastructure solutions. With a global R&D spend of $2.3 billion for FY24, Lenovo is intensifying its focus on R&D and engineering, partly to meet the rising demand for AI.

"As we enter the AI decade, these investments are critical to delivering best-in-class AI infrastructure and large language model solutions that meet the evolving needs of our customers," said Amit Luthra, Managing Director, Lenovo ISG India.

(Mint)