Lenovo mulls making servers in India

“India is top priority of our international markets for several reasons. The obvious growth enabled by connectivity and being able to further propagate our devices, but we also have an enormously talented workforce in India, and continue to be on a doubling trajectory of jobs here,” said Matthew Zielinski, president of international markets at Lenovo. It has 1,700 employees in India, and three manufacturing sites.

Lenovo acquired Motorola, an American consumer electronics manufacturer, in 2014.

The Chinese technology major makes desktops and personal computers locally, besides all Motorola smartphones sold in India. Exports of mobile phones to North American markets began last year. In November, it launched personal computers whose motherboards were locally made, making it compliant with the government’s preferential market access policy and eligible for bidding for government contracts for personal computers.

“Whether it’s our wholly-owned manufacturing sites or partner sites, our goal is to continue to expand to increase capacity of Motorola, capacity that we would build on the PC side and where it makes sense to export PCs to other parts of the world. We’re starting to discuss producing and manufacturing servers locally, which I think is the next version of the PLI,” he added.

Vlad Rozanovich, president, infrastructure solution group, Lenovo, said that the regulatory changes made by the US that restrict chipmakers such as Nvidia, Intel, and AMD from exporting advanced semiconductor products to China, make India a critical consideration for companies such as Lenovo. Therefore, the company needs to boost its manufacturing capabilities around data centre products, specifically high-end GPU-related products in India, either through manufacturing partners or on its own.

“When we look at our data centre business that is about a $10-billion business, and the growth rates that we have for this business is to really show how do we double that in the next five years. And so as part of that, India becomes a very important partner for us from a manufacturing standpoint,” he added.

The company wants to deepen manufacturing capabilities here to benefit from the standpoints of economics, logistics and sustainability, as it would be able to build products closer to customers.

Lenovo, India’s second-largest PC manufacturer, is planning to bring in more ecosystem players to increase the level of local manufacturing. In smartphones, it’s aiming to double local value over the next two years.

Lenovo has said it will participate in the revamped PLI scheme for IT hardware, by making personal computers locally. Lenovo had announced in December last year that Padget Electronics, a wholly-owned subsidiary of Noida-based contract manufacturer Dixon Technologies, will manufacture its laptops and notebooks.

The announcement followed Indian government’s decision to put in place a graded check on imports of laptops, tablets, personal computers, servers and edge computing devices, from November this year. The IT hardware PLI scheme offers incentives of ₹17,000 crore for the same set of products over the next six years, encouraging companies to move from imports to local manufacturing and eventually exports. Companies opting for the scheme will get an additional optional incentive—of another 3%—if they use India-made and designed components, sub-systems or inputs.

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Published: 08 Feb 2024, 12:19 PM IST