Lenovo, a manufacturer of personal computers (PCs), intends to use the Production-Linked Incentive (PLI) program for IT gear to begin producing servers domestically to support its data center business.
India is a “top priority” foreign market for the corporation, which intends to use it as a hub for PC and smartphone manufacture before exporting to other markets. By utilizing regional IT expertise, it also hopes to export solution-based services from India.
“We have 35 manufacturing sites around nine countries in the world, India being one of them. We are constantly looking at ways to swizzle that dynamic, whether it’s for economic reasons, logistics reasons, or sustainability reasons, to try to ensure that we’re building products closest to customers,” Matthew Zielinski, President of International Markets at Lenovo, stated during the yearly tech event in New Delhi.
)
Lenovo, which manufactures PCs and smartphones at three locations in India, is increasing its export capacity to reach new markets.
“We want to utilise India’s broader manufacturing sites to continue to export products throughout the world,” he continued.
“There’s so much data centre-type business that goes on here (India)…over the next few years, we need to ramp up our manufacturing capabilities around data centre products, specifically high-end GPU-related products,” he continued.
India launched an import management system for IT hardware products on November 1, 2023, which permits businesses to import goods including servers, laptops, tablets, and all-in-one PCs without any limitations for a year. After November 1, 2024, import restrictions will be imposed yearly in a staggered manner. The purpose of this strategy is to provide enterprises that don’t produce these goods in India enough time to establish local manufacturing capabilities.
Obtaining components locally
Amar Babu, President of Asia Pacific at Lenovo, said that the company has a “clear plan” to double the localisation content for its smartphones in the next couple of years. “We are also looking at working with the industry bodies and the government to see how we can develop the ecosystem, especially for PCs.”
Babu added, “We want to be participating here…we will have to look at all of these as part of our manufacturing strategy in India.”
“We are one of the first vendors to localise motherboard production in India. We are in the initial stages of discussion and working with the government to see whether we can participate in that business,” Babu concluded.
Growth of the PC market in India
India’s share of the worldwide PC market has grown during the past two years. According to Lenovo’s India Managing Director Shailendra Katyal, the country’s PC market is estimated to be worth 14–15 million units annually and has surpassed Japan in terms of total addressable market. He also stated that home penetration, which is currently at 10–12%, will continue to propel PC sales in the future.
“The Indian PC market has been an outlier in the global context, with shipments sharply higher than pre-COVID levels,” Katyal stated.
)
With a 29.4% market share, HP Inc. was in the lead. Lenovo also anticipates that its global sales, including those in India, would be driven by computers with AI capabilities.
“No CIO or CTO want to sign off on a big asset refresh and then be saddled with inventory that is not AI-ready, which is where the hope is that in the second half, even the commercial demand should pick up,” he mentioned.
