Chairman Yang stated that Lenovo, which primarily manufactures in China, runs over 30 factories across nine markets. Following a significant investment agreement with Saudi Arabia’s Public Investment Fund, the company is set to establish new facilities in Saudi Arabia.
Amid global geopolitical uncertainties, Lenovo plans to expand its manufacturing facilities outside of China, according to Chairman Yang Yuanqing. Lenovo, the largest PC manufacturer globally, currently has the majority of its plants in China. This common industry practice poses potential vulnerabilities, especially as the US President-elect Donald Trump has threatened to impose tariffs of up to 60% on Chinese imports.
In an interview with Reuters, Yang mentioned that it is too premature to predict the policies of the new US administration. However, he highlighted that Lenovo’s diversified manufacturing base, sourcing strategies, and balanced regional revenue streams provide it with an edge over competitors in mitigating such risks.
Lenovo operates over 30 factories in nine different markets and is set to expand further with new facilities in Saudi Arabia following a significant investment from the kingdom’s Public Investment Fund.
On the financial front, Lenovo reported a 24% increase in revenue for the fiscal second quarter year-over-year, reaching $17.9 billion and surpassing analysts’ expectations of $16.0 billion, as per LSEG data. The company’s net profit for the quarter was $359 million, exceeding the anticipated $331.7 million. Global PC shipments for Lenovo rose 3% to 16.5 million units during the September quarter, maintaining a commanding 24% market share. This growth comes despite a 2.4% decline in global PC shipments, as reported by IDC.
The demand for AI-capable computers is emerging as a significant growth driver in the PC industry. Lenovo launched its first AI-powered PCs in China in May and expanded their availability globally by September. Yang anticipates that AI PCs will constitute 25% of Lenovo’s shipments by 2025, potentially rising to 80% by 2027.
Additionally, Lenovo is capitalising on the AI trend by expanding its AI server and software businesses. The company’s Infrastructure Solutions Group, which includes IT solutions like servers, saw its revenue grow by over 60% year-over-year in the September quarter, driven by robust demand for AI workload servers in data centres. The Solutions and Services Group, covering cloud-based software offerings for enterprise clients, also reported increased revenue, totalling $2.2 billion, up from $1.9 billion a year earlier.
