Lenovo To Expand Manufacturing Capacity, Begin Laptop Exports In 2 Years

Smart devices maker Lenovo plans to expand production capacity of Motorola mobile phones and laptops to meet domestic requirements as well as serve export markets, senior company officials said on Wednesday.

Speaking with reporters at Lenovo Tech World event here, the company's executive vice president and president for international markets, Matthew Zielinski, said that the company also has plans to make servers in India.

"Our goal is to continue to expand capacity, increase capacity on the PC side. It also makes sense to export PCs to other parts of the world (from India). Then the third part is producing and manufacturing servers locally which I think is the next version of the PLI 3.0 that we're currently exploring," Zielinski said.

He was responding to a question on the export potential of Lenovo products from India.

At present, Lenovo's mobile phone division Motorola exports devices from India. The company has a laptop manufacturing unit in Chennai from where it meets 35% of its India sales requirement.

Lenovo India Managing Director Shailendra Katyal said that the company plans to increase production capacity for local consumption and start exports over time.

When asked about estimated timelines for the laptop's export, he said that the company expects to be ready for export in 1-2 years. Even for the servers, Katyal said that the company may start making them in India within 1-2 years.

Katyal said that the company's focus is on increasing domestic value addition and its desktop PC has already qualified for preferential market access (PMA) rules in terms of local value addition.

Lenovo SVP and President, ISG, Vlad Rozanovich said that India is known as a back office to the world and there is a large data centre business in the country. He said that there are restrictions by the U.S. government that allow Nvidia, AMD and Intel to ship to certain markets.

"When we look at the India market, we know we need to ramp up our manufacturing capability around data centre business, specifically high end GPU related products.

“That is something which is in our plan. We have been investigating it. How to implement it here whether it is in our existing facility in Puducherry or we look at some other types of manufacturing partnerships," Rozanovich said.

Lenovo is among 27 companies that are eligible for IT hardware production linked incentive (PLI) scheme.

Lenovo President, EVP at Intelligent Devices Group (IDG), Luca Rossi said that the industry is not expecting much growth in the PC segment as the global economy is not in its best shape. He said demand is going to increase for PCs from next year as artificial intelligence technology matures.