Lenovo turns to India as source of AI servers

Lenovo revealed on Tuesday that it will manufacture AI servers at its plant in Puducherry, India, and has opened a new infrastructure research and development lab in Bengalaru.

The Puducherry facility has the capacity to produce 50,000 units that Lenovo has described as "enterprise AI rack servers," plus "2,400 high-end GPU units" each year. The Chinese PC giant hasn’t revealed the specs of the rack-mounted servers, but described the high-end machines as packing eight GPUs apiece.

Sixty percent of the servers are slated for export across the Asia Pacific region.

"Lenovo is super-charging its supply chain to not only serve domestic demand but also account for potential expansion into overseas markets," declared [PDF] the hardware maker.

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The Bengalaru R&D center is one of four such facilities. The others are located in Beijing, Taipei, and Morrisville, North Carolina. Lenovo reckons it will be "pivotal in the system design, development, and testing of next-generation server platforms, including hardware, firmware, and software development."

Lenovo predicted "all future mainstream server design, developments, and new technical initiatives will be conducted at this lab."

According to Lenovo, the two facilities further solidify its "commitment to India by creating thousands of economic opportunities in the high-technology skills domain."

Lenovo's presence in India is not new. It opened its Puducherry facility in 2005 and claimed it produced over seven million devices in India during the year ending March 31, 2024. Motorola Mobility, which Lenovo has owned since buying it from Google in 2014, has also operated in India for around ten years.

India has sought to boost domestic manufacturing through its "Make in India" campaign, launched in 2014. The initiative has included reforms in policy, tax incentives, subsidies, and simplified investment procedures.

That plan appears to be working as Foxconn, HP, Cisco, Acer, Asus and Dell have all moved some manufacturing work to India in the last couple of years.

Their motivation appears to be tapping into a growing domestic market, and diversifying their operations to preventdisrupted supply chains that became an issue during the COVID-19 pandemic. Geopolitics is another consideration, as the USA is discouraging investment in and engagement with China, making reliance on Middle Kingdom manufacturers riskier.

Global server sales are forecast to top 12 million this year, so the 52,500 machines Lenovo will build in India aren't a massive contribution to the market.

But AI servers are So Hot Right Now, so Lenovo’s move will be welcome in India – even if the volume of kit the Chinese company makes there is small, and Lenovo’s roots in IBM means it is no stranger to manufacturing outside China. ®