Lenovo Expands AI Manufacturing and R&D in India
Lenovo, the Chinese tech giant, plans to manufacture AI servers in Puducherry, India, with an annual production capacity of 50,000 AI rack servers and 2,400 GPU servers. A new AI server-focused R&D lab has opened in Bengaluru to drive innovation. This move is consistent with the trend of technology companies expanding their manufacturing operations in India.
The company intends to capitalise on the growing AI market by manufacturing specialised servers and establishing a dedicated research lab in the country.
Lenovo will start manufacturing AI servers at its existing plant in Puducherry, southern India. The facility, which already produces laptops, notebooks, and personal computers, will now include AI-specific hardware on its production line. The company has set lofty goals, aiming to produce 50,000 AI rack servers and 2,400 graphic processing unit (GPU) servers each year.
These AI servers are intended to handle resource-intensive tasks such as machine learning, demonstrating the growing demand for high-performance computing in the AI era. Amar Babu, Lenovo's president for Asia Pacific, stated that the servers are intended for both domestic and export markets, emphasising India's potential as a manufacturing hub for advanced technologies.
In addition to expanding its manufacturing capabilities, Lenovo has established a new AI server-focused research and development lab in Bengaluru, India's well-known technology hub. This move demonstrates the company's commitment to innovation and recognition of India's talent pool in artificial intelligence.
The decision to increase AI hardware production in India is consistent with a larger trend of technology companies diversifying their manufacturing bases beyond China. Industry leaders such as Apple, Foxconn, and Dell have also increased their presence in India, partly to reduce reliance on Chinese manufacturing and to capitalise on India's growing market and favourable policies.
The Indian government has actively encouraged technology companies to establish themselves in the country through a variety of incentive schemes. While Lenovo's AI server manufacturing plan is not directly related to government incentives, the company's partnership with Dixon Technologies in India for PC and Motorola phone production benefits from such programs.
The move into AI server manufacturing coincides with the AI hardware market's explosive growth. According to a Nasscom-BCG report, AI hardware will account for 12% of the global AI market, which is expected to nearly triple to $380 billion by 2027. This growth has been driven by an increase in demand for GPUs and AI chips since the generative AI boom began in late 2023.
Lenovo to manufacture AI servers in Puducherry, India, targeting 50,000 AI rack servers and 2,400 GPU servers annually
New AI servers-focused R&D lab opened in Bengaluru to drive innovation
Move aligns with trend of tech companies expanding manufacturing in India
Source: REUTERS