Lenovo Expands AI Server Production in India, Targets Major Exports to Asia-Pacific

Lenovo Group Ltd LNVGY has started making artificial intelligence servers at its Puducherry facility in India to diversify its manufacturing facilities away from Taiwan.

Lenovo has also opened a new Research and Development (R&D) lab in Bengaluru, joining its global network of 18 R&D labs.

The facility can produce 50,000 enterprise AI rack servers and 2,400 advanced GPU units annually, the Firstpost reports.

Lenovo looks to export over 60% of the servers produced at this facility to Asia-Pacific.

The AI server market was worth $38.3 billion in 2023 and, according to Global Market Insights, could report an 18% CAGR between 2024 and 2032, backed by the adoption of AI across various industries. In 2023, Lenovo announced a $1 billion investment between fiscal 2023 and 2025 to accelerate AI deployment.

However, a significant event had a major impact on the AI server market. Critical AI server company Super Micro Computer, Inc SMCI was scrutinized after a Hindenburg report flagged accounting malpractices, sanctions evasion, and more.

The stock plunged 30% in the last 30 days as multiple analysts downgraded the rating. Earlier in 2024, KeyBanc analyst Thomas Blakey expected Super Micro Computer to reach a 23% share of the AI server market in calendar 2024.

Goldman Sachs analyst Michael Ng and JP Morgan analyst Samik Chatterjee called out Dell Technologies Inc’s DELL AI server margins, signaling the upside thereof.

Photo by Robert Way via Shutterstock