Lenovo begins manufacturing AI servers in India

Lenovo has started manufacturing AI servers in India with a capacity of 50,000 servers and 2,400 GPUs, mainly for export to Asia-Pacific. This aligns with India’s incentive scheme, making the country a key hub for IT hardware. Lenovo is also boosting product localization and expanding R&D with a new lab in Bengaluru.

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Lenovo Group has started manufacturing artificial intelligence (AI) servers in India, with an annual capacity to produce 50,000 enterprise AI rack servers and 2,400 graphics processing units (GPU) to meet the growing demand for AI technology. The production line at Lenovo’s Puducherry facility, which has been operational since 2005, will produce AI and GPU servers for both local and international markets. According to the company, around 60% of the production is intended for export across the Asia-Pacific region.

This initiative positions Lenovo as one of the first companies to manufacture AI servers in India under the government’s incentive scheme, elevating the country as a key manufacturing destination for high-end IT hardware, alongside China and Taiwan. AI servers will see rising demand as enterprises and consumers increasingly adopt generative AI, which requires significant computing power from AI servers.

Lenovo’s decision follows its $1 billion investment in AI over three years, which was announced last year to develop AI platforms, computing devices, and servers. The company’s local manufacturing plan aligns with India’s production linked incentive (PLI) scheme for IT hardware, with Lenovo benefiting from the first phase of the program. “(For PLI) 1.0, like I was saying, we were one of the first beneficiaries to our original design manufacturer (ODM) partner, which is Dixon and Motorola and we reaped all the benefits that have been there on PLI 1,,” said Shailendra Katyal, Lenovo India’s managing director.

Lenovo has been manufacturing in India for two decades and is focusing on increasing localization, with 40% of phone components already produced domestically. “When India grows now, 5x, 6x on the current base, it will all be with the power of technology, and we are fully committed to it,” added Katyal. The company is also increasing its focus on research and development, as seen with its newly launched R&D lab in Bengaluru.