Lenovo Plans Global Factory Expansion As Q2 Results Beat; Eyes AI Growth

Lenovo Factory Expansion: Lenovo will furr diversify its supply chain and plans to open more manufacturing facilities outside China amid global geopolitical uncertainty, Chairman Yang Yuanqing said.

Lenovo, world's largest PC maker, has most of its plants in China, a common situation in electronics industry that creates potential vulnerability as US President-elect Donald Trump threatens to impose 60 per cent tariffs on Chinese imports.

Yang told Reuters that while it's too early to predict new US ministration's policies, Lenovo has an vantage over competitors in hedging such risks through its more diversified manufacturing base and sourcing strategy, as well as balanced regional revenue streams.

While China remains its main manufacturing base, Lenovo operates more than 30 factories in nine different markets. company plans to open facilities in Saudi Arabia following a major investment deal with kingdom's Public Investment Fund, Yang said.

On Friday, Lenovo reported a 24 per cent rise in its fiscal second-quarter revenue from a year earlier. That was partly spurred by sales growth of computers that can handle artificial intelligence worklos as global personal computer industry showed signs of recovery.

Chinese technology company reported revenue of $17.9 billion for quarter ended September 30, exceeding analysts' expectations of $16.0 billion, according to LSEG data.

Net profit reached $359 million, compared with analysts' estimates of $331.7 million.

Lenovo's global PC shipments rose 3 per cent to 16.5 million units in September quarter, maintaining its commanding 24 per cent market share. Across industry, global PC shipments fell 2.4 per cent from a year earlier, according to research firm IDC.

Demand for AI-capable computers has emerged as a key growth driver for PC industry, with manufacturers racing to launch models equipped with specialised chips for artificial intelligence applications.

Lenovo launched its first AI-powered PCs in China in May before rolling m out globally in September. Yang expects AI PCs to account for 25 per cent of Lenovo's shipments by 2025, rising to as much as 80 per cent by 2027.

Lenovo has positioned itself to benefit from AI trend by expanding its AI server and software businesses.

company's Infrastructure Solutions Group, me up of IT solutions including servers, saw revenue in September quarter grow by more than 60 per cent from a year earlier, driven partly by strong demand for servers handling AI worklos in data centres.

Its Solutions and Services Group, which includes cloud-based software offerings for enterprise clients, posted revenue of $2.2 billion, up from $1.9 billion a year earlier.