Lenovo, the world’s largest PC maker, will open manufacturing facilities in Saudi Arabia to expand its global presence. The announcement follows a significant investment deal with Saudi Arabia’s Public Investment Fund (PIF), signaling the company’s commitment to diversifying its supply chain.
Chairman Yang Yuanqing emphasized Lenovo’s strategy to reduce reliance on China amid geopolitical uncertainties and potential US trade tariffs. Lenovo currently operates more than 30 factories across nine markets, ensuring resilience against economic and political risks.
While China remains its primary manufacturing hub, Lenovo plans to strengthen its regional production capabilities worldwide. This move aligns with its goal of hedging risks through a diversified sourcing strategy and balanced revenue streams.
Strong Financial Performance in Q2
Lenovo reported a 24% revenue increase in its fiscal second-quarter results, driven by robust PC and AI-related sales. The company’s revenue for the quarter reached $17.9 billion, surpassing analysts’ expectations of $16 billion, according to LSEG data.
Net profit for the same period hit $359 million, exceeding estimates of $331.7 million. Lenovo maintained its leading 24% global market share, with PC shipments rising by 3% to 16.5 million units, despite a 2.4% industry-wide decline.
AI-Driven Growth Fuels Innovation
Demand for AI-capable PCs has emerged as a crucial growth driver, prompting manufacturers to introduce AI-enhanced models. Lenovo launched its first AI-powered PCs in China in May and rolled them out globally by September.
Yang predicted that AI-capable PCs will account for 25% of Lenovo’s shipments by 2025, increasing to 80% by 2027. Lenovo’s AI-focused strategy extends to its Infrastructure Solutions Group, which reported a 60% revenue growth due to strong demand for AI servers in data centers.
The company’s Solutions and Services Group also achieved significant growth, reporting $2.2 billion in revenue, up from $1.9 billion a year earlier. Cloud-based software offerings and enterprise IT solutions have become key components of Lenovo’s business expansion strategy.
With plans to establish operations in Saudi Arabia, Lenovo is well-positioned to strengthen its global footprint and capitalize on emerging technology trends.
