China’s Lenovo warns of PC shipment pressure from memory shortage
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Lenovo, the world’s largest PC maker, has raised prices to offset surging memory costs.
PHOTO: REUTERS
BEIJING – China’s Lenovo Group warned on Feb 12 about mounting pressure on PC shipments as a worsening memory-chip shortage grips the industry.
Chief executive Yang Yuanqing told Reuters after the company released third-quarter results that the world’s largest PC maker has raised prices to offset surging memory costs, while accelerating its push into the fast-growing artificial intelligence (AI) inference market.
“We expect PC unit sales to face pressure, but believe we can still grow revenue and maintain profitability,” Mr Yang said.
The comments underscore the strain on PC manufacturers as memory-chip shortages
Lenovo’s third-quarter revenue rose 18 per cent to US$22.2 billion (S$28 billion), beating expectations of US$20.6 billion, but net profit fell 21 per cent to US$546 million, weighed down by a US$285 million restructuring charge.
The restructuring aims to sharpen the company’s focus on the AI inference market and will cut costs by up to US$200 million over three years, Mr Yang said.
Adjusted net profit, which excludes one-time items and non-cash charges, climbed 36 per cent to US$589 million.
Lenovo’s PC, tablet and smartphone business line, which accounted for about 70 per cent of its total revenue, reported a 14.3 per cent revenue increase for the period. Its digital infrastructure group, which includes its AI server business, grew 31 per cent despite reporting an operating loss of US$11 million due to an investment to scale up its AI capabilities.
Lenovo’s AI server business posted high-double-digit revenue growth, driven by a strong pipeline and deployment of rack-scale solutions based on Nvidia’s GB200 NVL72 design.
Mr Yang said AI demand is shifting to inference from training, prompting Lenovo to adjust its server portfolio to target the AI infrastructure market, which it expects to triple by 2028.
Lenovo unveiled new enterprise servers for AI inference workloads with AMD in early January. REUTERS
