NEWS

Lenovo plans to have joint venture produce servers

Lenovo plans to have LCFC (Hefei) Electronics Technology, a notebook joint-venture established with Taiwan-based ODM Compal Electronics, undertake production of servers, according to Taiwan-based supply chain makers.

Through the acquisition of IBM's x86 server business unit, Lenovo has become the third-largest server vendor, the sources said. Lenovo shipped 800,000-900,000 servers in 2015 and aims to ship more than one million units for a global market share of over 10% in 2016, the sources indicated.

Lenovo has set up a Data Center Group specifically to market servers to enterprises and in data centers, the sources noted.

Currently, Taiwan-based Wistron and Inventec are the two largest server ODMs for Lenovo, but Inventec is expected to become the largest one after Intel launches its new processor platform Purley in 2017, the sources said.

LCFC (Hefei) shipped 18.86 million notebooks in fiscal year 2015 (April 2015-March 2016) and is expected to ship 20 million units in fiscal year 2016, the sources indicated. LCFC (Hefei)'s stepping into production of servers will have a negative impact on Wistron and Inventec, the sources noted.

Compal has signed with Lenovo to sell its stake in LCFC (Hefei) in 2017, after which LCFC (Hefei) will become Lenovo's wholly-owned subsidiary.

Source: Digitimes