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Lenovo Faces Chip Crunch: AI Growth vs. PC Woes
15 Feb
Summary
- Lenovo reported an 18% revenue increase despite memory supply constraints.
- AI server business saw high double-digit growth driven by Nvidia deployments.
- Company raised prices to offset rising memory costs, impacting PC sales.
Lenovo's third-quarter revenue soared 18% to $22.2 billion, surpassing market expectations. This growth was partially offset by a 21% decline in reported net profit due to a $285 million restructuring charge. The company is experiencing significant strain from tightening memory supply, a constraint affecting hardware shipments industry-wide. To mitigate rising memory costs, Lenovo has implemented price increases, which are anticipated to impact PC unit sales.
Despite these pressures, Lenovo's digital infrastructure group saw a 31% revenue increase. The company specifically reported high double-digit revenue growth in its AI server business, driven by the deployment of systems utilizing Nvidia's GB200 NVL72 design. Lenovo anticipates the AI infrastructure market will triple by 2028, and is adapting its server portfolio to focus on inference applications, shifting from large language model training.
