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Lenovo expands x86 server production to Europe

Chinese hardware manufacturer claims move will result in faster delivery times and lower costs for European customers

Lenovo has vowed to cut datacentre hardware shipping times to European customers by shifting the production of some of its enterprise server, storage and networking products to the continent.

The initiative will see the firm’s long-term manufacturing partner, Flex, supplement the Chinese production of its full Lenovo x86 server range by kick-starting the roll-out of products from its site in Hungary later in summer 2016.

The Hungarian site is currently used to produce Lenovo’s PC products for the Europe, Middle-East and Africa (Emea) market, which has seen Flex make more than 5 million units to date.

According to Lenovo, the shift in its datacentre production strategy will enable the firm to cut down the time it takes to deliver hardware to customers. The company estimates the move will cut transit times by up to five days, depending on the destination.

The move is expected to pave the way for lower prices for customers, with Lenovo promising to pass on the resultant reduction in freight costs to them.

“Transferring production to Europe is a strategic move for us, which will create tangible benefits for our customers,” said Wilfredo Sotolongo, Emea vice-president and general manager of Lenovo’s Data Center Group (DCG).

“Our customers have been very positive about our decision to manufacture in Hungary. We believe this will only enhance our capabilities in the enterprise market as we will be able to offer an even greater level of service to our Emea customers.”

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The shift in production strategy comes at a time when Lenovo is looking for ways to offset the downturn in demand for PCs by taking steps to ramp up the adoption of its mobile products in emerging markets, while courting the enterprise with its datacentre offerings.

According to Lenovo’s recent set of financial results, this strategy resulted in sales of its datacentre servers, storage and software products rising 8% year-on-year to $3.1bn during the third quarter of its 2015 financial year.

Conversely, sales of its PCs and tablets were down 12% to $8bn, on the back of a “greater than expected slowdown” in demand for devices and foreign exchange fluctuations. 

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