Lenovo has issued a new warning about the mounting memory-chip shortages. The Chinese PC maker, which is also the world’s largest by market cap, has revealed that rising memory chip shortages are pressuring its shipments across the industry.
According to a report by the news agency Reuters, this is also forcing the company to raise prices and accelerate its push into AI inference markets. In a statement to Reuters following the company’s release of third-quarter results, Lenovo CEO Yang Yuanqing said, “We expect PC unit sales to face pressure, but believe we can still grow revenue and maintain profitability.”The memory-chip shortage, driven by surging AI demand, is squeezing margins and threatening production targets for PC manufacturers.
Lenovo has raised prices to offset rising memory costs while expanding its AI business to counter the pressure. The company’s third-quarter revenue rose 18% to $22.2 billion, beating analyst expectations of $20.6 billion. However, net profit fell 21% to $546 million, weighed down by a $285 million restructuring charge, Reuters reported.
Lenovo CEO on how restructuring can help the company
The restructuring is intended to increase the company’s focus on the AI inference market and is expected to reduce costs by up to $200 million over three years, Lenovo CEO Yang told Reuters.
As per the report, the company’s adjusted net profit, which excludes one-time items and non-cash charges, rose 36% to $589 million.Lenovo’s PC, tablet, and smartphone business, which made up about 70% of its total revenue, reported a 14.3% increase in revenue for the period. Meanwhile, its digital infrastructure group, which includes the AI server business, recorded 31% growth, even as it posted an operating loss of $11 million due to investments to expand its AI capabilities.Lenovo’s AI server business reported high double-digit revenue growth, supported by a solid pipeline and the rollout of rack-scale solutions based on Nvidia’s GB200 NVL72 design.Yang said demand for AI is moving from training to inference, leading Lenovo to adjust its server portfolio to focus on the AI infrastructure market, which the company expects to triple by 2028. In January, Lenovo also introduced new enterprise servers for AI inference workloads in partnership with AMD.Last week, several PC makers, including HP, Dell, Acer, and Asus, were reported to be considering purchasing memory chips from Chinese manufacturers for the first time. The move came as the semiconductor market faces rising demand for High-Bandwidth Memory (HBM) used in AI infrastructure, putting pressure on traditional consumer electronics brands.Companies such as Micron, Samsung, and SK Hynix have shifted more of their production toward higher-margin HBM for AI infrastructure, while the standard DRAM and NAND chips needed for laptops and PCs are becoming increasingly scarce.Citing industry insiders, Nikkei Asia reported that Chinese chipmakers were increasingly being seen as a “lifesaver” for the consumer electronics sector. At the time, the “Big Three” memory makers were prioritising capacity for AI-focused companies such as Nvidia, Google and Amazon.
