Lenovo Scores Despite Chip Shortage

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The largest PC maker in the world is posting solid growth figures. Even the loss-making infrastructure division is doing remarkably well. However, the company indicates that the chip shortage continues to cause delays.

 

In its second quarter, which ended at the end of September, Lenovo had sales of $17.9 billion, up 23 percent from a year ago. The net profit comes to 512 million euros, 65 percent better than last year. However, that growth is slightly less than in previous quarters.

The Solutions and Services Group (SSG) generated $1.36 billion in revenue, growing 30 percent yearly. Lenovo wants to offer better support services and expects more profit and revenue in the future by integrating their internal IT with SSG to improve their R&D, among other things.

The Infrastructure Solutions Group achieves $2 billion in revenue and is growing 34 percent per year. That department is loss-making, but Lenovo is convinced that the loss is 24 million dollars lower than six months ago. A year ago, it was there with an operating margin of -2.1 percent. Now it’s -0.3 percent.

According to Lenovo, all segments are doing well here, from cloud to storage and high-performance computing. Shortly, it expects more around the edge, hybrid solutions and the 5G cloud/network convergence.

The largest division, Intelligent Devices Group, has a turnover of 15.3 billion, 21 percent more than a year ago. The profit comes in at $1.2 billion, 34 percent better.

Here Lenovo sees its PC sales grow and expects a boost for that market in the near future with the arrival of Windows 11. Sales from commercial PCs increased by 29 percent. Devices for the SME market by 48 percent.

The smartphone division (Motorola) had one of its best quarters ever with sales growth of 27 percent, driven by growth in virtually all markets (Lenovo has traditionally performed well in the Americas. Tablet sales grew 20 percent. Business accessories by 31 percent.

During its results, Lenovo also announced that it will now spend sixty percent more on R&D. The ambition is to double its efforts there over three years.

At the same time, the largest computer manufacturer in the world is struggling with the persistent chip shortage, just like everyone else in the sector. The company says its results are partly because it was able to acquire more parts than competitors. But at the same time, the chip shortage is causing delays in the availability of PCs, smartphones and servers.

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