Lenovo, the world’s biggest maker of personal computers, will issue $2 billion in convertible bonds to Saudi Arabia’s PIF as part of a broad investment agreement that will include a new PC and server manufacturing plant.
First announced in May, the partnership has now received shareholder and regulatory approvals, paving the way for Lenovo to establish a regional headquarters and a manufacturing facility in Saudi Arabia. The factory will manufacture millions of PCs and servers annually drawing on local research and development teams for “Saudi Made” products and is expected to begin production by 2026. The factory will primarily serve markets in the Middle East and Africa.
The PC and server assembly plant is expected to employ thousands of people when it comes online in 2026 and is expected to be one of the most extensive high-tech facilities in the region.
While China remains its main manufacturing base, Lenovo operates more than 30 factories in nine different markets with production facilities in Argentina, Brazil, China, Germany, Hungary, India, Japan, Mexico, and the USA. The Saudi production facility further increases its diversified global manufacturing footprint.
Lenovo will also establish a regional Middle East and Africa headquarters (RHQ) in Riyadh. In addition to the manufacturing facility, Alat and Lenovo have agreed to a business development partnership to leverage Alat’s relationships in the region and local market insight. The RHQ will also invest in flagship retail space in the Kingdom and expand investments in R&D as well as marketing and strategic partnerships in both KSA and the MEA region.
Yuanqing Yang, Chairman and CEO of Lenovo, said:
“Through this powerful strategic collaboration and investment, Lenovo will have significant resources and financial flexibility to further accelerate our transformation and grow our business by capitalizing on the incredible growth momentum in KSA and the wider MEA region. We are excited to have Alat as our long-term strategic partner and are confident that our world-class supply chain, technology, and manufacturing capabilities will be a benefit to KSA as it drives its Vision 2030 goals of economic diversification, industrial development, innovation, and job creation.”
Lenovo has most of its plants in China creating potential vulnerability to US tariffs. Yang has said that it is too early to predict the new US administration’s policies but that Lenovo is hedging such risks through its more diversified manufacturing base and sourcing strategy, as well as balanced regional revenue streams.
Lenovo reported revenue of $17.9bn for the quarter ended September 30 with net profit of $359m. Lenovo’s global PC shipments rose 3 per cent to 16.5 million units in the September quarter, maintaining its commanding 24 per cent market share.
