Lenovo is expanding its data center and coding business divisions.

Lenovo Group Ltd is expanding its data center business and software and services unit in response to the COVID-19 pandemic's challenges and opportunities. The Chinese tech giant, the world's largest personal computer maker, has restarted production in all of its factories in China, including its major plant in Wuhan, capital of Hubei province. Yang Yuanqing, chairman and CEO of Lenovo, stated that the company will work to transform itself into a competitive service and solutions provider, saying, "The outbreak will no doubt increase global uncertainties but we will try our best to find new opportunities from the online economy."

The pandemic has created several new demand drivers for Lenovo's product portfolio. As people work and study from home, demand for PCs, tablets, and displays is increasing, while the growing demand for mobile games, remote consultations, and video conferencing tools provides additional opportunities. Yang emphasized that "Lenovo has a full product lineup, and good relations with software providers, which can help us become a one-stop supplier to meet the demand." These developments align with China's recent emphasis on constructing new infrastructure including data centers, 5G, and artificial intelligence.

Lenovo expects significant growth in its data center business, with Yang stating, "We expect our data center business to grow by over 20 percentage points on a yearly basis than the industry average for the full year." The company's production capacity has returned to full strength in China following initial first-quarter disruptions. The Wuhan factory, Lenovo's biggest and most advanced plant, restarted production in March and has returned to 100 percent of its production capacity with approximately 10,000 employees at the assembly lines. According to Qi Yue, who oversees the Wuhan plant, orders have been running into May.

The Wuhan facility ships approximately 95 percent of its products to more than 160 countries and regions. According to market research company NPD Group, demand for PCs and keyboards rose as the outbreak forced more people to work from home and many consumers received employer subsidies for device purchases. However, Jitesh Ubrani, research manager for International Data Corp's mobile device segment, cautioned: "The surge in demand may be short-lived as many fear the worst is yet to come and this could lead to both consumers and businesses tightening spending in the coming months."

Despite posting a 4.3-percent year-on-year decline in shipments during the first quarter due to pandemic supply chain impacts, Lenovo maintained its leading position as a PC maker. Excluding the Asia-Pacific region and Japan, Lenovo managed to grow across all other regions, benefiting from increased demand driven by new work-from-home policies, according to IDC.