Facing rising storage prices! LENOVO GROUP (00992) announced it has signed a long-term component supply agreement.

On November 20th, according to media reports, Chinese technology giant LENOVO GROUP (00992) announced on Thursday that it has signed long-term supply contracts with key component suppliers to address the issue of rising storage chip prices due to the surge in demand for artificial intelligence (AI). "We have signed the optimal contract with core component suppliers to ensure sufficient supply guarantee for next year," revealed LENOVO GROUP Chairman and CEO Yang Yuanqing to the media after releasing the company's second-quarter financial report. Recently, global storage chip prices have been continuously increasing due to the surge in demand from data center operators to build AI servers. Chip manufacturers such as Samsung Electronics (005930.KS) have shifted production to high-bandwidth memory (HBM), a technology widely used in AI chips, leading to a tightening supply of traditional storage chips used in smartphones, computers, and gaming devices. In this context, Lenovo's practice of securing the supply chain resources in advance reflects its high emphasis on stability and sustainability in the AI transformation process. By locking in key component supplies through long-term contracts, Lenovo not only helps control cost fluctuations but also gains strategic initiative in intense competition. It is worth noting that Lenovo has been accelerating its layout in the AI infrastructure field in recent years, attempting to transform from a traditional PC manufacturer to an "intelligent computing service provider." This signing is not only a response to short-term challenges but also a crucial step in its long-term strategic layout. Industry experts believe that as the pace of AI universalization accelerates, more companies will join this "computing power race," with supply chain security becoming a key factor in determining success or failure. As a top enterprise ranked in the top 8 of Gartner's global supply chain ranking and holding the first global PC market share, Lenovo's strong supply chain resilience and shipping capabilities give it enough bargaining power in the supply chain to effectively respond to market fluctuations. Yang Yuanqing emphasizes that as a major buyer of core components, Lenovo can take a more proactive position in supply chain negotiations, which is an important advantage in dealing with market fluctuations. For example, in the PC field, large procurement volumes not only obtain better price costs but also establish deeper strategic partnerships with suppliers, which is an advantage that small and medium-sized players cannot match. According to the just released second quarter performance for the 2025/26 fiscal year: Lenovo IDG Smart Device Business Group performed particularly well, achieving revenue of RMB 108.1 billion, a year-on-year increase of 12%, amid the accelerating recovery of the global PC market. Among them, the proportion of AI terminal device revenue in IDG's overall revenue increased significantly to 36%, a year-on-year increase of 17 percentage points, making it one of the most structurally significant growth engines. Regarding recent discussions about the AI bubble, Yang Yuanqing emphasizes, "Overall, we do not believe that the market will experience a bubble. The next stage will be the popularization of AI. This indicates that AI technology will transition from high-end applications to mass adoption."