Market Insight

Lenovo Expects Semiconductor Spending Surge Following IBM x86 and Motorola Mobility Acquisitions

December 10, 2014  | Subscribers Only

Chee Seng Tan Chee Seng Tan Analyst, Semiconductor Value Chain

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After becoming the world’s largest PC vendor, Lenovo now aims to dominate the server and smartphone market with the recent acquisition of IBM x86 server unit and Motorola Mobility, respectively. The Chinese multinational corporation splurged a total of $5.01 billion to acquire these two U.S. businesses, paying $2.1 billion to IBM for the server business and $2.91 billion for taking over the Motorola mobile devices business from Google. The acquisitions will propel Lenovo to become the world’s third largest server and smartphone OEM as well as opening up more doors into the Western enterprise and mobile markets.

For the server business, Lenovo will compete head-to-head with Hewlett-Packard, also a rival in the global PC market whose top-ranked position was displaced by Lenovo a few quarters ago when the PC market was in decline. Since IBM announced its intention to sell-off the server business to Lenovo, Hewlett-Packard has been aggressively poaching and winning over IBM’s clients and business partners with optimized incentive plans.

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