In the fourth-quarter and full-year performance media communication meeting of the 2020/2021 fiscal year, the personal computer and smart device business in the fourth quarter created a 46% year-on-year increase in revenue, and the profit margin reached a record high Achievement.
Yang Yuanqing, Chairman and CEO of Lenovo Group, said, “Although part of the growth is triggered by the epidemic, it is only a beginning. After the epidemic, the growth of the PC side is still sustainable.” The epidemic has changed the way people perceive life and work. There is a higher dependence on electronic products such as tablets. In the future, PCs and tablets will be tools with one tool.
In Yang Yuanqing’s view, for the emerging market of China, PCs are in a stage of rapid growth. “Mobile phones are tools for information consumption, computers are tools for learning and tools for productivity.” Small defects can not be tolerated, and it will promote the arrival of the replacement wave faster.
The rapid growth in PC demand has also put a certain pressure on the supply side, especially in the context of a global shortage of cores, there will be a certain shortage before new production capacity is established, “but it will not cause Lenovo to increase. The shortage is caused by higher reasons, not the existing demand.” Yang Yuanqing predicts that the shortage of chips will continue for at least 12 to 18 months in the future.
On the manufacturing side, Lenovo adopts a hybrid manufacturing model, with 50% of it being produced by itself and 50% of it being handed over to ODM. Because of this, Yang Yuanqing said that Lenovo has more opportunities to contact suppliers. In the case of chip shortage, it will have better performance and have the opportunity to get more supply than the market. He is very Full of confidence in double-digit growth.
Next, Lenovo will pursue profitable growth. More profitability is not the main demand, but the pursuit of growth. With the improvement of scale, products, and other related aspects, we can better develop related businesses. Regarding the increase in semiconductor prices, Yang Yuanqing said that the increase in parts and components caused by the shortage of chips is inevitable.
Most companies can only achieve partly through internal digestion, and partly through price adjustments. “Lenovo has good management capabilities in this regard and will not lose to competitors. It does not hope to be the leader in price increases, but it must maintain profitability and competitiveness.”