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Singapore's economy grew 5% in 2025, data released on February 10 showed, beating an earlier estimate of 4.8% growth, driven by a manufacturing boost from global demand for <a href="/industry/ai">artificial intelligence</a>, even as the city-state prepares for challenges posed by potential disruption from the technology.
Last year's result fell below the 5.3% expansion recorded in 2024. On February 10, officials upgraded the growth forecast this year to a range of 2–4%, up from 1–3% previously.
The Southeast Asian trading hub's gross domestic product expanded 6.9% in the October-December quarter versus a year earlier, higher than the <a href="https://asia.nikkei.com/economy/singapore-economy-expands-4.8-in-2025-outperforming-forecasts" target="_blank" rel="noopener">5.7% estimate</a> released last month, according to government data.
"The global economy has outperformed expectations, with most major economies turning in stronger-than-expected growth in the fourth quarter of 2025," the Ministry of Trade and Industry said in a statement on February 10. "Global trade activity remained resilient despite the US tariffs, likely reflecting effective US tariff rates that were lower than the announced headline rates."
During the three months through December, the export-driven manufacturing sector expanded 18.8% compared with a year earlier, while output in the more domestically oriented services sector grew 4.8%.
Electronics exports jumped 24.9% on the year in December, UOB Global Economics and Markets Research pointed out in a January note, owing to "robust export growth" in telecommunications equipment and integrated circuits.
Singapore has received a trade bump from electronics and non-electronics shipments, amid rising demand for AI hardware overseas. But the city-state is also bracing for disruption from the global AI wave. Authorities are keen to position the country as a regional leader in embracing the tech, while also aware that it could displace many jobs domestically as companies increasingly lean on software to drive business rather than workers.
Singapore has earmarked additional investment of more than SGD 1 billion (or about USD 790 million) over the five years to 2030, under a national AI R&amp;D plan, authorities said last month. The government plans to strengthen the city-state's position as an AI research hub by scaling up research efforts and taking on challenges within the field. The funds will be used to establish research centers to advance the field in priority areas, such as emerging AI methodologies and general-purpose AI, and to develop a pipeline of talent by partnering with researchers and institutions.
"We will strengthen our talent base through nurturing AI research expertise at all levels," the country's minister for digital development and information, Josephine Teo, said in January. "We will enhance scholarships and research opportunities for our students, so they will be well placed for competitive PhD, postdocs, and faculty openings in top institutions."
"Semiconductor manufacturers set up greenfield plants and expanded existing facilities to serve strong global demand for AI-related chip, server, and server-related products, with these investments having positive spillover effects on the precision engineering sector," Singapore's Economic Development Board, an agency tasked with drawing investments into the city-state, said on February 10.
Of the SGD 14.2 billion (or about USD 11 billion) in fixed-asset investment commitments that the city-state received in 2025, about 85% came from manufacturing-related projects, the board said in an update.
At a briefing on February 10, Augustin Lee, permanent secretary at the trade ministry, told reporters that "stronger-than-expected growth momentum" seen in the last quarter of 2025 is projected to carry into this year.
"Apart from the AI investment boom, which is expected to be sustained in 2026, expansionary fiscal policies in the advanced economies, as well as accommodative global financial conditions, should also support global growth," he said. "A stronger-than-projected upswing in the AI investment cycle could provide a greater boost to electronics demand and drive further gains in equity markets."
This article first appeared on <a href="https://asia.nikkei.com/economy/singapore-beats-estimates-with-5-gdp-growth-in-2025-amid-ai-challenges">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

Singapore beats estimates with 5% GDP growth in 2025 amid AI challenges

Singapore

Southeast Asia

In embodied intelligence, few points draw as much agreement as the importance of data.
Large language models such as OpenAI’s GPT were trained on vast text corpora, and the so-called scaling law, the idea that model performance improves predictably with more data and compute, has become a working assumption across much of <a href="/industry/ai">artificial intelligence</a>. In the physical world, however, there is no equivalent reservoir. Whether human or robot, the volume of real-world interaction data remains far below what would be required to recreate a GPT-like inflection point for embodied systems.
That gap raises practical questions. How is the data collected? At what scale? And how is quality maintained? For companies building embodied intelligence, the answers increasingly shape their prospects.
Lumos, a <a href="/industry/robotics">robotics</a> startup founded in September 2024, has chosen to focus on the first link in that chain: data collection.
The company has launched what it describes as a backpack-mounted universal manipulation interface device called FastUMI Pro. It plans to deploy 10,000 units in 2026 across six real-world environments, industrial sites, homes, hotels, restaurants, shopping malls, and offices, to conduct systematic data collection.
To understand the strategy, it helps to clarify what UMI is. Proposed jointly by researchers at Stanford University, Columbia University, and the Toyota Research Institute, UMI is a low-cost data collection and learning framework. Unlike teleoperation-based methods, which typically bind data to a specific robot’s hardware, UMI decouples the acquisition system from the robot itself. In principle, that allows the resulting data to generalize across different robot morphologies rather than remaining tied to a single machine.
At a media briefing earlier this year, Lumos founder and CEO Yu Chao compared UMI’s efficiency and cost with teleoperation.
“For a task like folding clothes, teleoperation data collection takes about 50 seconds and costs RMB 3–5 (USD 0.42–0.70),” Yu said. “Using FastUMI Pro, it takes just ten seconds, and costs less than RMB 0.6 (USD 0.08). That significantly improves efficiency while lowering costs.”
Yu previously led embodied robotics at <a href="/company/dreame">Dreame</a>, where he oversaw the development and mass production of Xiaomi’s CyberDog, delivering more than 1,000 units, according to the company. Co-CTO Ding Yan, who worked on UMI in its early research phase, was among the first in China to push the framework toward industrial applications.
In 2025, Lumos built a dedicated data collection center and said it achieved an annualized production capacity of 100,000 hours of data. Yu estimates that by 2026, leading embodied AI models will require at least one million hours of training data.
Lumos’ stated goal for 2026 is to achieve an annual UMI data production capacity of one million hours. Reaching that scale would require moving beyond centralized facilities toward distributed collection in everyday settings.
<blockquote>“Robot training data should not be this expensive or scarce. Humans generate data constantly while working in the physical world. It’s everywhere. It just hasn’t been properly collected.”</blockquote>
The FastUMI Pro is designed around that premise. Worn as a backpack, it functions as a portable, standardized workstation that converts real-world operations into structured training data. Historically, embodied data collection has relied on laboratories or tightly controlled environments. That approach often produces repetitive datasets, with robots performing a narrow range of actions in fixed contexts, limiting a model’s ability to generalize.
By miniaturizing its toolkit, Lumos is attempting to lower the barrier to capturing more diverse operational data.
The company plans to target six broad scenarios, industrial, residential, hospitality, food and beverage, retail, and office environments, subdivided into 30 task categories. It describes the objective as building a structured, multidimensional operational dataset.
At the heart of Lumos’ system is what it calls an integrated loop connecting collection, training, and deployment. The new initiative relies on that closed cycle.
Using FastUMI Pro, Lumos said its dual-arm robot Mos completed a factory quality inspection workflow, including data collection, policy training, and model inference, within five hours. After on-site deployment in Hefei, the company said the system completed the same sequence in seven hours in a real-world setting.
In parallel, Lumos has introduced what it calls a “data supermarket.” It has standardized portions of its datasets into products that customers can purchase through its website.
For now, Lumos’ strategy centers on data infrastructure rather than model architecture.
“I come from a model training background,” Ding said in interviews with several media outlets earlier this year. “I used to focus on training models. But we ran into a major issue. To train a really strong model, you need a solid data pipeline including data production, evaluation, and filtering. Building that pipeline takes time.”
After evaluating its priorities, the company decided to focus first on data.
“In the end, competition in model architecture only goes so far,” Ding said. “What truly differentiates models is the quality of their data.”
Whether that view proves durable as embodied AI evolves remains uncertain. What is clear is that the upper bound of embodied intelligence is constrained by the scale and diversity of real-world operational data. If standardized datasets can be sourced as readily as hardware components, the threshold for training industry-grade models may decline.
Lumos is betting that shifting from centralized labs to thousands of backpack-mounted devices will expand that supply. If operational data becomes more abundant and standardized, embodied systems may begin to generalize beyond controlled demonstrations and into routine, repeatable work.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3680210722254473">article</a> was written by Qiu Xiaofen for 36Kr.

This company has built a backpack-style system for robotics data collection

Robotics

Deep Tech

Embodied Intelligence

China

… Christian Democratic Union party, told Nikkei that public transport should be subject to stringent derisking requirements.
In December, German finance minister Lars Klingbeil sharply criticized state-controlled railway company Deutsche Bahn for ordering 200 electric intercity buses from BYD. Klingbeil called for "healthy location patriotism" to award contracts to German or European manufacturers.
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/electric-vehicles/eu-companies-adopt-byd-yutong-buses-despite-china-security-fears">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

EU companies adopt BYD, Yutong buses despite China security fears

East Asia

Transportation

Electric Vehicles

Mobility

Europe

iFlytek’s audio transcription tool reaches 100 million users

iFlytek

Artificial Intelligence

On February 13, Genki Forest founder Tang Binsen marked the company’s ninth anniversary with an internal letter that doubled as a progress report and a roadmap. The message reviewed its 2025 performance and outlined priorities for 2026, framing the past year as a turning point in its push for sustainable profitability.
Tang wrote that Genki Forest’s profitability improved in 2025, with growth that was stronger in both quality and efficiency than in previous years. He described 2024 as the year the company first validated the feasibility of turning a profit. In contrast, he characterized 2025 as a breakthrough year for what he called high-quality growth.
According to the letter, that shift was driven by a focus on three areas: expense control, price discipline, and SKU count. By reallocating resources and concentrating on core business lines, the company said it improved operational quality and strengthened its resilience to risk.
Operational adjustments extended beyond cost controls. Genki Forest said deeper channel penetration produced tangible results, creating a more stable sales rhythm and improving retail-level execution. Supply chain efficiency also improved, with cost per case reaching what the company described as a competitive level within the industry. The second phase of its Tianjin factory has begun operations, and plans are underway for a new facility in Henan, steps that expand its domestic production capacity.
Core product categories remained central to performance. Sparkling water continued to anchor revenue, while iced tea and beverages under the Alienergy and Haozizai sub-brands recorded strong growth, according to the company. It also reported steady progress in overseas markets, though the letter did not disclose specific figures.
Internally, Genki Forest said it refined management systems across budgeting, performance evaluation, and process oversight. These changes were designed to support more efficient decision-making and steadier day-to-day operations.
Tang reiterated the company’s emphasis on fundamentals, invoking the philosophy that “less is more” and “slow is fast.” He stressed the need to balance vitality with discipline, speed with quality, and innovation with operational rigor, while maintaining a product-first, user-centric approach. After nine years of development, he wrote, Genki Forest has entered what he described as a phase of clearer goals and steadier execution.
For 2026, Tang outlined a strategy focused on avoiding unnecessary disruption and resisting overly aggressive expansion. The company plans to stay centered on its core businesses, further advance its three priorities, and strengthen capabilities across channels, supply chain, product development, and organizational building. The objective, he wrote, is disciplined execution and steady progress toward becoming a leading beverage company.
KrASIA features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3681124596690822">article</a> was written by Li Xiaoxia for 36Kr.

Genki Forest calls 2025 a breakthrough year, tightens ops to focus on steady growth

Retail

Consumer Economy

… the most direct experience and the most powerful sales language,” Zhang said. “We communicate professionally with malls. This is low-temperature smoldering, not open flame.” Internal data reportedly shows a significant difference in conversion rates between stores that light incense and those that do not.
If its business stopped at stick incense, Sagrada Madre would at best remain a niche imported brand. However, its expansion plans extend beyond its core category.
According to 36Kr, the company’s 2026 strategy will focus on both category expansion and geographic growth.
On the product side, the Greater China team has secured group authorization to exclusively develop fragrance-based beauty and personal care products, as well as lifestyle items. It is co-developing its first body care product with its Argentina headquarters, with a release planned for the third quarter of this year.
“We’re starting with the body rather than the face because it aligns more naturally with our positioning around holistic healing,” Zhang said.
To support a broader portfolio, the company plans to open its first multi-level flagship experience store within the year.
For 2026, the company has set a target of achieving threefold growth. Its roadmap includes strengthening online omnichannel operations, expanding offline counters, launching a large-format store, and building a distribution network through partnerships with more than 100 high-end supermarkets, concept stores, and beauty collection retailers.
At the same time, Sagrada Madre’s Greater China operations will extend beyond the mainland. Thailand has been selected as its first stop in Southeast Asia. The move suggests that China may serve not only as a major sales market, but also as a testing ground for a retail model the company aims to replicate elsewhere.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This <a href="https://36kr.com/p/3669714134704777">article</a> was written by Ren Cairu for 36Kr.

Sagrada Madre enters mainland China after building a following in Hong Kong

Hong Kong

Two of China's top memory chipmakers are launching their most aggressive expansions ever as a severe global supply crunch creates a golden opportunity for emerging players to close the gap with market leaders, Nikkei Asia has learned.
ChangXin Memory Technologies, better known as CXMT, the country's top maker of dynamic random access memory (DRAM), is expanding plants in Shanghai, with total capacity to be some two or three times that of its home base in Hefei, according to sources with knowledge of the matter.
The plants are expected to make DRAM for servers, computers, automotive applications and other electronics, the sources said. Equipment installation is planned for around the second half of 2026, with production to start in 2027, they said. The chipmaker is also expanding its production lines for high-bandwidth memory (HBM), a crucial <a href="/industry/ai">artificial intelligence</a> component, in Shanghai.
"The company's plants in Hefei and Beijing are already running at full capacity," one of the people familiar with the matter said. "They see very high demand, mainly from local companies, to expand capacity as soon as possible."
Wuhan-based Yangtze Memory Technologies (YMTC), the nation's leading maker of NAND flash memory, is <a title="" href="https://asia.nikkei.com/business/tech/semiconductors/china-s-top-memory-chip-maker-ymtc-to-build-3rd-plant-eyeing-2027-start" target="_blank" rel="noopener">building its third plant</a> in the city, aiming for production to start in 2027, Nikkei Asia earlier reported.
YMTC has now decided that in addition to making NAND, 50% of the new plant's capacity will produce DRAM memory, sources briefed on the matter said, adding that the company will also partner with another local memory assembler to build HBM for AI computing.
Three people told Nikkei Asia that YMTC has largely overcome the foreign export controls that have curbed its access to chipmaking equipment by finding ways to produce memory chips using less advanced machines. The company has also finalized the development of its own DRAM products, they said.
"They [YMTC] started to develop their own DRAM more than two years ago. They have the technological foundation and the market, now it is only a matter of time for them to produce quality DRAM and HBM going forward," said one of the people whose company supplies YMTC.
YMTC was at one point poised to become an Apple supplier, with the US company verifying its NAND flash memory products for use in iPhones. This plan was disrupted, however, when YMTC was added to the US Entity List, a trade blacklist, in 2022. The company later found growth thanks to Beijing's push to localize tech supplies and a surging memory chip market.
"It is the best timing for them to secure a solid position in the global supply chain, as whoever has memory chips on hand is a winner," said an executive with a material supplier to Micron, CXMT, and YMTC. "We estimate the bright outlook for the memory sector is going to last for at least two years and beyond."
AI computing demand is driving a supercycle in the global memory chip market, with prices up hundreds or even thousands of percent on the year. This surge has already <a title="" href="https://asia.nikkei.com/business/technology/memory-chip-crunch-to-hit-tvs-and-consumer-devices-hardest-in-2026" target="_blank" rel="noopener">disrupted multiple electronics markets</a> and product planning for 2026. Several industry executives told Nikkei Asia that Chinese memory chipmakers' expansions will mainly serve local demand.
DRAM temporarily stores data, enabling rapid access that directly affects system performance. HBM, which is built from stacked DRAM chips, is critical for AI computing because it allows fast data transmission. NAND flash memory, meanwhile, serves as the primary storage in electronic devices, with rising AI inference, or deployment, demand driving increased usage.
China's CXMT is the world's fourth largest DRAM maker, behind Samsung, SK Hynix, and Micron, with a market share of about 11.1% by capacity, according to Yole Group. That figure is expected to grow to about 13.9% by 2027, Yole estimated. CXMT already counts many major tech players such as <a href="/company/alibaba">Alibaba</a>, <a href="/company/tencent">Tencent</a>, <a href="/company/bytedance">ByteDance</a>, <a href="/company/lenovo">Lenovo</a>, <a href="/company/xiaomi">Xiaomi</a>, <a href="/company/oppo">Oppo</a>, and Vivo among its clients, according to an IPO sponsorship Letter by China International Capital Corporation.
CXMT has already successfully produced older-generation DDR4 and LPDDR4 products and has decided to migrate to more advanced DDR5-class DRAM. The company also aims to support domestic demand for HBM, as supplies have been cut off by US restrictions.
At the end of 2025, it filed an IPO application to the Shanghai Stock Exchange, saying it aims to raise RMB 29.5 billion (USD 4.1 billion) for production line upgrades and R&amp;D.
YMTC has also gained market share thanks to China's policy-driven demand for local supplies. Yole estimates that its share by wafer capacity is about 12% in 2025 and could expand to 15% by 2028.
"Chinese memory chipmakers are expanding capacity to meet surging demand, based on our supply-chain checks," said Gary Huang, head of Asia at Yole Group. "The global memory supply crunch has created a favorable environment for emerging players, giving them healthier financial conditions to support expansion," he said.
"China's push for localization and government support are also helping. Together, these factors are encouraging more companies to adopt alternative sources of memory supply, creating new business opportunities for these players," Huang added.
YMTC and CXMT did not respond to Nikkei Asia's requests for comment.
This article first appeared on <a href="https://asia.nikkei.com/business/tech/semiconductors/china-s-cxmt-and-ymtc-to-massively-expand-memory-output-amid-global-crunch">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

China's CXMT and YMTC to massively expand memory output amid global crunch

Semiconductors

Chinese <a href="/industry/ev">electric vehicle</a> leader BYD looks to quickly build out its Japanese sales network by launching a multitude of tiny dealerships with just one or two cars on display.
BYD has already opened dealerships in major cities and prefectural capitals. Starting in 2026, the company will speed up its expansion elsewhere by thinking small.
"We intend to cover small, regional commercial areas in order to sell mini EVs," said Atsuki Tofukuji, president of BYD Auto Japan.
The sites will be in outlying cities of fewer than 500,000 people. Each will have a couple of vehicles on display at the most, and the openings will be completed quickly.
Car dealerships are usually built large to fully convey their brands' unique identities. BYD is taking the opposite tack because of the <a href="https://asia.nikkei.com/business/automobiles/electric-vehicles/byd-unveils-first-kei-minicar-to-break-open-the-japanese-ev-market">Racco mini EV</a>, which launches this summer and was developed specifically for Japan.
The Racco's spacious interior was inspired partly by the Honda N-Box, Japan's bestselling minicar. Even though BYD is known for its cost-competitive infrastructure in China, developing a vehicle dedicated to the Japanese market carries risks for any global company.
The mini-dealerships will put the Racco front and center. Such minivehicles account for roughly 40% of new car sales in Japan and are in demand in rural areas.
By focusing on the Racco, BYD aims to break into Japan's minicar market.
BYD entered Japan's passenger vehicle market in 2023. Japanese consumers have been known to turn a critical eye toward Chinese brands. From the start, increasing dealerships was a key priority for BYD in boosting brand recognition and gaining trust.
BYD had called for expanding to 100 locations by the end of 2025. The company aims to cut costs by occupying such vacant properties as former convenience stores—a step that halves the time to open a dealership.
Foreign automakers typically design their dealerships with materials and furnishings sourced from their home countries so that they can present the desired concepts for their brands. BYD has instead prioritized speed in Japan. With permission from corporate headquarters in China, BYD Auto Japan is sourcing most of its dealership design materials locally.
BYD had 69 locations, including sites with planned openings, covering 38 prefectures by the end of 2025, more than twice the 29 locations that <a href="/company/tesla">Tesla</a> has opened since entering the Japanese market in 2014.
BYD missed its target partly because of such issues as the difficulty of finding properties. Tofukuji feels a strong sense of urgency at the slower-than-expected progress as the Racco's launch looms.
"The number of vehicle models will increase, but this number of stores will result in lost sales opportunities," Tofukuji said.
In 2025, BYD sold 3,731 EVs in Japan after excluding commercial vehicles, up 68% on the year. It now ranks fifth in the segment among automakers, but sales have grown more slowly than hoped. This owes partly to lingering consumer concerns about Chinese cars.
BYD's pricing strategy hints at a sense of desperation. Last September, the company discounted all models sold in Japan for a monthlong period. The price cuts ranged from JPY 500,000 to JPY 1.17 million or about USD 3,200–7,500, making BYD's models the cheapest compact EVs in the country.
While this gambit did increase sales in September, discounting is not a sustainable strategy.
Tesla sold some 10,600 units in Japan in 2025, up 90% or so from the previous year. The record sales volume surpassed 10,000 vehicles for the first time ever.
Tesla's strategy of focusing on customer service at directly operated stores, on top of online sales, has proven successful. The American automaker is also expanding its network of locations in Japan.
"With the launch of electric minicars, we have to increase our sales" volume, Tofukuji said, adding that moving 10,000 units annually is "a major goal."
To achieve this, BYD would need to sell over 6,000 more vehicles this year than in 2025. Tesla took 11 years to break the 10,000 mark.
There are reasons why BYD needs to reach this ambitious goal quickly.
Japanese automakers are rolling out electric mini vehicles of their own. Daihatsu Motor has <a href="https://asia.nikkei.com/business/automobiles/electric-vehicles/daihatsu-debuts-mini-commercial-evs-with-industry-leading-257-km-range" target="_blank" rel="noopener">launched mini commercial EVs</a> developed with partners including Toyota Motor. Top mini vehicle maker Suzuki Motor plans to come out with electric passenger minicars starting in fiscal 2026.
Japanese players have far larger dealership networks in Japan than BYD. Daihatsu has around 700 nationwide, rising to 6,000 when including both full-fledged dealers and such smaller local outlets as auto repair shops.
BYD has been expanding its sales channels in other ways. It has set up shop on the Rakuten Ichiba <a href="/industry/e-commerce">e-commerce</a> website—a rarity for an automaker—and has run limited-time campaigns at malls operated by Aeon, Japan's largest retailer.
BYD's growth has suffered in China amid intensifying price competition and new rivals. It sold about 3.3 million vehicles weighing less than 6 metric tons there in 2025, down from 3.65 million in 2024, according to S&amp;P Global Mobility.
The automaker is looking to exports as a solution to its challenges. Given this strategy, Japan is an increasingly important market.
Tofukuji has declared 2026 "the first year of the new energy vehicle era," reflecting both BYD's determination to expand its Japanese sales and concern that if it does not do so now, it will be hard-pressed to catch up.
This article first appeared on <a href="https://asia.nikkei.com/business/automobiles/electric-vehicles/byd-to-rev-up-japan-sales-with-ev-mini-dealerships">Nikkei Asia</a>. It has been republished here as part of 36Kr’s ongoing partnership with <a href="https://www.kr-asia.com/nikkei-teams-up-with-36kr-in-asia-tech-news-coverage/">Nikkei</a>.

BYD to rev up Japan sales with EV mini dealerships

Japan

<a href="/company/lenovo">Lenovo</a> reported record revenue for its December quarter and sharply higher operating profit, but net income fell as restructuring charges and other non-operating items weighed on the bottom line.
Revenue rose 18% year-on-year to USD 22.2 billion for the third quarter of fiscal year 2025–2026, while operating profit increased 38% to USD 948 million, supported by scale and a higher contribution from premium offerings. Gross margin declined 0.6 percentage points to 15.1%.
Profit attributable to equity holders fell 21% to USD 546 million, even as operating profit rose. The divergence captures the quarter’s central tension. Lenovo is accelerating investment in <a href="/industry/ai">artificial intelligence</a> across devices, infrastructure, and services. At the same time, it is absorbing near-term costs to reshape parts of its portfolio, particularly its infrastructure business, while component prices continue to rise.
On an adjusted basis, profitability improved. Adjusted profit attributable to equity holders increased 36% to USD 589 million, and adjusted net income margin expanded to 2.7%. The company excluded items including a USD 285 million one-time restructuring charge tied to infrastructure solutions and enterprise sales, and a USD 186 million non-cash fair value gain on warrants.
<h3>A quarter shaped by AI and an infrastructure reset</h3>
Lenovo centered its earnings call on AI, arguing that growth is increasingly linked to what it calls “hybrid AI,” a combination of AI-capable personal devices, enterprise infrastructure, and services. The company said AI-related revenue rose more than 70% year-on-year and accounted for roughly one-third of group revenue.
Beyond headline growth, the segment mix shows where the company is seeking improvement. It is pushing higher-value categories while relying on operating leverage to defend profitability, even as costs rise and supply constraints persist.
The intelligent devices group (IDG) remained Lenovo’s largest unit and primary profit driver. Revenue increased 14% to USD 15.8 billion, and operating profit rose 15% to USD 1.15 billion.
Lenovo said its global PC market share reached 25.3% for calendar year 2025, citing continued leadership and share gains.
Management indicated that near-term market dynamics are likely to be shaped more by pricing and mix than by unit growth. It pointed to memory shortages and higher component costs, arguing that higher average selling prices and a shift toward high-end, AI-focused PCs could offset weaker unit demand in value terms.
The infrastructure solutions group (ISG) again outpaced overall company growth, with revenue rising 31% to USD 5.18 billion. The segment posted an operating loss of USD 11 million, an improvement from prior quarters and close to breakeven.
Lenovo booked a USD 285 million restructuring charge for ISG and said the program is expected to generate more than USD 200 million in annualized net savings over three years. The objective is sustained profitability in infrastructure solutions.
Management linked the restructuring to a shift in the AI market. Much of today’s AI spending has focused on training large models in public cloud data centers. Lenovo is positioning for the next phase, when companies deploy AI applications on premises and at the edge, a process known as inferencing, where trained models generate results in real time.
If enterprise demand for inferencing accelerates, a leaner cost base and a portfolio aligned with enterprise deployments could help turn growth into consistent profit. If adoption is slower than expected or competition intensifies, the payoff from restructuring could take longer to materialize.
Lenovo also cited growth in AI servers and its “Neptune” liquid cooling technology, as well as a strengthening infrastructure pipeline. It did not provide detailed figures.
The "solutions and services" group (SSG) remained the most stable and profitable segment. Revenue rose 18% to USD 2.65 billion, and operating profit increased 30% to USD 596 million. Operating margin was approximately 22.5%, near a historical high. Lenovo attributed the performance to a greater mix of managed services, and project- and solutions-based work.
Management positioned TruScale, its as-a-service offering, as a way for customers to move spending toward operating expenses for greater predictability, particularly in an environment of volatile component pricing.
<h3>Margin defense hinges on pricing and execution</h3>
The quarter points to solid operational execution. Operating profit grew faster than revenue, and cash generation remained positive, with USD 952 million in operating cash flow and USD 451 million in free cash flow.
At the same time, the figures underscore the costs embedded in Lenovo’s strategy.
Gross margin declined year-on-year, and management acknowledged higher component prices, especially memory, alongside supply-demand imbalances. Sustaining premium pricing and product mix without sacrificing share will be critical, as will procurement discipline and cost control.
The restructuring of ISG is the most consequential move in the quarter. Lenovo is accepting near-term earnings pressure in exchange for a lower cost base and a portfolio repositioned for enterprise AI demand. The targeted savings are material. Execution risk remains significant.
<h3>Outlook</h3>
Management said component cost inflation, particularly in memory, is likely to persist and could pressure unit demand, even if market value holds up through higher average selling prices and premium mix.
Lenovo expects to begin shipping Kira- and Qira-embedded devices next quarter, positioning personal AI features as a near-term catalyst.
The company also expressed confidence that it can deliver double-digit growth in its PC and infrastructure businesses over the next several quarters, citing supply chain resilience as a key support.
Taken together, Lenovo has delivered a robust quarter while resetting its infrastructure business for a different phase of AI demand. The next test is whether it can convert AI-related growth into sustained profit expansion while defending margins in a higher-cost hardware cycle. It needs to also show that the restructuring delivers results on the timeline management has outlined.

Lenovo profit slips in latest quarter as restructuring offsets gains

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