Chinese tech heavyweight Lenovo Group Ltd is expanding its global manufacturing footprint with a new factory in Ullo, Hungary. The plant focuses on building server infrastructure, storage systems and high-end personal computer workstations used by its customers throughout Europe, the Middle East and Africa.

This is Lenovo's first in-house manufacturing facility in Europe and it represents a significant economic potential for both the private and public sectors in Hungary with increased production capacity, greater potential for collaboration with local vendors and the creation of new jobs, Lenovo said.

According to the Beijing-based company, the plant, which officially opened on Tuesday, already employs over 1,000 full-time workers in a variety of engineering, management and operational roles, with numbers continuing to increase as the facility moves towards full capacity.

Strong infrastructure, skilled labor and a location in the center of Europe made Hungary a natural choice for Lenovo to place its first European in-house manufacturing facility. In addition, part of Lenovo's investment has been supported by local government incentives through the Hungarian Investment Promotion Agency.

Covering almost 50,000 square meters across two buildings and three floors, the new site is one of Lenovo's largest manufacturing facilities. The production line can produce more than 1,000 servers and 4,000 workstations a day－each one built specifically to customer requirements.

Francois Bornibus, senior vice-president of Lenovo, said, "With our manufacturing facility in Hungary officially open, we've reached a profound milestone in our global manufacturing network optimization and evolution."

Hungary's well-connected location puts Lenovo much closer to its European customers so that the company can fulfill and sustain their needs while remaining at the forefront of innovation, Bornibus said.

"As our business continues to grow around the world, this incredible new facility will play a key role in our plans to ensure future success and bring smarter technology for all to Europe more sustainably, quickly and efficiently," Bornibus added.

Esik Robert, CEO of the Hungarian Investment Promotion Agency, said: "We are delighted that Lenovo, an industry leader with a long-established history in global manufacturing, has selected to cooperate with us and locate its new facility in Hungary. With the site now officially open, we expect to see new collaboration opportunities for local suppliers to contribute towards Hungary's prosperous economic environment."

The Hungary facility is part of Lenovo's global manufacturing and supply chain strategy that serves customers in 180 markets from more than 35 manufacturing sites in such countries as Argentina, Brazil, China, Germany, Hungary, India, Japan, Mexico and the United States.

In May 2022, Lenovo jumped seven places in a year to No 9 in the market research company Gartner Inc's list of Global Supply Chain Top 25 for 2022. The recognition highlights Lenovo's leadership as a purpose-driven organization and operational center of excellence in the global supply chain community.

Lenovo is widely recognized for its international hybrid manufacturing model that includes a mix of both in-house and contract manufacturing, said Xiang Ligang, director-general of the Information Consumption Alliance, a Beijing-based industry association.

This is a key source of competitive advantage for Lenovo, as it provides greater efficiency and control over product development and supply chain operations, enabling customer needs to be responded to more effectively, Xiang said.