The Public Investment Fund (PIF) of Saudi Arabia and Chinese technology company Lenovo have initiated construction on a new manufacturing facility in Riyadh, a significant development in their $2 billion strategic partnership.

The groundbreaking ceremony took place during the LEAP 2025 Tech Conference in the city, which runs from February 9 to February 12.

Giovanni Di Filippo, President of Infrastructure Solution Group for Europe, the Middle East and Africa at Lenovo, stated that the new facility will span 200,000 square meters and is projected to commence production in 2026. Di Filippo emphasized the multifaceted nature of the site, which will not only focus on manufacturing but also serve as a customer experience center and a research and development hub, underscoring the commitment of Lenovo to Saudi Arabia.

The partnership is anticipated to create approximately 15,000 direct jobs and 45,000 indirect jobs within the next two to three years.

In its first operational year, the facility aims to produce 2 million products labeled as 'Saudi Made,' with production ramping up to 9 million units subsequently.

Di Filippo indicated that the first production of personal computers is expected to start within 12 to 18 months, contingent upon construction timelines.

Prioritizing Saudi Arabia for shipping, Di Filippo noted that the facility is designed to serve not only the domestic market but also the Gulf Cooperation Council (GCC) region and the African continent, aligning with Saudi Vision 2030 goals.

An advanced manufacturing and technology center focusing on artificial intelligence and robotics was also announced, reinforcing PIF’s strategy to enhance local manufacturing capacity.

The objective is to increase local content in manufacturing from 47 percent in 2024 to 60 percent by 2025, aiming to contribute $320 billion to the non-oil GDP and create 1.8 million jobs.

Di Filippo further explained that the Riyadh facility's R&D center is intended to gather insights into local market demands, catering specifically to ministry and enterprise customer needs.

Yuanqing Yang, Chairman and CEO of Lenovo, described the partnership with Alat as a means to bolster Lenovo’s presence and capabilities in the Middle East and Africa, particularly in light of Saudi Arabia's economic growth.

The groundbreaking follows the completion of Lenovo's $2 billion investment in Alat, finalized after obtaining necessary shareholder and regulatory approvals.

Originally announced in May and completed in January, the deal includes the issuance of three-year zero-coupon convertible bonds to establish a sustainable partnership.

The new manufacturing hub will augment Lenovo’s extensive global production network, which comprises over 30 manufacturing sites across several countries, including China, Germany, India, Japan, and the United States.

Lenovo has indicated that this facility will enhance supply chain stability and improve service delivery in the MEA region.

Additionally, Lenovo plans to establish its Middle East and Africa regional headquarters in Riyadh, enhance R&D initiatives, and launch a flagship retail space in the Kingdom.

Amit Midha, CEO of Alat, highlighted the economic significance of this collaboration, emphasizing pride in becoming a strategic investor in Lenovo and participating in the company's growth trajectory as a leading global technology enterprise.

Beyond manufacturing, the partnership includes business development initiatives that will leverage Alat’s regional networks and market knowledge.

Alat has ambitious plans to develop advanced manufacturing across various sectors, targeting production across 34 product categories within nine business units, which feature semiconductors, smart devices, electrification, and AI infrastructure.

Lenovo, recognized by Gartner as having one of the top 25 supply chains, anticipates that the Saudi facility will enhance its operational capabilities in the region while supporting the Kingdom's aspirations to establish itself as a global technology and manufacturing hub.