HPE to start making $1 billion worth of high-volume servers in India

US-headquartered Hewlett Packard Enterprise (HPE) on Tuesday announced plans to start manufacturing in India and that it will produce some of its high-volume servers worth $1 billion in the first five years.

For this, HPE has partnered with domestic manufacturer VVDN Technologies. These high-runner servers, will be manufactured at the VVDN Technologies plant in Manesar in Haryana, the company said in a statement, adding that this manufacturing operation will support the growing demand from customers in India and further strengthen and diversify HPE’s global supply chain.

Antonio Neri, President and CEO, HPE, said that India is a strategic market for HPE’s business, talent, innovation and now, manufacturing. “Customers in India continue to turn to HPE to help them digitally transform, and our 14,000 team members here play a key role in driving our edge-to-cloud strategy,” he added.

Som Satsangi, SVP and managing director of HPE India, along with Puneet Agarwal, CEO of VVDN Technologies, met Ashwini Vaishnaw, Minister for Railways, Communications, Electronics and Information Technology, to discuss the details of this initiative.

“We welcome HPE’s decision to start their manufacturing line in India, as it will enhance domestic production capacities,” Vaishnaw said.

“The recently announced Production Linked Incentive (PLI) Scheme 2.0 aims to make India a global hub for Electronics System Design and Manufacturing (ESDM). We believe large-scale IT hardware manufacturing will help in broadening and deepening the manufacturing ecosystem,” the minister added.

HPE has its largest workforce outside the US in India. Its largest campus in the world, at Mahadevapura in Bengaluru, is home to many of HPE’s worldwide product development resources. More than 4,000 of HPE’s most distinguished scientists, engineers, and research teams are based out of HPE’s R&D hub at this campus.

In 2019, HPE announced an investment of $500 million over five years in India to grow its operations and team member base. Since then, HPE has created 2,000 net new jobs in the country and invested in multiple new campuses and offices. 

“India is expected to grow into a $1 trillion digital economy, and we believe that ‘Make in India’ will help accelerate this vision. With local manufacturing, HPE will be able to better serve the needs of our customers across industries and segments,” said Satsangi.

India has emerged as an attractive destination for manufacturing activities, with various companies considering investments in the country. Apple, for instance, has already partnered with Foxconn, one of its key suppliers, to manufacture iPhones in India.

Alphabet's subsidiary, Google, also said  last month, it is exploring the possibility of shifting a portion of its Pixel smartphone production to India, according to a report by Bloomberg. The company has initiated early discussions with domestic suppliers as it looks to capitalise on India's growing potential as a manufacturing hub.

Further, IT networking firm Cisco announced in May its manufacturing plans in the country to broaden its global supply chain and is expected to generate $1 billion in total revenue, including exports.

The government is also working on creating an ecosystem to make India a semiconductor hub in the next decade. During Prime Minister Narendra Modi's visit to the US, a slew of semicon companies including Micron and Applied Materials and more recently Microchip also announced their investment plans in the country.