Maharashtra, Apr 22 (KNN) Mega Networks, one of India's leading computer hardware companies, plans to set up a new factory in Maharashtra to locally manufacture artificial intelligence servers.

The company will invest Rs 350-400 crore in the upcoming fiscal year 2024-2025 for the new facility, according to chief executive Amrish Pipada.

The initial investment will be funded through internal funds and debt of Rs 100-120 crore, with the remainder coming fr0m long-term debt and private equity funding.

Mega Networks is one of just two Indian firms selected for the government's production-linked incentive (PLI) scheme 2.0 for IT hardware manufacturing.

The new AI servers, optimised with Intel's latest chips and launched in February, are modular systems designed for generative AI, high-performance computing, and data center use cases.

Pipada said Mega Networks has already identified potential orders worth nearly Rs 1,000 crore for the servers, with confirmed bookings of Rs 150-200 crore so far.

"The funnel we have right now for AI servers is huge. If we are able to convert even 20 per cent, our business will grow by 100-200 per cent," Pipada told ET.

To support this anticipated growth, the company plans to increase its workforce fr0m the current 110 employees to around 400 over the next year, adding roles across R&D, finance, marketing, and sales teams.

Mega Networks' revenue grew 30 per cent year-over-year to Rs 300 crore in FY24. With the AI server manufacturing, the company is targeting Rs 1,000 crore revenue within two to three years, according to Pipada.

However, supply chain constraints remain a key challenge, with delivery times as long as 30-50 weeks for electronic components that currently need to be imported. Pipada emphasised the need for government support to build up the domestic ecosystem for AI hardware manufacturing.

(KNN Bureau)