Micro-Star shares up on China MP3 deal rumors

Shares in Micro-Star International Co (微星科技), a top-tier motherboard maker, rose yesterday after a report said that it has received a new order from a top Chinese MP3 player brand.

The company's stock inched up 0.4 percent to close at NT$24.6 (US$0.8) yesterday on the Taiwan Stock Exchange.

"We didn't receive such an order," said Albert Lin (林威豪), a spokesman at Micro-Star, during a telephone interview yesterday, denying a report from the Chinese-language United Evening News that it has obtained orders from Newman (紐曼), the top MP3 player brand in China.

The MP3 player market in China is dominated by domestic brands with Newman's share standing at 19.6 percent, while DEC (中恆) has 9.7 percent and Aigo (愛國者) has 7.7 percent, the paper said, quoting figures from the Beijing-based IT consulting firm CCID Consulting (賽迪顧問).

Foreign brands such as Apple Computer Inc's popular iPods are losing out because of a lack of familiarity in working with domestic channels, it said, adding that Micro-Star is the No. 8 brand there.

In a bid to diversify its business portfolio, Micro-Star started to tap into the consumer electronics segment in 2003, unveiling own-brand and contract manufactured MP3 players, portable media players as well as Bluetooth and wireless gadgets.

In March this year, the company showcased an MP3 prototype that uses solar energy to prolong battery life. But so far it has not committed to mass production of the new gadget.

"We expect consumer electronics products to be our strong revenue driver next year," Lin said.

He said that as more focus is now geared toward consumer electronics and notebook products, their contribution to the company's overall revenues next year will increase considerably.

Driven by strong shipments, the company said it will meet its notebook shipment target of 600,000 units this year, up from last year's 200,000 units.

Business segments

Consumer electronics and the notebook segment will account for 20 percent of total sales this year, while barebones systems and servers will take up another 20 percent, Lin said.

Its core business -- motherboards and graphics cards -- will contribute as much as 60 percent, he added.

Micro-Star yesterday announced revenues for the first 11 months of the year at NT$68.18 billion, a rise of almost 8 percent from NT$63.19 billion for the corresponding period last year.