Micro-Star International Co (MSI, 微星科技), which makes gaming computers, graphics cards and motherboards, is forecast to see revenue fall this quarter from last quarter due to supply tightness and seasonality, Credit Suisse Group AG said on Thursday.
The COVID-19 pandemic has caused an increase in orders due to work-from-home demand, leading to supply shortages.
Many components, especially central processing units, graphics processing units (GPUs), panels, driver ICs and power management ICs, are in short supply, analysts said.
Photo: CNA
MSI’s sales are forecast to decline 2.47 percent quarterly to NT$39.75 billion (US$1.38 billion) in the October-to-December period as component constraints would likely affect the company’s computer and graphics card sales, while its motherboard business might slow down due to seasonal factors, Credit Suisse said in a note.
Sales would also come under pressure as Nvidia Corp’s new Ampere-architecture GPU faces wafer production issues, it said.
“We previously expected MSI’s system and graphics card sales could further grow in the fourth quarter, as we believe new-generation GPU platform migration should provide further uplift to its gaming-centric business,” Credit Suisse analysts led by Jerry Su (蘇厚合) wrote in the note.
“However, the 8-inch wafer constraint and display tightness could impact MSI’s system shipments in the quarter, while graphics card momentum is also facing some bottleneck given Nvidia’s new GPUs are apparently having wafer foundry production issues,” they said.
MSI’s gross margin is expected to slide to 15.4 percent, from 15.8 percent in the third quarter, due to a change in its product mix, Credit Suisse said.
Higher logistics and transportation costs could remain a burden amid the pandemic and lower MSI’s operating margin to 7.3 percent, from 7.5 percent, it said.
Earnings per share are projected to fall to NT$2.97 from last quarter’s NT$3.09, it said.
MSI last week reported net profit of NT$2.61 billion for the third quarter, up 24.4 percent from the previous quarter and 52.58 percent from a year earlier.
Last quarter’s net profit marked the highest for a single quarter in the company’s history.
Revenue rose 15.33 percent quarter-on-quarter and 24.2 percent year-on-year to NT$40.76 billion, thanks to rush orders for PCs due to stay-at-home and teleworking demand.
In the first three quarters of this year, net profit totaled NT$5.97 billion, or earnings per share of NT$7.06, up 39.6 percent from a year earlier.
MSI has seen robust orders since June, with monthly revenue hovering at about NT$13.2 billion to NT$13.8 billion. Its cumulative revenue in the first 10 months of this year reached NT$118.44 billion, an annual increase of 18.13 percent.
The 8-inch wafer constraint and GPU tightness might push the company’s orders from this quarter to next year and support its sales momentum in the first half of next year, Credit Suisse said.
However, its sales outlook remains unclear for the second half of next year.
“Overall notebook shipments should be difficult to further grow in 2021, after a higher 2020 base, while graphics card sales could continue to grow on new product launches,” Credit Suisse said.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
RSS