Micro-Star International Co (MSI, 微星科技) plans to expand its production capacity in the US, with in-house server output at its US plant likely to exceed its earlier projection of 60 percent of total output.
The company in June said that it was targeting producing 60 percent of its US server output at its California facility and outsource the remaining 40 percent. The California plant is set to produce servers, PCs and gaming products.
However, the company might adjust the in-house production figure after Washington announced a 20 percent tariff on Taiwanese goods last week and pending the outcome of a Section 232 investigation under the US Trade Expansion Act of 1962, as clients might request higher capacity in the US, a source said yesterday, speaking on condition of anonymity.
Photo: CNA
While the company had planned to begin production at its California facility this quarter, the facility is still undergoing structural reinforcement and its operations might not be ready until the end of this year, the source said.
MSI manufactures motherboards, graphics cards, notebook computers, servers, optical storage and communications devices, with operations in Taiwan, China and the US.
The company plans to set up a warehousing unit for motherboards, graphics cards and notebooks in the Netherlands, set to start operations at the end of the year, the source said.
The company has been building a new plant in Taoyuan’s Gueishan District (龜山) since March, which is to add eight surface mount technology production lines in 2027, the source said.
The Europe, Middle East and Africa region accounted for 38 percent of MSI’s revenue last year, while North America made up 25 percent, company data showed.
The company might share tariff costs with clients such as Intel Corp, Advanced Micro Devices Inc and Nvidia Corp, as well as with consumers, to maintain its gross margin, but it is unlikely to pass the full tariff rate on to retail prices, as doing so could raise prices by 10 to 20 percent and dampen consumer demand, the source said.
MSI’s PCs and notebooks that use Nvidia’s RTX 50 series graphics cards entered mass production last quarter, but consumer demand for those products has exceeded supply, the source said.
The company has no plans to raise prices for existing models, despite potential tariff impacts, but would raise prices for future products equipped with newer generations of central processing units and graphics processing units, the source said.
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