Micro-Star International Co (MSI, 微星科技), a supplier of PCs and PC motherboards, yesterday said that global PC shipments would dip by as much as 20 percent this year as memorychip price surges dampen demand.
It is expected to be a challenging year for the PC industry and could be one of “the most difficult” periods since the company was established, MSI president Jeans Huang (黃金請) told an earnings conference in New Taipei City.
Huang said that severe memorychip shortages and tight supply of graphics processing units (GPU) were behind the lackluster outlook.
Photo: AP
DDR4 and DDR5 DRAM chip prices have risen sharply since the third quarter of last year, with DDR5 prices doubling, which has significantly affected the DIY motherboard market, Huang said.
MSI has secured component supplies through multiple channels, allowing it to quickly respond to market demand, he said.
The company also began strategically building up inventory last quarter and has gradually passed on cost increases to products to avoid sudden price hikes, he said.
MSI has matched the moves of local PC vendors to adjust PC retail prices, he said.
PC vendors have increased prices by 10 to 20 percent this month to reflect cost surges for memory chips and other components, he said.
Due to high demand for GPU-based artificial intelligence (AI) servers, supply of GPUs for gaming PCs is expected to be tight this year, as GPU giant Nvidia Corp is allocating more resources to AI servers, he said.
Gross margin is expected to improve this year from 11 percent last year, supported by higher average selling prices (ASP) and eased market competition, he said.
By revenue, the world PC market would remain stable or post a slight growth, supported by higher ASP and optimized product mix, Huang said.
Likewise, MSI aims to lower its share of shipments of entry-level models this year, down from more than 30 percent previously, he said.
That would help MSI’s revenue from PCs and other hardware to remain flat this year or grow slightly, he said.
System products contributed 42 percent to the company’s revenue last year, while motherboards and other components made up 50 percent, company data showed.
Server business is a different story, as MSI expects its server revenue to grow by 50 to 100 percent this year from a low base last year, as it would mainly focus on shipping Nvidia’s MGX platform, Huang said.
Servers accounted for a mid-single-digit percentage of the company’s total revenue, he said.
In addition to its manufacturing hub in China, the company started operating a new US factory earlier this year, Huang said.
More than half of its server production capacity is expected to be shifted to the US plant, he added.
The company is also expanding production capacity in Taoyuan and the Netherlands, he said.
Capacity expansion in the two locations is expected by the end of next year, he said.
MSI plans to produce AI servers and charging piles in Taoyuan, he added.
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