MSI to increase prices of graphics cards due to global chipset shortage
The global chipset shortage woes are getting worse by the day. A report now suggests that MSI (Micro-Star International), a popular name in the PC hardware market, is planning to increase the prices of its graphics cards. Ever since the arrival of NVIDIA’s new GeForce RTX 30-series and AMD’s Radeon RX6000 GPUs last year, there has been a monumental demand. According to MSI’s chairman Joseph Hsu, the increase in graphics card prices is due to the tight supplies that may persist through the end of 2021.
Digitimes reports that at an investors conference on Tuesday, March 23, Hsu said that the end demand for PC hardware, including graphics cards, will likely stay strong for the rest of the year. Additionally, each product line’s shipments in 2021, after registering an on-year increase between 30-50% in 2020, are expected to see double-digit growths again.
Notably, MSI posted weaker-than-expected profits in the fourth quarter of 2020. Hsu said that the appreciation of Taiwan’s currency, delayed marine shipment schedules, increasing transportation expenses, and surging marketing expenses for year-end holidays all added to its overall quarterly costs.
Having said that, MSI’s profits in 2020 were still the highest-ever on an annual level. The company saw net profits rose 42% on year to arrive at NT$7.96 billion ($276.97 million) in 2020. System products, including notebooks, desktops, and monitors, contributed 43% of the company’s consolidated revenues last year, while motherboards and graphics cards accounted for 53% while other products counted for 4% of revenues. The company expects transportation expenses to fall after March as the global logistics are slowly resuming back to a normal state. With newer GPUs from NVIDIA and Intel’s 11th generation desktop processors with the new Z590 motherboards ready to arrive in the second quarter, MSI is also expecting a solid boost in gross margins.
It remains to be seen if other affected entities also decide to raise the prices of their products.