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Monday, January 24, 2005
New MSI China plant operating below expectations

Micro-Star International?s (MSI) new plant in Kunshan, Jiangsu Province (China), which was completed in the second half of last year, fulfilled just 60% of received orders in the fourth quarter, according to company chairman Joseph Hsu.

Confirming the volatility of the market and the difficult conditions that makers are facing, Gigabyte executive vice president Richard Ma said that Gigabyte has no plans to ramp up its Ningbo (Zhejiang Province) plant in the near future, but it is planning to outsource about 20% of its motherboard production to Foxconn Electronics (Hon Hai Precision Industry) this year.

With the power and container shortage in the area unlikely to ease in the short-term, MSI will focus on production of graphics cards and OEM motherboards at its plant in Baoan, Guangdong Province (China), while producing notebooks and own-brand motherboards in the Kunshan plant this year, Hsu said.

Shortages of containers, parts, components and electric power have all contributed to MSI?s shortfall, said Hsu. The main production bases of Asustek Computer (Suzhou, Jiangsu Province) and Gigabyte Technology (Ningbo) are also in Eastern China. Sources indicate that the three companies not only compete for supplies, but their combined presence is also pushing up labor costs.

Gigabyte?s Ningbo plant is concentrated on system products and its Dongguan (Guangdong Province) plant focuses on motherboards and graphics cards.

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