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MSI emerges strong in terms of Q1 2020 revenue even as PC OEMs fear inventory pile-up once COVID-19 starts abating

MSI has been able to weather the COVID-19 pandemic due to increased demand for its gaming laptops. (Image Source: MSI)
MSI has been able to weather the COVID-19 pandemic due to increased demand for its gaming laptops. (Image Source: MSI)
Sales of PC hardware have seen a sudden surge during the COVID-19 pandemic, but OEMs fear that this upward trend may reverse as the situation returns to normalcy, according to a recent Digitimes report. However, gaming laptops may be an exception as they have been witnessing good growth and are expected to continue as such with MSI leading the way with record Q1 revenues.
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The COVID-19 pandemic has brought in unprecedented changes to the way we work, and the rapid spread of the virus meant that many organizations and their production lines had to come to a grinding halt. With many people being forced to work from home to control the spread of the pandemic, the PC industry has seen a surge in sales contrary to other industries that were badly affected, according to a Digitimes report.

During the COVID-19 pandemic, due to work from home policies enforced by many organizations, sales of PCs, tablets, and gaming devices have been on the rise. However, OEMs aren't sure whether this surge in demand is only temporary and whether there is actually enough demand to meet the supply. According to Digitimes, PC manufacturers are of the opinion that this surge in demand may reverse once the pandemic starts diminishing. The saving grace, however, are the new GPUs introduced by NVIDIA and AMD such as the RTX Super Mobile cards and the Radeon RX 5600M. These GPUs are perfect for eSports gaming and thus, gaming laptops featuring these GPUs are expected to continue to sell well.

Among the several players in this space, Digitimes reports that Micro-Star International (MSI) has been able withstand the prevailing situation better than its competitors. Despite dropping 3.3% in Q1 2020 consolidated revenues, MSI has still been able to report a 24.2% growth in April revenues to the tune of NT$10.6 billion (US$351.6 million) due to increased demand for gaming notebooks. If current sales are to be considered, MSI's consolidated revenues in Q2 2020 are also expected to rise sequentially.

MSI said in a press release that the company has been able to keep up with the surging demand and forecasts an upward growth going into Q3 2020. With the advantage of having its own design and production facilities, MSI has been able to not only keep up with the demand but also introduce new laptops powered by 10th gen Intel processors and NVIDIA RTX Super Mobile GPUs for gamers and content creators. Noteworthy among these new launches are the MSI Creator 17MSI GE66 Raider, GS66 Stealth, and Prestige 14 laptops. 

Overall though, there is still some reason for concern. Most other OEMs piled-up their inventories to cater to the sudden increase in demand fearing supply chain shortages. Regions where COVID-19 has started to abate and where normalcy is returning back may, therefore, see a drop in sales of PCs and PC components. People who generally opt for new hardware purchases in the peak season after June have bought them earlier than anticipated and this may lead to a slower clearance of inventory.

Thanks to eSports and fueled by the new GPU refreshes from NVIDIA and AMD, the gaming PC segment is better poised to witness good sales in the months after June without much hindrance compared to consumer and business devices.

Right now, MSI appears to have shown good resilience to the effects of the pandemic compared to its competition. Hopefully, other OEMs will also bounce back as evidenced by recent launches from HP, Dell, and Razer among others.

Source(s)

Digitimes (Chinese, Paywall)

MSI Press Release

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Vaidyanathan Subramaniam
Vaidyanathan Subramaniam - Managing Editor - 1344 articles published on Notebookcheck since 2012
Though a cell and molecular biologist by training, I have been drawn towards computers from a very young age ever since I got my first PC in 1998. My passion for technology grew quite exponentially with the times, and it has been an incredible experience from being a much solicited source for tech advice and troubleshooting among family and friends to joining Notebookcheck in 2017 as a professional tech journalist. Now, I am a Lead Editor at Notebookcheck covering news and reviews encompassing a wide gamut of the technology landscape for Indian and global audiences. When I am not hunting for the next big story or taking complex measurements for reviews, you can find me unwinding to a nice read, listening to some soulful music, or trying out a new game.
contact me via: @Geeky_Vaidy
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> Notebook / Laptop Reviews and News > News > News Archive > Newsarchive 2020 05 > MSI emerges strong in terms of Q1 2020 revenue even as PC OEMs fear inventory pile-up once COVID-19 starts abating
Vaidyanathan Subramaniam, 2020-06- 2 (Update: 2020-06- 3)