MSI reportedly plans on tackling 'the most challenging year since the company was founded', with 15-30% price raises, making DDR5 motherboards DDR4 compatible, and increasing AI server revenue
The memory crisis seems to have put the squeeze on basically everyone, other than those creating the memory. Even well-known gaming brand MSI appears to be struggling and plans on increasing its prices to offset ongoing problems.
According to the United Daily News (machine translated), MSI is reportedly planning to increase the prices of its gaming products by 15-30%. Huang Jinqing, general manager of MSI, reportedly states: "This year is the most challenging year since the company was founded." (via Tom's Hardware)
Alongside this candid admission, Jinqinq estimates the PC market will decline by 10-20% due to a supply shortage and the rapidly rising costs of memory. Jinqinq argues that a concentration on high-end products, the leveraging of long-term contracts with memory manufacturers, and upgrading DDR5 motherboards to support DDR4 will increase revenue on the gaming side. Elsewhere, it reportedly plans on growing revenue from servers, too.
Hybrid motherboards aren't unheard of. ASRock showed off the H610 combo late last year, but it's still very rare. However, as the memory crisis rages on, we could see more attempts at the same design.
Hsu Hsiang, MSI chairman, reportedly said it's not MSI's goal to buy whatever volume of memory it can afford, with the company instead moving away from the low end of the market for now. Naturally, as long as its share of the market doesn't decrease more than the price hike, it can still benefit from charging more.
Reportedly, increasing the stock of more expensive gear and raising the price of the low-end will funnel people towards the higher end, selling less stock but earning better margins in the process. The United Daily News notes potential fears of increasing price rises, pushing consumers to buy PCs before they get even more expensive.
Notably, this isn't too dissimilar to the business plan put forward by Asus just last week in its earnings report. Asus CFO Nick Wu reckons that Asus leveraging its "high-end brand value and high-end product mix" will help it weather the storm of the memory crisis.
Asus hasn't specifically announced any price hikes, but it has announced a focus on the high-end, with its high margins and niche appeal, over the mass appeal of the budget end of the market.
Both MSI and Asus have noted AI as a way to recoup some costs, which is somewhat ironic given that it is the cause of that memory stock/price instability. MSI plans on investing more in AI servers—it just has to hope it's not hung out to dry, like nearly everyone else has been with regard to memory. I suppose if you can't get out of the pit, the only way through is down.