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DIY market may shrink further due to US-China trade tensions - PCSTATS.com DIY market may shrink further due to US-China trade tensions
Fri, May 17 2019 | 3:19PM | Filed under: Business / Industry| PermaLink Posted by: STAFF

Digitimes reports: "Motherboard makers have experienced sluggish demand coming from the PC DIY market, which is likely to shrink further as the US-China trade dispute escalates, according to industry sources.

The PC DIY market has seen weak replacement demand, particularly in China, while shortages of Intel's entry-level to mid-range processors remain an issue.

With the cryptocurrency mining fad dissipating, most motherboard and graphics card players have seen their revenues returning to regular levels. But those who heavily rely on the two business segments have reported sharp drops in sales for the first quarter.

With the US government threatening to extend the 25% tariff to consumer products including notebooks and smartphones, Taiwan's motherboard and graphics card players noted that the impact on their businesses will not be big since they have already increased the prices for products shipping to the US previously when the US increased the tariff to 10%. They have also prepared production sites outside of China as a precaution.

As for China's 25% retaliatory tariff on US-imported products, the firms so far have not seen major impacts.

However, fierce trade tensions are expected to result in weakening demand from the end market. China is especially important as the popularity of the country's PC DIY market is far strong than that of the US.

For motherboards, nearly half of the worldwide shipments go to China and if demand continues falling, Taiwan suppliers' sales in 2019 are expected to be severely undermined.

At the moment, the China market accounts for big portions of the motherboard businesses of Asustek Computer and Gigabyte Technology, but the proportions are relatively low for Micro-Star International (MSI), ASRock and Elitegroup Computer Systems (ECS).

MSI has reported consolidated revenues of NT$29.49 billion (US$939.26 million) for the first quarter of 2019, down 0.9% sequentially and 7.2% on year. The company achieved EPS of NT$1.55 for the quarter, weaker than NT$2.49 of the same quarter a year ago, but higher than fourth-quarter-2018's NT$0.80."

FULL STORY @ DIGITIMES

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