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MSI to sell its OEM motherboard division?

Posted on Thursday, May 29 2008 @ 04:21:26 CEST by

DigiTimes heard MSI is considering to sell its motherboard manufacturing business to EMS Flextronics International, while keeping its brand motherboard business.
MSI has recently hired a consultation firm to evaluate its operation efficiency and expects to reorganize the company structure to fully focus on its branded business. The company will initially adjust its motherboard production line's overlapping personnel and resources.

MSI's current motherboard shipment proportions between system vendors (OEM) and channel (brand) are split around 50:50. However, its OEM business returns low profits and its overlapping OEM and brand businesses, including related resources and personnel, are currenly in conflict, creating a business environment that neither benefits its cost saving or brand operation strategies. So the company has decided to focus on its brand business and sell off its OEM business to Flextronics, the sources stated.

If the company pursues such a course, it will initially outsource motherboard orders to Flextronics and then evaluate its options for outsourcing orders to other OEMs in order to save costs.

The two companies are currently negotiating a sales price and the sources expect that any announcement about purchase or cooperation would be made in the third quarter.
However, MSI chairman Joseph Hsu denies he's thinking of selling the motherboard business.



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