Transcend sees better margin, strong MP3 sales

TAIPEI (Reuters) - Taiwan's Transcend (2451.TW), a maker of MP3 players and flash memory cards, said growing demand and stabilizing chip prices will drive its gross profit margin to the double-digit percent level after a slow first quarter.

"The first quarter was a bottom and the gross profit margin already rebounded to above 10 percent in April and May," Vice President Steve Chang told Reuters on the sidelines of Computex, the world's second largest PC fair.

Transcend Information's gross margin will be in the double-digit percent area in the second and third quarters, higher than 6 percent in the first quarter, he said.

Shipments of the its MP3 music players will double this year from last year, Chang said. He declined to give any figures.

Dynamic random access memory (DRAM) chip modules made by Transcend are used mainly in personal computers and servers, accounting for about 40 percent of the company's total revenues.

The 20-year-old company also sells a wider range of flash-based products such as MP3 players, flash cards for digital cameras and mobile phones and USB disks that plug into a PC's USB port and can store data.

(Reporting by Baker Li, Editing by Louise Heavens)