Monica Chen, Taipei; Joseph Tsai, DIGITIMES [Friday 9 January 2009]
One of the top-four motherboard makers, Asustek Computer, Gigabyte Technology, Elite group Computer Systems (ECS) and Micro-Star International (MSI), will drop out of the market within the next few years since the limited expansion of the market will not be able to support the growth of the four giants any more, according to Henry Lu, vice president of products at MSI.
Notebook shipments recently hit the critical industry milestone of surpassing those of desktop PCs, pointed out Lu. Additionally, shipments of motherboards and graphics cards have been on the decline since the third quarter of 2008 indicating that the market will not see any further expansion, Lu said. The exit of some second-tier motherboard makers means the market will be able to support the top-four makers over the next three years, but not much beyond that, Lu predicted.
After the three years, one of the top-four makers will need to be eliminated from the market in order for the other three to remain profitable, said Lu. In the meantime, the makers are likely to see motherboard shipments maintain level or decline slightly.
With demand from Europe and North America dropping plus all the makers have been trying to clear inventory, non of the first-tier motherboard makers achieved their shipment goals in 2008, while some second-tier makers even saw their revenues and shipments from the motherboard segment drop by half, according to industry sources.
Asustek Computer is estimated to have shipped around 21 million motherboards in 2008. Although shipments held level on year, the company did not see any growth in profits due to a decline in ASPs, according to the sources. Meanwhile Gigabyte Technology is said to have shipped around 19 million motherboards in 2008, less than its target of 20 million, the sources said. However, branded shipments grew 14% from 14 million units in 2007 to 16 million units in 2008.
MSI shipped around 16 million motherboards in 2008, according to estimates, far less than goal of 20 million, while branded shipments were only seven million units. However, with the help from notebook and netbook product lines, the company's revenues in 2008 still broke the NT$100 billion (US$3 billion) mark.
Finally, Elitegroup Computer Systems (ECS) shipped around 21 million motherboard in 2008, with around eight million from its branded segment, the industry sources said.