May 28, 2001

According to statistics released by the Market Intelligence Center (MIC) of the government-backed Institute for Information Industry (III), overseas manufacturing of Taiwan motherboard companies has climbed from 44% in 1999 to 48% today, and China has by far the largest portion.

Due to cost considerations and that much of their supply chain has moved to China, the percentage of Taiwan's motherboard manufacturing may pass 50% this year, as Taiwan's first and second -tier manufacturers continue moving their production overseas. Motherboard factories owned by Taiwan's first-tier makers have sprung up along China's east coast, with larger concentrations in places like Suzhou and Guangdong Province.

As the global PC market continues to falter, demand for low-priced motherboards will continue driving the westward movement, and many insiders believe it is already a forgone conclusion that China production will pass the 50% mark this year.

Some smaller competitors in the line believe that China's output capacity is already more than the market demands. Therefore, as more China production lines of first-tier companies go online, the smaller ones, rather than building their own factories in China, are beginning to outsource to those with lower costs