June 10,02

Taiwan's first-tier motherboard makers appear more conservative in their sales estimate now when compared to their forecasts at the end of 2001, with Asustek Computer the only exception. Despite adjustments reflecting the present market situation, Taiwan's top four still expect to take up more than 50% of the global market this year, suggesting that their international competitiveness still continues.

However, market analysts also point out that supplier adjustments of international PC heavyweights, such as the new Hewlett-Packard, may play an important role in Taiwan's top four future sales performances.

Asustek forecasts that it will ship 20 million motherboards in 2002. Elitegroup Computer Systems, the only first-tier board maker to achieve its shipment target last year, estimates that it will whip nearly 17 million motherboards in 2002.

Micro-Star International (MSI) predicts that it will ship 13.1 million motherboards and 8.6 million graphic cards in 2002, both higher than the respective market estimates of 12 million and seven million units. Last year, the company shipped around 10.3 million motherboards and 4.6 million graphic cards. With continuing orders from international OEM companies, MSI expects to see greater sales growth in graphics cards than motherboards again in 2002.

Diversifying product ranges:

Following graphics cards and barebone systems, other fields have now entered the spotlight in the first tier-motherboard makers diversification.

Biggest plans seem to be with Micro-Star, who has set up a new team under its R&D
department, dedicated to wireless communications technology developments. According to sources, MSI's development areas include the Bluetooth nadd 802.11 platforms. MSI will test the market with a recently-introduced Bluetooth-eabled 845E motherboard.

Besides this, MSI will keep further diversifying its operations. After announcing its entry into the LCD monitor market, the company said that it now plans to develop LCD PCs, Net PCs, Web PCs and game consoles.

Asustek also has made fast progress in the new field and started shipping own-brand products. Apart from cable modems and Ethernet products, Asustek has extended product lines to WLAN cards and mobile phones.

Insiders in the industry said that these diversification moves are understandable as growing demand will help them fill their capacities, however it will not be easy to reach mass production standards, even if chipsets suppliers share technology support. Also, the existing Taiwan wireless communications industry is already short of skilled RF engineers, and the motherboard companies are now recruiting from the same limited pool of talents.