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Gigabyte and ASUS shake on the deal - Image courtesy HKEPC
Asustek and Gigabyte have just agreed to a major combined arms strategy

So it's not as big of news as the recent AMD and ATI merger, but cross-town Taipei rivals Asustek and Gigabyte have just announced a major joint venture between the two companies.  The new joint venture will effectively let Gigabyte use Asustek facilities for manufacturing of "Gigabyte" branded video cards and motherboards. 

Gigabyte will own a 51% stake in the company, with Asustek picking up the other 49%.  HKEPC (English) reports the deal is valued at approximately $244M USD, and that the new joint venture will become official January 1, 2007.  Neither company would comment on the effect of the joint venture on existing manufacturing, claiming that only the legal proceedings to start the company have been publically announced at this time.  The joint venture will also get a new name, but both companies are also tight lipped about that as well.

Analysts are already heralding the venture as a major milestone for the PC industry.  Occasional DailyTech blogger and T-Break Editor-In-Chief Abbas Jaffar Ali claimed "By combining the manufacturing capability of ASUS with the channel presence of Gigabyte, the two companies will be able to put tremendous pressure on the other Taiwan manufactures, especially Foxconn."  Peter du Preez, Universal Abit Marketing Manager, added "It all started way back when ULi and NVIDIA joined -- since then, well, it's been all about grabbing a buddy."

ASUS and Gigabyte have traditionally held the title of tier-1 motherboard manufacturers in Taiwan.  This title was also shared by Microstar International -- also a major player in motherboard, VGA and server manufacturing.  However, as PC component manufacturing began to move to mainland China, Foxconn and ECS-Tatung have risen to become the dominant component manufacturers. 

ASUS has strong manufacturing ties with Sony (Playstation 3), Apple (MacBook).  The company has also attempted to enter into the retail market with its own lineup of notebooks and digital audio players, with mixed success.  Earlier this year ASUS stated that the company would split its OEM and retail manufacturing by 2008, in an effort to give the manufacturing half of the company more room to compete with the "Big Four."

That's not to say ASUS and Gigabyte have idle competition.  ECS, currently the largest motherboard manufacturer in the world by volume, just sealed a deal to acquire Uniwill, making the new company even more massive than it was before.


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RE: Bad news for consumers too !
By sh3rules on 8/8/2006 9:53:21 AM , Rating: 2
In my limited experience with them (two mobos), Asus products have been hit-or-miss. I've used MSI and Epox which may not have been as high-performing (comparatively speaking, since the sockets were different) but their reliability and customer support was much better.


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