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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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This article is over a month old, voting and posting comments is disabled

This means what?
By MadAd on 8/8/2006 12:13:55 PM , Rating: 2
The good thing to come out of the manufacturing agreement will be a rise in the build quality of gigabyte boards however what does this mean in company terms?

According to the article, Gigabyte is getting the controlling interest (51%) but what exactly do they mean by 'joint venture'?

If the companies were merging then surely they would say that and then theyd have a new name (Asabyte, Gigasus yadda ya) but the term 'joint venture' suggests that they remain seperate companies and create a 3rd entity (Asabyte Motherboards) of which they both own part plus invest divisions of labour and manufacturing capacity... would that be an accurate assumption?

Thanks in advance to anyone that can explain the business situation clearly.




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