- The Greater Chinese motherboard industry's shipment volume reached a new record high in the fourth quarter of 2003, growing 24.5% year on year to hit approximately 36.6 million units. This surge in growth was a result of peak sales season in the European and US markets, which was accelerated by growing PC replacement demand.
Continuing price wars between makers and price reduction strategies by CPU (Central Processing Unit) and chipset makers led to a decline in motherboard ASP (Average Selling Price), ending the trend of rising prices seen in the third quarter. ASP fell 3% from US$62.9 in the third quarter of 2003 to US$61.1 in the fourth quarter. In addition to strategic price cuts, many of the motherboards shipped in the fourth quarter were extensions of existing product lines, allowing little room for price increases. However, with the year on year volume increase in the fourth quarter, shipment value grew 19.6%.
Heading into the first quarter of 2004, the industry will encounter the traditional weak retail season. Additionally, the transition in specifications will likely inspire a conservative attitude among vendors, who will not be aggressively outsourcing. Such developments are expected to take some of the wind out of motherboard shipment growth; however, overall Greater Chinese motherboard shipment volume will have an opportunity to grow 10% year on year in the first quarter.
Throughout 2004, demand driven by price reductions, PC replacement demand in European and US markets, barebone volume growth, and demand from emerging markets in Asia Pacific and Eastern Europe, are all expected to bring 12% annual growth in the Greater Chinese motherboard shipment volume. Shipments of motherboard adopting new CPUs and chipset are expected to drive ASP upwards in the short term. However, makers generally believe that the market demand is limited; added unrelenting price wars, overall shipment value performance remains to be seen.