- With the global economic rebound and owing to expectations that PC replacement effects would emerge, Greater Chinese motherboard industry shipment volume grew 7.0% year on year to approximately 29.2 million units in the second quarter of 2004. Volume declined 11.9% sequentially due to seasonal effects in Europe and low demand in the Chinese consumer market, which resulted in high April inventories. Although liquidations in May and June brought inventories to normal levels, total quarter growth was slowed, resulting in lower than expected gains.
Motherboard makers continued to launch value-line offerings to gain a larger share of the clone market in the second quarter of 2004. The price competition further intensified as makers fought for orders to fill the gap in production capacity. In addition, impacted by delayed rollouts of next-generation offerings, motherboard ASP (Average Selling Price) failed to edge up. Instead, ASP dropped over 10% from US$61.9 in the first quarter to US$55.2 in the second quarter. Motherboard shipment value shrank 1.5% year on year to US$1,612 million.
In the third quarter of 2004, the market is expected to enter the strong retail season and corporate and consumer spending are beginning to heat up. Coupled with price reductions expected for key components such as CPU (Central Processing Unit) and chipsets in August, motherboard shipment volume is anticipated to expand. However, the recall of ICH6 Southbridge chips has delayed the rollout of Intel's new 915 series. Other components such as graphics chips for PCI-Express x16 and DDR2 have also been produced in limited volume and sport high price tags, further failing to significantly stimulate consumer demand. Therefore, the restraint in contract consignment is expected to continue until early August. Although shipment volume is unlikely to repeat the impressive year on year performance previously seen, it is anticipated to grow over 10% sequentially.