Greater China Motherboard Industry Analysis, 1H 2001 and Forecast
November 09, 2001 / Stanley Su
0 Page, Statistics Report
US$750 (Single User License)
Abstract
Greater China has long played a key role in worldwide motherboard supply, with Taiwanese makers leading the way. 75.4% of the world's motherboard supply was manufactured in Greater China in 1997, and MIC predicts that figure will climb to 90.5% in 2001, increasing to 95.8% by 2005. Taiwanese makers account for the vast majority of worldwide motherboard production, and their share is expected to reach 87.2% in 2001. However, motherboard production bases are gradually shifting to China, and 2001 will be the first year more than 50% of Taiwanese motherboards are manufactured at locations outside of Taiwan.
In this report, MIC will look into the industry's production statistics, product mix, business types, shipment status, and adoption rate of key components, as well as provide a review of the top ten makers. Finally, MIC will present an overall assessment and forecast the motherboard industry's development.
As motherboard manufacturers look to maintain their leading position in the industry, more and more makers are undertaking strategic moves, either to enhance their level of vertical integration, or outsource low value-add activities. As for key components, Intel will continue to enjoy a dominant adoption rate both in CPU platform and chipsets. Players that have traditionally relied on AMD CPUs will face new challenges because AMD's products are falling behind those of Intel in the high-end segment. Meanwhile, Intel's aggressive pricing strategy for low cost PCs is pushing motherboard makers to abandon AMD, who has traditionally maintained a price advantage.
Intel is determined to win back the ground lost to VIA in the chipset business by not granting VIA a license for the Pentium 4 platform chipset, and has even filed a lawsuit against VIA for patent infringment. The penetration rate of Intel's chipsets in motherboards will increase with the threat posed by Intel to VIA, and the other licensees each having different constraints. SIS is still struggling with its new wafer fab's low production yield resulting in insufficient capacity to capture the market opportunity. SIS's new role in turning from a fabless design house to an IDM has lowered its strategic position as a partner for wafer foundries, limiting its outsourcing negotiation power. VIA's involvement in the motherboard business, by outsourcing to smaller motherboard makers, will be a short term tactic to defend against Intel's encroachment, as the motherboard business is not only distant to its business core, but also bears a high risk of conflicts with its existing clients, major motherboard makers.
Major global PC vendors such as Compaq, Dell, and HP, usually outsource their motherboard production to CEMs, but maintain research and design capabilities in-house. However, a recent development suggests that those PC vendors have started to seek out OEM/ODMs to design and produce motherboards so as to further reduce costs. Greater China is in an excellent position to reap the benefits from this strategy because it contains strong motherboard and PC industry clusters. Furthermore, the Chinese PC market is on the rise because there is still a low penetration rate and the country's economical and industrial environment is experiencing rapid growth. As a result, Greater China motherboard makers will continue to receive more and more business opportunities.