Asustek and Gigabyte joint venture

Along with the AMD and ATI merger, Asustek and Gigabyte have just announced a major joint venture plan between the two companies. This joint venture will allow Gigabyte to use Asustek facilities for manufacturing Gigabyte video cards and motherboards.

Gigabyte will own a 51% stake in the company, with Asustek picking up the other49%. Reports the deal is valued at approximately $244M USD, and that the newjoint venture will become official January 1, 2007. Neither companywould comment on the effect of the joint venture on existingmanufacturing,claiming that only the legal proceedings to start the company have beenpublically announced at this time. The joint venture will also get anewname, but both companies are also tight lipped about that as well.

ASUS and Gigabyte have traditionally held the title of tier-1 motherboardmanufacturers in Taiwan. This title was also shared by MicrostarInternational -- also a major player in motherboard, VGA and server manufacturing. However, as PC component manufacturing began to move to mainland China, Foxconnand 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 marketwith 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 retailmanufacturing by 2008, inan effort to give the manufacturing half of the company more room to competewith the "Big Four".

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

News source: DailyTech

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