Mainboard makers continue to escalate production in mainland China and move production facilities it away from Taiwan. As manufacturing in China seems to be cheaper than in Taiwan, it is reasonable to produce most of the products in China in order to cut down the costs and be able to offer their mainboard for lower price without reducing the margins. It is estimated that more than 50% of mainboards by first-tier manufacturers will be made in China by the end of 2003.

ASUSTeK computer is expected to complete its fab in Suzhou, Jiangsu Province in China, sometime this year and half of its 3 million mainboards per month ASUS will be able to produce per month will come from China. Another half will still be made in Taiwan. As we revealed some time ago, even current mainstream and performance mainstream mainboards on i865 “Springdale” core-logic sets are made in China.

ECS have been already producing all its mainboards in China for some time and with selling its Chungli, Taoyuan (Taiwan) facility that makes notebooks for Apple, 100% of its manufacturing base is located in China. Total production capacity is estimated to reach 1.80 million units per month.

It is interesting to note that both ASUS and ECS will have all mainboard components being manufactured in China as well.

According to a report from DigiTimes, Micro-Star International (MSI) reduced production in Chongho, Taipei County (Taiwan) in June and transferred equipment to Kunshan, Jiangsu Province (China). It now has 29 SMT production lines in China and claims that more than 50% of its mainboard production is made in China.

Gigabyte Technology still produces most of its mainboards in Taiwan – only 30% of such devices came from China at the end of 2002. Nevertheless, the company currently performs expansion of manufacturing capacities and expects its output to reach 1.5 million of mainboards by the year-end, from 1.15 million units now per month. As stated by the source, the company lowers output in Taiwan and increase production on Chinese plant.

We expect all mainboard makers to migrate to China eventually because of very fierce competition. Those, who will not be able to establish mainboard production in China are likely to leave this market or to outsource their products to companies that have fabs in China.

PS. I wonder where manufacturers of computer components will go after they will have to lower the costs of mainboards further? Well, how about India or Africa in 15-25 years?