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In a bid to retain position of the world’s leading maker of mainboards and control up to 45% of the market, Asustek Computer, currently one of the largest maker of computer components, is rumoured to be interested in taking over Gigabyte Technology, another major makers of computer parts.

Several Asian web-sites, including DigiTimes and OCWorkBench, have reported that Asustek plans to increase its capitalization, production capacities and market penetration by acquiring Gigabyte Technology. The new company may ship up to 78 million mainboards in 2006 and control up to 45% of the whole motherboard market in the world. In addition, the new company will absorb research and development (R&D) as well as distribution strengths of both companies. Additionally, acquisition of Gigabyte will allow Asus to report over 50% production and revenue growth for 2006.

Asustek, just like the other companies from the so-called Big Four – ECS, Gigabyte and MSI – competes fiercely with Foxconn, a company originally involved in contract manufacturing for several large companies only, who has been penetrating the channel markets for two years now. In fact, certain products that are sold under Gigabyte brand-name are manufactured at Foxconn’s capacities.

In 2005 Foxconn shipped 40 million mainboards, while Asustek supplied 52 million. This year both companies planned to increase their mainboard sales, which makes the fight even more brutal, not only for Asus and Foxconn, but for smaller players, including Gigabyte.

Gigabyte has been rumoured to be looking to merge with other players for some time now. Earlier this year it was claimed that the company was in talks with MSI in regards the merge.

Both Asus and Gigabyte have denied the information about the possible take over claiming that there were no such plans. No information about the conditions of the acquisition has been published even by unofficial sources.


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