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Second-Tier Mainboard Makers: Very Weak Now are Optimistic About the Second Half

by Anton Shilov
08/22/2002 | 08:34 PM

Almost all second-tier mainboard manufacturers reported comparatively weak financial performance during the first half of this year. Mobo-makers did not manage to fulfil their financial projections for the declared period of time, moreover, some of them even had to report losses and inventory write-offs due to the situation on the market. Nevertheless, most of manufacturers are optimistic about the second half of the year.

According to DigiTimes, companies like Diamond Flower International (DFI), Chaintech Computer, Jetway Information and Biostar Microtech International expect their shipments to rise about 50% during the next two quarters. Despite of the claims about the second half, Chaintech and EPoX revised their financial forecasts for this year. Shuttle Technology is even more realistic compared to the others and said it expects the growth of only 20%. <%BANNER[article]%>

The current state of these companies is far from being described positively, all of them, apart from Biostar and Shuttle were not able to make 50% of the annual forecast happen. However, Biostar month-on-month revenue fell down 15% in July, meanwhile Chaintech`s value climbed more than 32% during the same period of time. The latter was completely unsuccessful from January to June.

I cannot be as optimistic as second-tier mainboard manufacturers are keeping in mind the economical situation all around the world that keeps users and companies away from buying new computers. However, I realise that the remaining month of the year 2002 may be better than its first six were for certain mainboard suppliers due to the following reasons:

Both AMD and Intel launch new CPUs which are incompatible with the current mainboards this Fall. Athlon XP with 333MHz system bus is only supported by the latest devices based on VIA KT333/KT400 chipsets, a number of new core-logic devices from SiS as well as NVIDIA nForce2; also new Pentium 4 3.06GHz CPUs that support HyperThreading, get 70A of current and dissipates up to 82W of heat, will require mobos that meet the new guidelines from Intel.
The demand on personal computers is very high from September to December, thus, mainboard makers can expect their orders to rise from August to November.

On the other hand, as I have already told you, there are things that can impact the manufacturers’ profits:

The life-cycles of mainboards is very short, hence, average selling prices continue to decrease;
As Intel launches new core-logic solutions and forces to redesign the mainboards, manufacturers will have to sell their present products at cheaper prices now and even lower when the incompatible processors arrive;
The economical situation is very tough.

To sum up, the second-tier mainboard makers can hope for the better in the second half, but they`d better to prepare for the worth, as the number of actual products sold may not be as profitable as they wish.

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