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Because of weakening motherboard demand, Asustek Computer, Gigabyte Technology, Micro-Star International (MSI), ASRock and Elitegroup Computer Systems (ECS), which together contribute 90% of the worldwide motherboard shipments, have seen dropping sales in the past few years. But Gigabyte and ASRock have recently started seeing increased shipments for server motherboards and the growing volumes are expected to help the two firms achieve good profits in 2017.
Worldwide motherboard shipments have been seeing over 10% on-year drop every year for the past five years and top-2 players Asustek and Gigabyte together only shipped 16-17 million motherboards in 2016, while MSI, ASRock, ECS and Biostar each shipped less than five million units.
Currently, motherboard and graphics card products contribute nearly 80% of Gigabyte’s revenues, while the remaining 20% is contributed by smaller businesses such as notebooks and servers. Gigabyte has already been in the server business for a long time and also landed orders from Google for server products previously, but the company has only been receiving small-volume orders or Dell’s short-term orders in the past couple of years because of fierce competitions from Quanta Computer and Inventec.
However, Gigabyte has recently landed new orders from US- and Europe-based clients for cloud computing products and has been shipping the devices since the first quarter. The orders are expected to contribute over 15% of Gigabyte’s revenues in 2017 and will also help the company achieve better-than-expected profits for the year. The orders will be completed within 2017.
ASRock shipped less than four million motherboards in 2016, but the company’s performances in server and industrial PC product lines have been growing.
The motherboard market’s weakening demand only has a small impact on Asustek’s overall results since the company is still seeing stable profits from its notebook and graphics card product lines. MSI is also seeing limited impact from the motherboard business thanks to its strong gaming notebook business.
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