Gigabyte Technology will begin a business reorganization on August 1 and merge its motherboard and graphics card businesses together. The new department will be led by Eddie Lin, sales and marketing associate vice president of Gigabyte’s Gaming Product Business Unit.
Gigabyte’s motherboard shipments went down 900,000 units from 2015’s 17.1 million units to reach only 16.2 million in 2016, but the company’s motherboard ASP went up dramatically in 2016 as Gigabyte made a major increase in mid-range and high-end model shipments.
With its graphics cards also seeing growing ASPs, Gigabyte managed to achieve consolidated revenues of NT$52.3 billion (US$1.76 billion), up 3% on year, net profits of NT$2.29 billion, up 18.8% on year, and EPS of NT$3.64, higher than 2015’s NT$3.05.
Despite stable performance in 2016, in early 2017, Gigabyte has seen PC sales decrease dramatically because of weakening demand from China’s PC and Internet Cafe markets. In addition, due to appreciation of the NT Dollar, component shortages, and price hikes, Gigabyte had a rather weak first quarter with motherboard shipments reaching only 3.5 million units and graphics cards 900,000. Net profits went down 50.59% on year and EPS were only NT$0.43, far weaker than NT$0.86 from the first quarter of 2016.
Although Gigabyte had excellent performance in the second quarter, its motherboard shipments continued to drop and reached only three million units. Gigabyte’s strong performance in the second quarter was contributed mainly by its graphics card business, which enjoyed high revenues due to the cryptocurrency mining trend, and server orders from Russia-based Internet service provider Yandex. However, since the two sources of income are only short term, Gigabyte has already turned cautious about its future operations.
Several of Gigabyte’s motherboard executives will be shuffled and will report to Lin after the merger is completed.
With the business reorganization, some market watchers believe Gigabyte will see a series of layoffs and resignations after October, but operations should return stable in the fourth quarter with a new team.
However, the business reorganization and exchange rate fluctuations are still expected to impact Gigabyte’s profitability in 2017, the sources added.
Source: Digi-times
